The cost of the European Commission’s new headquarters in Luxembourg has risen to almost €1 billion, nearly twice the original amount agreed for the project close to a decade ago.
Luxembourg’s State Council, the country’s de facto upper chamber, approved a further €351 million spending increase for the Jean Monnet 2 building on Tuesday, according to a report published on its website.
The price tag for the building has been increased twice from its initial budget of €526.3 million and now stands at €992.5 million.
The drive for a new Commission building to house most of the EU executive arm’s staff and services in Luxembourg has been in the pipeline for two decades and its scheduled completion has been postponed several times.
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In 2009, the government signed an agreement with the commission after years of negotiations to pre-finance the building’s cost.
The budget was increased to €641.5 million In 2016. The government requested an additional €351 million of funding in a draft law earlier this year, bringing the overall cost to just under €1 billion.
All 17 State Council members present for the vote backed the huge increase, the body said.
The project was scheduled initially to be completed by 2015, but it faced delays, including as a result of the Covid-19 pandemic, Luxembourg’s minister for public works, Yuriko Backes, said earlier this year in a draft bill outlining the requested funding increase.
Russia’s invasion of Ukraine created inflation and supply chain problems, with some contract bids now showing “significant price overruns compared to the tender quotes” from late 2022 and early 2023, Backes said.
“Market fluctuations and interruptions in supply chains are leading to additional delays in the delivery of materials, not only causing an increase in costs, but also impacting the smooth running of the project,” Backes wrote in her draft law.
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“Faced with these exceptional circumstances, extensions of contractual deadlines have been granted to companies by the government without the application of penalties,” Backes wrote.
The seven-storey commission headquarters is now expected to be completed by the end of next year and include space for around 3,600 staff. The building is to include a library, medical centre, catering area, logistics operation and underground car park with 2,000 spaces.
Source link : https://www.luxtimes.lu/luxembourg/eu-commission-s-1bn-luxembourg-headquarters-almost-twice-over-budget/23845167.html
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Publish date : 2024-10-24 21:46:00
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