Tuesday

23rd Jan 2018

Cost of moving EU drug agency could top €580mn

  • The EU medicines agency is located in Canary Wharf, in London's business district (Photo: chas B)

The rent bill the European Medicines Agency (EMA) is stuck with until 2039 is about €80 million higher than initially estimated.

Initially, the sunk rental costs were estimated at €350 million.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

But the EMA put the cost of the early termination of the building lease at €429,302,409 in a presentation to the European Parliament that was given behind closed doors last month.

The presentation has been made available to EUobserver after an access to documents request.

The total cost of the London-based EMA's relocation, which is needed because the UK is leaving the EU, was estimated to be €582.5 million.

This sum has been previously reported, but the presentation gave a detailed break down for the first time.

The bulk of that amount is for the obligations EMA has to its landlord. The rental contract for the building in the Canary Wharf business district in London is valid until 30 June 2039 - 20 years after the expected date for Brexit - and does not have a termination clause.

The figure excluded the cost of dilapidation, but assumed a "worst case scenario", the presentation said.

It added that sub-letting the building can only be done under "strict conditions" and required the landlord's prior consent.

Other costs that the EMA will incur because of the forced post-Brexit relocation included €28 million to pay for staff needed to prepare the move.

The drugs agency is pulling some 43 staff members from their regular jobs to prepare for the relocation.

Staff-related relocation costs, such as travel to the new location, language courses, and "resettlement costs" were put at almost €23 million.

Some €11 million has been estimated for costs related to moving the agency's IT services.

The agency also expected to spend some €833,000 on preparatory missions to the new location, as well as some visits to the European Commission and European Parliament in Brussels to discuss the relocation.

The document noted that until the end of March 2018, it expects to send four staff members to the new host country every month for 12 hours, and to send two staff members every two weeks for two days from 2018 until March 2019.

Another €1 million was foreseen to be spent on "operational missions" to the new location.

Nineteen European cities have applied to host EMA, while another eight cities want to host the European Banking Authority (EBA) - another EU agency that will have to leave London after Brexit.

The presentation called Brexit the "biggest challenge for EMA since its establishment".

It noted that the final "responsibility for bearing the costs of relocating the agency will be decided during the EU/UK negotiations", but added that the actual costs need to be funded before the physical move.

Read more on EU agencies in EUobserver's 2017 Regions & Cities Magazine.

Click here to access EUobserver's entire magazine collection.

EU agency relocation race starts with 23 cities

Cities from 21 countries have applied to host the two London-based EU agencies, which will have to be relocated after Brexit, with Luxembourg throwing its hat in for the banking authority.

Magazine

Lessons learned from EU police academy's soft Brexit

A decision by Theresa May, when she was home secretary, prompted the move of Cepol, the EU's police academy, from Bramshill to Budapest. The decision-making was long, and the move offered some lessons.

News in Brief

  1. Dutch environment group appeals air quality ruling
  2. Commission opens case into Polish railways state aid
  3. EU remove eight places from tax havens blacklist
  4. UK to keep forces in Germany over Russia fears
  5. Finnish presidential vote could go to second round
  6. Report: EU might pay Brexit residency fees for EU citizens
  7. Puigdemont free to travel around EU
  8. Italy's 5 Star drops euro referendum plan

Stakeholders' Highlights

  1. European Free AlllianceNo Justice From the Spanish Supreme Court Ruling
  2. Nordic Council of MinistersNordic Solutions for Sustainable Cities: New Grants Awarded for Branding Projects
  3. Mission of China to the EUTrade Between China, Belt and Road Countries up 15%
  4. Nordic Council of MinistersOresund Inspires Other EU Border Regions to Work Together to Generate Growth
  5. Mission of China to the EUTrade Between China, Belt and Road Countries up 15%
  6. AJC Transatlantic InstituteAJC Calls on EU to Sanction Iran’s Revolutionary Guards, Expel Ambassadors
  7. Dialogue PlatformRoundtable on "Political Islam, Civil Islam and The West" 31 January
  8. ILGA EuropeFreedom of Movement and Same-Sex Couples in Romania – Case Update!
  9. EU2017EEEstonia Completes First EU Presidency, Introduced New Topics to the Agenda
  10. Bio-Based IndustriesLeading the Transition Towards a Post-Petroleum Society
  11. ACCAWelcomes the Start of the New Bulgarian Presidency
  12. Mission of China to the EUPremier Li and President Tusk Stress Importance of Ties at ASEM Summit