Monday

25th Sep 2017

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.

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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.

EUobserver's next Regions & Cities magazine, released in October, will look at the impact EU agencies have on its hosts. What do EU agencies bring to the local economy? Do agencies operate as the face of the EU in the member states? How do the policies of agencies affect regions and cities? For a free copy of the magazine, register now for our newsletter.

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.

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