Europe
New NATO headquarters in financial trouble
Stars and Stripes
January 26, 2014
Completion of a new NATO headquarters in Brussels, Belgium, could be in jeopardy as construction costs overruns could reach 245 million euro ($325 million), the German news magazine Der Spiegel reported last week.
On its website, the alliance said the new building would “be able to accommodate NATO’s changing requirements into the future.” The cost was estimated at 750 million euro (about $1.05 billion).
But the consortium that won the contract for the construction came in with a bid of only 460 million euro, according to the Der Spiegel report.
Now, the consortium is seeking an addition 245 million euro, according to NATO project manager Tony Carruth. Additionally, completion of the bulding will probably be delayed by 9 ½ months, Carruth said.
The consortium of firms building the headquarters is at risk of insolvency, Der Spiegel's report says.
According to documents attained by the German magazine, NATO Secretary General Anders Fogh Rasmussen is aware of the problem but hasn't seen fit yet to inform the public about it. At a meeting of NATO's Deputies Committee on December 19, 2013, Rasmussen's staff asked that the issue be dealt with "confidentially," according to the report.
But a NATO spokeswoman who contacted Stars and Stripes on Sunday said the der Spiegel story is misleading.
The alliance's ambassadors were fully informed of the funding request in December by Belgium, which manages the project on NATO's behalf.
The request for additional funding to finish the project is a commercial claim which is being analyzed by Belgium, and those negotiations require a certain degree of confidentiality, she said in an email.
"Our host nation Belgium is responsible for the project ... and we have confidence in Belgium to manage it," the email stated.
NATO that has been fully transparent about the various construction stages, she said.
The current headquarters is reaching the end of its usable life, she said. The decision to build a new headquarters was made by the 28 NATO member nations in 1999, and the project continues to be actively steered by those nations.
"The new headquarters will house not just NATO officials, but the diplomatic representations of all 28 NATO allies, so it's a large and complex project, with unique features driven by security requirements," the spokeswoman said in the email.