The Fifth Committee (Administrative and Budgetary) today took up the renovation of the historic Palais des Nations campus, home of the United Nations Office at Geneva, with the Secretariat reporting that the CHF 836.5 million project — due for completion in 2023 — is making significant progress, but delegates expressing concern about potential construction delays and unresolved financing modalities.
Giving the host country’s perspective, the representative of Switzerland described the Strategic Heritage Plan as an investment in a modern, effective and efficient United Nations. However, his Government is concerned with certain adjustments to its timeline and the cost of individual project segments. The main concern remains an unresolved financing framework, he said, emphasizing that by the end of 2019, more than a quarter of a CHF 400 million zero‑interest loan from Switzerland will have been disbursed. He said it is important for the General Assembly to agree on the Plan’s financial modalities during its current session.
The representative of the United States put a spotlight on one key proposal for financing the project — the valorization, or leasing, of underutilized United Nations property in Geneva. “Every effort should be made to avoid increases to the amounts of financing that is done through Member State assessments,” she stated. Acknowledging the historic character of the Palais des Nations, and the fact that Geneva is among the world’s most expensive cities, she encouraged the Secretary‑General to continue to identify ways to ensure a more flexible workplace with increased capacity — “one that is better suited for the twenty‑first century United Nations”.
Egypt’s delegate, speaking on behalf of the “Group of 77” developing countries and China, voiced concern about project delays and emphasized the need for comprehensive mitigation measures to ensure that the Plan is completed on time and within budget. He said the Group will also seek to know more about a proposal from the Secretary-General to incorporate mechanical ventilation and cooling within the extended scope of the Plan. He added that the time has come for a decision on the scheme and currency of appropriation and assessment of the project and to set up a multi‑year special account.
The representative of the Russian Federation, calling the Plan an investment in the future of the Organization and its ability to carry out its mandates, said her delegation opposes coupling flexible workspace with the ventilation system, as doing so will hinder the ability to preserve its historical nature. Work should be carried out within estimated budget and established timeframes, she said, calling for further information on risk management, risk mitigation and improved accessibility for people with limited mobility.
Christian Saunders, Assistant Secretary‑General in the Department of Management’s the Office of Central Support Services, introducing the Secretary‑General’s fifth annual progress report on the Plan at the start of today’s meeting, said significant progress was made during the reporting period in several key areas.
Carlos Ruiz Massieu, Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introducing its related report and Bernard Holstein, Deputy Director of External Audit of the Board of Auditors, presented the Board’s second report on the Plan.
In other business today, Fabio Esteban Pedraza Torres (Colombia), Committee Vice‑Chair, drew the Committee’s attention to a letter dated 13 November from the President of the General Assembly, transmitting a letter from the Chair of the Sixth Committee (Legal) on the administration of justice at the United Nations (document
A/C.5/73/11).
The Fifth Committee will meet again at a date and time to be announced.
Strategic Heritage Plan
CHRISTIAN SAUNDERS, Assistant Secretary‑General, Office of Central Support Services, introduced the Secretary‑General’s fifth annual progress report on the Strategic Heritage Plan of the United Nations Office at Geneva (document
A/73/395). He said significant progress has been made during the reporting period towards achieving key project milestones for planning, design, procurement and construction activities, including construction of the new permanent building — which has reached the second floor — and the prequalification of vendors for the tendering of renovation works for the historic buildings. In the area of procurement, he drew attention to the efforts being made to attract a broad pool of qualified international bidders.
On project financing, he said that, following the recommendation of the Board of Auditors, and given that the project is entering into significant high‑value multi‑year construction contracts that extend beyond a single budget year, the Secretary‑General is recommending that the General Assembly approve an appropriation scheme founded on a one‑time, up‑front appropriation with a mix of one‑time and multi‑year assessments. That option would strengthen the project by bringing added certainty regarding financing and allow for some upfront payments by Member States, thus mitigating possible cash‑flow risks, he explained. He added that between CHF 80.6 million to CHF 133 million could realistically be achieved through the valorization of underutilized property in Geneva owned by the United Nations.
On modernizing the work environment, he said that — based on a review by a working group of experts from Geneva and Headquarters — the Secretariat strongly recommends that mechanical ventilation and cooling systems be installed during the renovation of the Palais des Nations as part of the Plan. The estimated cost is CHF 67 million, versus CHF 108 million if the work takes place after renovation. “The most viable way to achieve this is to utilize water from Lake Geneva,” he said adding that the work, if approved, would utilize innovative engineering, thus preserving the Palais des Nations’ architectural heritage and integrity. Such an intervention would be more energy- and cost‑efficient if combined with a more open office layout that would, in turn, support a more collaborative and flexible working environment while making it possible to increase the number of people that can be accommodated. That combination of factors would also provide additional rental income for the Organization, he said, emphasizing that the full cost of the undertaking can be financed through valorization income.
“This is a unique opportunity of an alignment of factors” that include having a project framework and project team already in place, a suggested funding source and the knowledge that deferring the work will mean greater disruption and significantly higher costs, he said, emphasizing that that makes a compelling argument to include it within the scope of the Plan.
BERNARD HOLSTEIN, Deputy Director of External Audit, Board of Auditors, introduced the Secretary‑General’s note on the Strategic Heritage Plan of the United Nations Office at Geneva (document
A/73/157), transmitting the Board’s second report on the Plan. He said that during the Board’s most recent audit visit, the Plan was in the early stages of construction work for the new building and the procurement procedure for renovation work. In addition to concerns related to the project’s timely completion, further improvements are needed in the fields of risk management, building design, construction and maintenance, and valorization. Procurement procedures need to be enhanced for keeping sensitive data confidential.
Among the key findings of the Board is the need to update the Plan’s risk management strategy to more closely align with the guidelines for the management of construction projects, Mr. Holstein said. The risk reporting did not meet the strategy for part of 2017. The contract for construction work in the new building is based mainly on plans and design issued in December 2016, without considering the full implementation of flexible workplace strategies. These strategies need to be decided upon urgently to avoid any further risk of amendments, delays and extra costs. In addition, energy savings targets need to be reviewed and referring baselines need to be determined as the data provided by the Geneva Office and the Plan’s project team regarding energy consumption at the Palais des Nations differ significantly.
He then turned to the issue of potential alternative sources of project financing and the assumption of potential future rental income from the Office of the United Nations High Commissioner for Human Rights (OHCHR). The Board notes management did not develop a timely strategy to achieve a higher rental income or market value sale though it already knew in 2014 about valorization potentials and realistic local lease conditions of several parcels owned by United Nations Office at Geneva. The Board believes management should develop a detailed valorization strategy regarding all parcels with valorization potential. Of the eight recommendations made in the Board’s first report on the Plan, six, or 75 per cent, have been implemented and two were overtaken by events. The Board has made 39 recommendations in its current report, he said.
CARLOS RUIZ MASSIEU, Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introducing its related report (document
A/73/576), recommended that the General Assembly authorize the Secretary‑General to proceed with the introduction of ventilation and cooling in the Palais des Nations, to include it as part of the Plan and to use the window of opportunity to limit costs. The Advisory Committee also recommends that the Assembly request the Secretary‑General to seek greater efficiency and complementarity with ongoing activities under the Plan and to refine and reduce estimated resource requirements. He went on to say that, in its report, the Advisory Committee makes some observations and comments on the use of valorization income, application of flexible workplace strategies, accessibility issues, voluntary contributions, the security masterplan and maintenance issues. He concluded by reiterating the importance of keeping the project on schedule to avoid potential cost overruns.
KARIM SAMIR ISMAIL ALSAYED (Egypt), speaking on behalf of the “Group of 77” developing countries and China, voiced concern about project delays and emphasized the need for comprehensive mitigation measures to ensure it is completed on time and within budget. He said the Group looks forward to the launching of the tender for the renovation of the 1930s historic buildings during this final quarter of 2018. Welcoming China’s voluntary contribution to the project, he encouraged other Member States to follow suit. On the technical challenges of implementing flexible workplace strategies in the Palais des Nations, he said the Group will explore the proposals put forward and seek more clarity on current and future space needs. Welcoming the study by the United Nations Office at Geneva on the impact of climate change on the Organization’s operations, he said the Group will also seek to know more about the business case for incorporating mechanical ventilation and cooling within the extended scope of the Plan. He concluded by emphasizing that the time has come for a decision on the scheme and currency of appropriation and assessment of the project as well as the establishment of a multi‑year special account.
CHERITH NORMAN‑CHALET (United States) said transparency and good governance must comprise Member States’ decision‑making on financing the Plan. She emphasized the importance of reducing the financial burden on Member States through alternative options, adding that any revenue gained from leasing United Nations property in Geneva must be applied to the Plan. “Every effort should be made to avoid increases to the amounts of financing that is done through Member State assessments,” she stated. Recalling that the Plan involves many components, including the proposed cooling and ventilation system, she said the United States looks forward to discussing those issues along with financing arrangements. Acknowledging that the Palais des Nations is an historic building, and emphasizing that Geneva is one of the world’s most expensive cities, she encouraged the Secretary‑General and his team to continue to identify ways to ensure a more flexible workplace with increased capacity — “one that is better suited for the twenty‑first century United Nations”. She concluded by citing a recent space utilization survey that determined that individual workspaces within the Palais complex are being utilized throughout the day at an average rate of 51 per cent.
JÜRG LAUBER (Switzerland), said the Strategic Heritage Plan has nearly reached the midpoint of its project cycle and is moving ahead in accordance with the overall total cost, duration, scope and quality targets approved by Member States. The Plan is very important to the United Nations and is an investment in a modern, effective and efficient Organization respectful of its people, environment and financial resources. By significantly lowering future costs, better using space and generating additional income, the Plan will provide substantial annual savings for the Organization and Member States. Additional United Nations entities will be welcomed to the Palais and collaboration will expand.
Switzerland is concerned with certain adjustments to the project’s timeline and the cost of individual project segments, he said, encouraging the Secretariat to make sure the project is completed as approved by Member States. His delegation welcomes more discussion on the proposal to implement ventilation and cooling, including flexible workplace strategies, in the historical buildings of the Palais des Nations. Switzerland’s central concern remains the unresolved financing framework, which jeopardises the progress made up to now. By the end of next year, more than CHF 100 million of Switzerland’s CHF 400 million zero‑interest loan will have been disbursed. Income from land valorization of more than CHF 80 million can realistically be predicted and substantial donations have been committed. It is very important to agree on the Plan’s financial modalities during this session.
MARIA V. FROLOVA (Russian Federation) supported the initiative to protect the Geneva Office and noted that the renovation project is not a standard work given the historical significance of the building. It is an investment in the future of the Organization and its ability to carry out its mandates. Providing improved security and greater accessibility are needed as the building is enhanced and serves as a centre for global diplomacy. Last year, the General Assembly did not approve the Secretariat’s proposal for a cooling and ventilation system and for improving the smart work process in the older building. The Russian Federation is against coupling flexible workspace with the ventilation system in the old building since these initiatives will have a negative impact on preserving the building’s historical nature. The project should be carried out within estimated budget and established timeframes. She called for additional information on risk management and ways to mitigate risk and supported steps to improve accessibility for people with limited mobility.
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