PRESS CONFERENCE BY executive director of Capital Master Plan

The Executive Director of the Capital Master Plan, Michael Adlerstein, said the renovation of the United Nations, under the new Accelerated Strategy IV of the Capital Master Plan, could be completed two years ahead of schedule and under budget.  Mr. Adlerstein was briefing reporters on the Secretary-General’s fifth annual progress report on the Plan at a press conference this morning at United Nations Headquarters in New York.

“When I last spoke to you, it was shortly after my arrival at the UN and shortly after the UN’s Board of Auditors had issued a report which projected cost overruns and delays for the Capital Master Plan,” he said.  “I told you that upon assuming my responsibilities as Executive Director, I would review all aspects of the Plan and identify a way to bring the project back on schedule and back on budget.”

He said the Accelerated Strategy IV did just that.  The renovation of the United Nations would be completed within the previously approved budget of $1.876 billion.  “Most importantly,” added Mr. Adlerstein, “the entire project will be completed in five years rather than seven, thus reducing the disruption to the Organization and its operations by two years.”  The expected completion date of the new Accelerated Strategy would be 2013.

The Secretary-General’s progress report is currently under discussion in the Fifth Committee (Administrative and Budgetary) and its recommendations are up for approval by Member States.

Mr. Adlerstein said the new recommendations were consistent with the plan approved by the General Assembly in June of 2006, in that they allowed for the Security Council, the Assembly and all other conferencing areas to remain in the Headquarters compound in a new temporary building.  The library would be moved out as planned.

The main differences between the previous recommendations and the current ones lay with the speed and manner in which the renovations would take place.  In the Secretariat building, the Accelerated Strategy IV proposed the emptying of the entire building in one phase instead of four as before.  Likewise, the General Assembly building and conferencing areas would be emptied in two phases rather than three.

To accomplish that task, more “swing space” to house displaced staff would be required.  Once the library moved out, that building would be used as swing space.  The new temporary building for the Assembly and other conferencing areas would now be larger, approximately 175,000 square feet, and would be built on the North Lawn of United Nations Headquarters.

Although the extra swing space needed might raise costs, the Accelerated Strategy IV actually lowered costs, as the increased cost of additional swing space was more than offset by the lowered cost for the renovation itself.

The previous Strategy IV foresaw a situation in which staff would work in the Secretariat while renovations were taking place.  That would have required two operational infrastructure systems at the same time.  Mr. Adlerstein gave the example of staff working on the newly-renovated upper floors of the building while staff below worked on floors not yet renovated.  In that situation, those on the upper floors would be using new plumbing, heating, and air-conditioning systems, while personnel on the bottom floors would still be on the old infrastructure system.  By emptying the entire Secretariat and renovating the entire building, as well as infrastructure system, at once, the savings amounted to tens of millions of dollars.

Such a strategy also reduced the risk of future cost increases, he said.  It lowered cost risks in three categories, namely:  the cost of construction, since the majority of construction contracts would be negotiated and settled in 2008 and 2009 and thus not as liable to be affected by rising inflation costs; United Nations staff impact on the cost, as the possibility of noise and other disturbances which might require the Organization to request pauses in the construction schedule would be reduced with related cost increases significantly diminished; and, in terms of the construction impact on United Nations activities and staff functions, the possibility of a construction-related incident or accident close to occupants would be greatly diminished.

Mr. Adlerstein said the Capital Master Plan team recommended the switch to the new Accelerated Strategy IV for various reasons.  But the Secretary-General’s desire to reduce the disruption to the Organization and the length of the project, as well as staff concerns over the risks involved in construction during occupancy were significant factors.  Also, the selection of Skanska as the construction management firm and its demonstration of the cost-saving effect of renovating an empty building versus a full building was also significant.  Finally, the recent correction in the real estate market was also a factor, as the softer market presented new opportunities for finding appropriate and reasonably priced swing space.

Currently, the Capital Master Plan was a projected $219 million over the approved budget, though Mr. Adlerstein pointed out that the overrun was only a projected estimate.  The Capital Master Plan team and Skanska had started a robust value-engineering exercise to find appropriate ways to further reduce costs without compromising the quality or sustainability of the completed project.  The actual funds expended to date, representing less than 5 per cent of the total cost, were well within the budget.

Some of the work accomplished since Mr. Adlerstein’s arrival included the commencement of pre-construction activities and value-engineering by Skanska; the preparation of design and construction documents by architectural and engineering consultants; and the signing of a lease for a midtown Manhattan building as swing space to house staff during renovations.

Asked about how discussions among Member States were progressing within the Fifth Committee, Mr. Adlerstein said they were progressing in a very logical, expeditious and cooperative way and would help Member States to understand the exact nature of the Secretary-General’s proposals.  In particular, there had been enthusiastic discussions about developing countries being included in the procurement of project materials.

Mr. Adlerstein said “Skanska had an obligation in their contract to … provide the United States with a list of materials and purchases that they feel are appropriate internationally.  We will then determine a way to ensure that as much as possible is purchased internationally.”  He added that there were contingency funds in the budget that could be used to help developing countries if they were not able to offer the lowest bids.  Decisions on bidding would be decided jointly by Skanska and the United Nations through a negotiated, transparent process, and on a case-by-case basis.

Asked about the greening of the United Nations buildings, Mr. Adlerstein said that his team was still examining all the options available, since changing technology offered new opportunities all the time.  “The building will be a role model for sustainability”, he promised, adding that an exact list of greening options incorporated into the project would be announced at a later date.

Along with green designs, the building would also incorporate new security designs, such as blast considerations for glass walls.  Those would make the building safer overall while maintaining the overall design and appearance, as well as the look and feel of the United Nations.

“Highly complex design and construction projects,” said Mr. Adlerstein, “require the ability to adjust to changing circumstances, thus allowing the Secretary-General to respond quickly to new information and new market conditions within the approved overall budget and method of financing.”

He said, if the Accelerated Strategy IV was approved, the groundbreaking for the temporary North Lawn building could take place in late spring of 2008 and staff members could begin vacating the Secretariat in late 2008 or early 2009.

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For information media • not an official record