Sixty-sixth General Assembly

Fifth Committee

21^st Meeting (AM)

Fifth Committee Takes Up Annual Update on Plan to Refurbish UN Headquarters;

Project Head Envisions Completion within 4 Per Cent of Original Budget

 

Also Begins Consideration of $617 Million in Financing for 30 Political

Missions in 2012; Two Largest — Two Thirds of Cost — In Afghanistan, Iraq

The ambitious, multi-year overhaul of the historic United Nations Headquarters — known as the Capital Master Plan — was on track for completion by the end of 2014 within a variance of no more than 4 per cent of the original approved budget of $1.88 billion, the Plan’s top official told the Fifth Committee (Administrative and Budgetary) today.

Michael Adlerstein, Assistant Secretary-General and Executive Director of the Capital Master Plan, said cost overruns of the $1.95 billion project continued their downward slide from $80.1 million in September 2010 to $74.3 million by the end of May 2011 thanks to careful project management, value engineering initiatives and efficiency measures.  Since 2007, they had been slashed more than half. 

Introducing the Secretary-General’s ninth progress report on its implementation, Mr. Adlerstein gave delegates an extensive update and noted that fully, 86.7 per cent, or $1.63 billion, of the Plan’s original net budget had been committed already, minimizing the risk of any unexpected, adverse surprises.

In addition, his Office had developed a proposal, which was outlined in the Secretary-General’s progress report, to partially absorb associated costs, including that of a secondary data centre, into the budget, he said.  Specifically, it asked the Assembly for permission to apply the $104.1 million in accrued interest and the $45 million in working capital reserve to the project — a move which would significantly reduce its funding gap.  All but approximately $131.9 million of the cumulative net project and associated costs would be covered. 

That money, he stressed, was needed before the first quarter of 2012 to avoid delays and keep the project, which was in its most intense construction phase, on track, he said.  With more than 1,000 construction workers on site daily, any funding shortfall would immediately slow or stop work, postpone re-occupancy of the Secretariat and Conference Buildings, scheduled for 2012, and delay the start and completion of the General Assembly Building into 2015. 

“I appeal to this Committee for additional funding authority in the amount of $149.1 million, so the [Capital Master Plan] Office can proceed and deliver the product in which we have already invested four years and over $1 billion,” he said.

Collen Kelapile, Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introducing a related ACABQ report, endorsed that proposal and said the extra resources should be made available in a phased manner, starting with the working capital reserve and then, if necessary, interest income.  But, even if used, those resources would not cover enough of the associated costs to offset the existing budget deficit.  Therefore, the Assembly should, in the interest of transparency, ask the Secretary-General to clarify how the remaining requirements were to be met. 

Mr. Kelapile also urged the Secretary-General to continue exploring all opportunities to reduce the total project completion cost through value engineering and other cost-efficiency steps, and to give detailed information in that regard in his next progress report.  He noted that project resource requirements for associated costs from 2008 to 2013 totalled $146.8 million, largely owing to the purchase of furniture, the acquisition and implementation of the permanent broadcast facility and the asset management system, and the provision of security coverage.

Maria Eugenia Casar, Assistant Secretary-General and Controller, introduced the Secretary-General’s proposals.  Carman Lapointe, Under-Secretary-General for Internal Oversight Services, introduced that Office’s report on the audit of the Plan’s procurement and contract management, including change orders. 

Hugh O’Farrell, Director of External Audit of the Audit Operations Committee, introduced the Board of Auditors’ report for the year ended 31 December 2010 on the Plan.  Mario Baez, Chief of the Policy and Oversight Coordination Service of the Department of Management, introduced the Secretary-General’s report on implementing the recommendations contained in the Board of Auditor’s report.  

Weighing in on the matter, delegates expressed concern over the continued “slippage” over the project and its budget implications.  The European Union’s representative said delays affecting the General Assembly Building, the Dag Hammarskjöld Library and South Annex Building and their related costs would strain the budget even more, and echoed the Advisory Committee’s call for clarification on how the Organization would fund the remaining requirements.

Malaysia’s representative suggested that through greater outreach activities that enabled companies in the developing world to procure products and services for the project, the Organization could reduce the overall costs and resolve the cost overrun. 

Also today, the Committee took up financing of the Organization’s 30 special political missions for the year ending 31 December 2012.  According to Ms. Casar, who introduced the Secretary-General’s reports on estimates in respect of those missions, good offices and other political initiatives authorized by the Assembly and/or the Security Council, total requirements for the missions had fallen $22 million from a year earlier to $617.62 million net.  The lion’s share — some 67.1 per cent — was required for the two largest missions, the United Nations Assistance Mission in Afghanistan (UNAMA) and the United Nations Assistance Mission for Iraq (UNAMI).  

Mr. Kelapile, who introduced the Advisory Committee’s related report, said the Advisory Committee had previously expressed the view that the Secretary-General’s projections of $1.08 billion for those missions for the 2012-2013 biennium could prove optimistic and the estimates proposed for 2012 validated that position.  The Advisory Committee backed the Secretary-General’s resource proposals, with some of its own observations and recommendations.

Several Member States expressed worries that the continued delay every year in introducing the budgets of the missions to the Committee did not give it enough time to carefully scrutinize them.  They also criticized the Secretary-General’s report for not providing enough information on steps to achieve operational efficiencies in the missions.

The representative of Canada, also speaking on behalf of Australia and New Zealand, lauded the Secretary-General’s efforts to strengthen fiscal discipline within the missions — which represented 20 per cent of the Organization’s regular budget — but regretted that the reductions had more to do with decreased operation levels in some key missions than specific and targeted efficiency measures.  The Secretariat should identify more systemic, sustainable efficiencies and provide clear, realistic and time-bound performance indicators to facilitate better budgetary analysis. 

The representative of Côte d’Ivoire, speaking on behalf of the African Group, said he would reject any unfounded and unjustified arbitrary cuts to those missions, which must be adequately financed to effectively implement their respective mandates.  Noting that the missions unique character — they did not follow the regular budget’s programme planning and budgeting cycle and had unpredictable timing and related source requirements — he said the budgets for them should be presented and dealt with separate from the regular budget.  Such a move would increase budget transparency and give a more accurate picture of the Organization’s budgetary situation. 

Also speaking today were the representatives of Japan, Cuba, Malaysia, Syria, Mexico, Iran, Brazil and the Russian Federation.

The Fifth Committee will reconvene at 10 a.m. on Tuesday, 13 December, to consider financing of the International Criminal Tribunal for Rwanda, International Criminal Tribunal for the Former Yugoslavia, backstopping and funding arrangements for the special political missions, Human Rights Council financing, and financing of the United Nations Mission in South Sudan (UNMISS).

Background

As the Fifth Committee (Administrative and Budgetary) met today to consider special political missions and the Capital Master Plan, it had before it several reports on both topics.

On the first topic, in his report titled estimates in respect of special political missions, good offices and other political initiatives authorized by the General Assembly and/or the Security Council (document A/66/354), the Secretary-General asks the Assembly to approve a $617.62 million net budget for 30 special political missions for the year ending December 2012.  The Secretariat also asks the Assembly to approve a $617.62 million net charge against the provision for special political missions requested in section 3, Political affairs, of the proposed programme budget for the 2012-2013 biennium.

The requirements for these missions, authorized by the Assembly and/or Security Council, are listed on page 9 of the report in Table 1.  Details are laid out in addenda.  The total estimated requirements for the 1 January to 31 December 2012 period total $617.62 million net ($662.26 million gross).

Of the 30 missions:

Nine missions have open-ended mandates:  The Special Adviser to the Secretary-General on Cyprus; the Special Adviser to the Secretary-General on the Prevention of Genocide; the Personal Envoy of the Secretary-General for Western Sahara; the Special Envoy of the Secretary-General for the Implementation of Security Council resolution 1559 (2004); the Office of the United Nations Special Coordinator for Lebanon; the United Nations Regional Centre for Preventive Diplomacy for Central Asia; the United Nations Political Office for Somalia; United Nations support for the Cameroon-Nigeria Mixed Commission; and the United Nations Representative to the Geneva International Discussions.

Three missions have mandates expiring in 2013 or later:  the Counter-Terrorism Committee Executive Directorate; the United Nations Office for West Africa; and support to the Security Council Committee established pursuant to resolution 1540 (2004) on non-proliferation of all weapons of mass destruction.

Eleven missions have mandates expiring in 2012:  the Monitoring Group on Somalia and Eritrea; the Group of Experts on Côte d’Ivoire; the Panel of Experts on the Islamic Republic of Iran; the Panel of Experts on the Democratic People’s Republic of Korea; the Panel of Experts on the Sudan; the Panel of Experts on Libya; the United Nations Integrated Peacebuilding Office in Sierra Leone; the Analytical Support and Sanctions Monitoring Team established pursuant to Security Council resolution 1526 (2004) concerning Al-Qaida and the Taliban and associated individuals and entities; the United Nations Regional Office for Central Africa; the United Nations Assistance Mission in Afghanistan (UNAMA); and the United Nations Assistance Mission for Iraq (UNAMI).

One mission, the Special Adviser of the Secretary-General on Myanmar, is under consideration by the Assembly.

Six missions have mandates expiring in 2011:  the Panel of Experts on Liberia; the Group of Experts on the Democratic Republic of the Congo; the United Nations Integrated Peacebuilding Office in the Central African Republic; the United Nations Integrated Peacebuilding Office in Guinea-Bissau; the United Nations Office in Burundi; and the United Nations Support Mission in Libya (UNSMIL).

The 2012 budget proposals for the missions mentioned in the prior two paragraphs, whose mandates are not yet renewed, are included in the present report on the assumption that the Assembly and/or Council will extend their mandates into 2012 on the basis of information now before them.

The report notes that the mandate of the United Nations Mission in Nepal expired on 15 January 2011 and its liquidation period ended 15 May 2011.  The United Nations Integrated Office in Burundi was succeeded by the United Nations Office in Burundi on 1 January 2011.  The mandate of the United Nations Representative on the International Advisory and Monitoring Board of the Development Fund for Iraq expired on 30 June 2011.

In his report titled thematic cluster I:  special and personal envoys and special advisers of the Secretary-General (document A/66/354/Add.1 and Corr.1), the Secretary-General lays out the proposed resource requirements for 2012 for six special political missions in the category of special and personal envoys and special advisers of the Secretary-General.  Estimated requirements for these six missions total $11.43 million (net) and can be found on page 3 of the report.  The mandate of the United Nations Representative on the International Advisory and Monitoring Board of the Development Fund for Iraq, previously included in this category, expired on 30 June 2011.  The budget proposal for the United Nations Representative to the Geneva International Discussions is included under cluster I.

In thematic cluster II:  sanctions monitoring teams, groups and panels (document A/66/354/Add.2), the Secretary-General lays out the proposed resource requirements for 2012 for 11 special political missions created by Council decisions and grouped under the thematic cluster of sanctions monitoring teams, groups and panels.  The estimated requirements total $32.4 million for 2012 and can be found on page 3 of the report.

In thematic cluster III:  United Nations offices, peacebuilding support offices, integrated offices and commissions (document A/66/354/Add.3), the Secretary-General details proposed resource requirements for 2012 for 10 special political missions grouped under the category of United Nations offices, peacebuilding support offices, integrated offices and commissions which emanate from Council decisions.

The Secretary-General’s report titled United Nations Assistance Mission in Afghanistan (document A/66/354/Add.4) contains the proposed resource requirements of $241.53 million net ($259.45 million gross) for UNAMA for the period from 1 January to 31 December 2012.

The Secretariat estimates that the Mission’s projected expenditures for the biennium 2010-2011 will amount to $509.99 million, leading to over-expenditures of $14 million.

The Kabul Conference in July 2010 led to the Kabul Process and the adoption in Lisbon in November 2010 of a framework for transition to Afghan security responsibility by 2014.  The year 2011 has seen a dense political agenda and numerous significant events that will continue to shape the overall transition strategy, the role of the international community in Afghanistan and its partnership with the Afghan Government, developments on the ground and UNAMA’s operations for the remainder of the year and 2012.

The final addendum on the United Nations Assistance Mission for Iraq (document A/66/354/Add.5 and Corr.1) lays out proposed resource requirements of $172.78 million net ($184.7 million gross) for the United Nations Assistance Mission for Iraq for the period from 1 January to 31 December 2012.  It also includes an update on the status of the construction project related to the planned integrated headquarters compound in Baghdad.

In its thirteenth report titled estimates in respect of special political missions, good offices and other political initiatives authorized by the General Assembly and/or the Security Council (document A/66/7/Add.12), the Advisory Committee on Administrative and Budgetary Questions (ACABQ) recommends that the Assembly approve the resources requested by the Secretary-General with regard to the 30 special political missions listed in Table 1 of document A/66/354 for the period up to 31 December 2012, subject to its observations and recommendations in its present report.  It also requests that the adjusted amount be provided to the Assembly at a time it considers the Secretary-General’s proposals and that the Assembly approve a charge against the provision for special political missions in Section 3, Political affairs, of the proposed programme budget for the 2012-2013 biennium.

Under the Capital Master Plan heading, the Committee also had several reports.

In the Secretary-General’s report on the ninth annual progress report on the implementation of the Capital Master Plan (document A/66/527), the Secretariat outlines the progress made in renovating the Headquarters site over the past year.  Section XIII of the report details the combined estimated costs of the Capital Master Plan, associated costs and secondary data centre resource requirements until the project is completed.  Those associated costs, including the creation of a secondary data centre, are outside the project’s original scope and cannot be fully absorbed within the Capital Master Plan budget.  They require additional financial resources, beginning in 2013.

Detailed resource requirements and expenditure for those associated costs are laid out in the addendum, titled proposals for financing associated costs for 2012 from within the approved budget for the Capital Master Plan (document A/66/527/Add.1.]

In his ninth annual progress report, the Secretary-General asks the Assembly to approve consolidated project requirements totalling $2.27 billion, inclusive of associated and secondary data centre costs of $167.5 million.  The Secretariat also asks the Assembly to endorse the recommendations and proposals contained in section XIV of the report.  It is proposed that the interest income and the working capital reserve be released to partially cover those costs, as necessary.  Together, those resources total $149.1 million.

The report of the Board of Auditors for the year ended 31 December 2010, Volume V, Capital Master Plan (document A/66/5 (Vol. V) recognizes important progress in the Plan, but notes that major challenges lie ahead.  The project, as of 31 March 2011, is forecasting a $79 million, or 4 per cent, over-expenditure against budget; vital parts of the project are now behind schedule.  The report recommends that the Office of the Capital Master Plan strengthen its approach to forecasting future costs by including a robustly calculated and auditable estimate for the cost of all change orders until project completion and by allowing for the most likely costs of identified risks.  Further, it asks the Secretary-General and those responsible for governance to rapidly resolve the untenable situation due to the associated costs.

In his report on implementation of the recommendations of the Board of Auditors contained in its report on the Capital Master Plan for the year ended 31 December 2010 (document A/66/324), the Secretary-General concurs with most of the Board’s recommendations.  He rejects, however, the recommendation to create a small senior management group, supported by an independent space planning expert authority, to review the Capital Master Plan’s potential benefits.  He notes that debate on that matter was discussed in the Capital Master Plan’s fifth annual progress report and that systemic updates are provided by the Office of the Capital Master Plan in each of the Assembly’s annual progress reports.

As most of his comments have been duly reflected in the Board’s report on the Capital Master Plan, the Secretary-General’s present report provides additional comments only where required, as well as information on the status of implementation, the office responsible, the estimated completion dates and the priority for each recommendation contained in the Board’s reports.  The present report also contains updated information on the status of implementing the Board’s recommendations for prior years.

In its twelfth report on the Capital Master Plan (document A/66/7/Add.11), the ACABQ weighs in on the above-mentioned reports.  The Advisory Committee commends the quality of the Board of Auditors’ report, but regrets that the problem of the large numbers of change orders and the time taken to process them has not yet been satisfactorily resolved.  It trusts that it will be without delay.  Commenting on the ninth annual progress report on implementing the Plan, the Advisory Committee shares the Board’s concerns over the impact of further project delays on the Plan’s budget and urges the Secretary-General to continue making every effort to adhere to the current schedule.  It recommends that the Assembly endorse the Secretary-General’s proposal on financing arrangements, which would make it possible to cover the extra direct project cost and a portion of associated costs, without the need for extra assessment on Member States in 2012.

The Advisory Committee also recommends that the Assembly take note of the progress made since the eighth annual progress report was issued; ask the Secretary-General to continue reporting on the project’s status, schedule, aggregated project cost, the status of contributions, interest and the working capital reserve; and endorse the Secretary-General’s proposals on utilization of the working capital reserve, and, if necessary, the interest earned on the Capital Master Plan fund.

Regarding the report on proposals for financing associated costs for 2012 from within the approved budget for the Capital Master Plan, the Advisory Committee recommends that the Assembly take note of the progress set out in that document and note the overall $146.8 million total cost of activities associated with the Capital Master Plan for the 2008-2013 period.  The Assembly is also asked to note the $46.32 million in associated costs for 2012, including $722,800 for the Department for General Assembly and Conference Management; $5.14 million for the Department of Public Information; $32.9 million for the Office of Central Support Services; $610,900 for the Office of Information and Communication Technology; $478,000 for construction, alteration, improvement and major maintenance activities at Headquarters; and $6.45 million for the Department of Safety and Security.

Further, the Assembly is also asked to approve $11.37 million net for 2012, after taking into account the estimated unspent $34.96 million balance for the 2008-2011 period, as well as to approve the continued financing of associated costs from within the approved Capital Master Plan budget.

The report of the Office of Internal Oversight Services titled audit of Capital Master Plan procurement and contract management, including change orders (document A/66/179) assesses the adequacy and effectiveness of the key controls over the plan’s activities in those areas.  The OIOS credits the Office of the Capital Master Plan with creating an appropriate internal control structure, with segregation of duties, to review and evaluate guaranteed maximum price proposals, in order to attain the best value, and with creating rigorous arrangements to achieve the required quality level.

Noting that it took the Office of the Capital Master Plan between 29 and 174 days to approve the change orders under review and that change orders cannot be paid until approved, the OIOS states that long approval times may negatively affect trade contractors’ cash flows, giving rise to claims and disputes between the contractors and the construction managers.  It notes the high number of change orders on some contracts, but states that the reasons for initiating change orders were not adequately explained.  Although the change orders were approved correctly, why change occurs and who is accountable could not be answered.

Introduction of Reports

The Committee opened the meeting by discussing special political missions.

MARIA EUGENIA CASAR, Assistant Secretary-General and Controller, introduced the Secretary-General’s reports on estimates in respect of special political missions, good offices and other political initiatives authorized by the General Assembly and/or the Security Council (documents A/66/354 and Addenda 1 to 5).  She said that, as in 2011, the budget proposals for special political missions for 2012 were organized around thematic clusters and included in the designated reports:  thematic cluster I:  special and personal envoys and special advisers of the Secretary-General (document A/66/354/Add.1); thematic cluster II:  sanctions monitoring teams, groups and panels (document A/66/354/Add.2); thematic cluster III:  United Nations offices, peacebuilding support offices, integrated offices and commissions (document A/66/354/Add.3).

The budgets for the larger missions were presented in separate addenda:  United Nations Assistance Mission in Afghanistan (UNAMA) (document A/66/354/Add.4); United Nations Assistance Mission for Iraq (UNAMI) (document A/66/354/Add.5); and United Nations Support Mission in Libya (UNSMIL) (document A/66/354/Add.6), she said.  The total requirements of some $32.6 million were included in Table 1 of document A/66/354.

Efforts had been made to adapt and follow as closely as practical, the previously used format and presentation of peacekeeping operation budgets, she said.  As requested by the ACABQ and the Assembly, information on extrabudgetary resources available for various political missions was included in Annex I of the main document.  The status of mandate renewals or extensions was contained in sections A and B of document A/66/354.

The total requirements for special political missions in 2012 reflected a decrease of $22 million from 2011, she said.  Approximately $414 million was required, or some 67.1 per cent of the total, for the two largest missions, UNAMA and UNAMI.  A total of 4,815 positions were requested for 2012, a net reduction of 21 posts from 2011.  UNAMA and UNAMI accounted for 3,648, or 76 per cent, of those positions.

Introducing the Advisory Committee’s report for estimates for special political missions (document A/66/7/Add.12), Chair COLLEN V. KELAPILE noted that comments on the Secretary-General’s proposals would be issued shortly in a separate report.  The ACABQ had previously expressed the view that the Secretary-General’s projections of $1.08 billion for special political missions for the 2012-2013 biennium could prove optimistic and the estimates proposed for 2012 validated that position.

He said the Advisory Committee’s comments and recommendation with regard to resources requested in the three thematic clusters, as well as UNAMA and UNAMI, were contained in section III.  Regarding cluster I, the Advisory Committee recommended approving the Secretary-General’s proposals, with the exception of the proposal for a new post at General Service level in the Office of the Special Adviser on the Prevention of Genocide.

In terms of cluster II, he said the Advisory Committee noted the increase in the overall provision of the cluster of some $844,000, primarily due to the fact that funding for the Panel of Experts on Libya was for a full 12 months, whereas the budget in 2011 was based on 7 months.  It supported approval for two of the three new positions requested, but did not recommend the establishment of the proposed position in the Counter-Terrorism Executive Directorate.  Adjustments were also recommended for the non-post resources proposed for the Panel of Experts on the Democratic People’s Republic of Korea, the Group of Experts on Côte d’Ivoire and the Support to the Security Council Committee established pursuant to resolution 1540 (2004).

Regarding cluster III, the Advisory Committee noted the provision for 2012 reflected a reduction of some $3.75 million when compared to the approved 2011 budget.  It had recommended reductions in the level of resources proposed for five special political missions (United Nations Office for West Africa (UNOWA), United Nations Political Office in Somalia (UNPOS), Cameroon-Nigeria Mixed Commission (CNMC), United Nations Regional Centre for Preventive Diplomacy for Central Asia (UNRCCA)and United Nations Regional Office for Central Africa (UNOCA)), as explained in paragraphs 71 to 167.  It had not recommended approval of the two additional Political Officers requested for UNOWA, nor the additional National Officer position requested for UNOCA.  It had no objection to the reclassification of the UNPOS Chief of Staff to D-1, but recommended that it only be implemented after the planned redeployment of the Deputy Representative of the Secretary-General to Mogadishu.

For UNAMA, the Advisory Committee was recommending approval of the Secretary-General’s estimates for 2012, as well as approval of his proposal to abolish 26 international positions.  The Mission’s budget reflected reductions under operational costs mainly owing to the completion of one-time infrastructure projects in 2011 for which there were no further requirements in 2012.  Those reductions would be partially offset by significant increases for salary costs, owing to higher salary entitlements, as well as the improved vacancy situation.  During the current period, several unforeseen security projects were implemented to meet new security requirements in Kabul and field offices.

The Advisory Committee also recommended approval of the $172.8 million estimated 2012 requirements for UNAMI, which represented a decrease of $27.3 million from the approved 2011 budget, he said.  A total of 41 new positions were proposed for the Mission, while 136 others were proposed for phased abolition in 2012.  Given that a further 238 positions were vacant as of 31 October 2011, the Advisory Committee believed the Mission should review its staffing requirements and reflect that review’s results in the next budget submission.

In terms of UNAMI’s operational costs, he noted that $23.5 million was proposed under facilities and infrastructure for 2012.  That was an increase of $1.5 million compared to 2011 mainly due to the maintenance, utilities, alteration and renovation required for Kirkuk, Basra and the new integrated compound in Baghdad.  Yet, the construction and renovation planned for the Kirkuk and Basra premises in 2011 had changed to rented accommodation for 2012 with no explanation.  Consequently, it was unclear what factors contributed to the proposed requirements for 2012.

At the same time, he noted that the architectural firm selected for the construction of an integrated compound in Baghdad had failed to complete the design phase.  As a result, the Mission had chosen to consolidate a compound adjacent to its existing compound into a single integrated compound.  However, the proposed budget for 2012 did not provide a clear and comprehensive plan for short- and long-term requirements for the work envisaged in that plan.

In that context, the Advisory Committee emphasized the need for close monitoring and oversight of all construction and renovation projects.  It further recommended that detailed information regarding UNAMI’s plan for its premises in Iraq, including the scope for renovation and construction and the related resource requirements, be provided directly to the Assembly at the time of its consideration of estimates for special political missions.

Finally, he said the Assembly should request the Secretary-General to assess whether the present system for presenting the budgetary proposals for special political mission in thematic clusters required any adjustment.  Future budget proposals for such missions would also benefit from more systematic inclusion of information on cross-cutting issues that would impact the budgetary requirements being put forward.

Statements

BROUZ RALPH COFFI (C ôte d’Ivoire), speaking on behalf of the African Group, said the special political missions’ budget had been prepared against the backdrop of the Secretary-General’s call for a 3 per cent across-the-board budget cut.  Such missions must be adequately financed for effective mandate implementation.  “The Group will, therefore, scrutinize all the proposals and reject unfounded and unjustified arbitrary cuts,” he said.  The two largest missions, UNAMA and UNAMI, had significantly contributed to the exponential growth in resources for all the missions in the last decade.  As the missions’ budget was included in the overall regular budget, an erroneous impression had been created that the regular budget had significantly grown during that period.  He concurred that the missions’ budget should include the presentation of information on all available resources from different funding sources.  Accordingly, the amount of extrabudgetary resources given to those missions should be fully disclosed, in order to allow for a clear, transparent analysis of proposed resources, as compared with available capacity from all types of funding and the corresponding needs.

He noted that the overall vacancy rate for special political missions was 19.4 per cent for international staff and 9.9 per cent for national staff, as of 31 August 2011, compared to 28 per cent and 19 per cent, respectively, a year earlier.   The African Group appreciated the actions taken by the Department of Political Affairs, Department of Field Support and the Office of Human Resources Management to address the high vacancy rates.

Due to the unique character of the special political missions, they did not follow the programme planning and budgeting cycle of the regular budget, he said.  Furthermore, such missions could be approved at any time of the year and had a tendency to evolve rapidly during the course of implementation.  Thus, their timing and related resource requirements were almost impossible to predict accurately.  He saw merit in separating the special political missions’ budget from the other parts of the regular budget and dealing with those missions financially in a way similar to the peacekeeping missions.  That separation would increase budget transparency and give a more accurate picture of the Organization’s budgetary situation.  He, therefore, looked forward to the Secretary-General’s report on reviewing the current funding and backstopping arrangements for the special political mission requested in resolution 65/259.  He trusted the ACABQ would issue its own report on the Secretary-General’s report, in time to consider it during the current session.

NICHOLAS CHAPDELAINE (Canada), speaking also on behalf of Australia and New Zealand, noted that the Secretary-General’s updated estimates for special political missions for 2012-2013 represented a $155 million reduction from the provisions approved by the Assembly in resolution 65/262.  He commended the Secretary-General for his ongoing effort to enhance fiscal discipline in those activities, which represented 20 per cent of the regular budget of the United Nations.  However, that reduction was related more to a decrease in the level of operations of some key missions, rather than the implementation of specific and targeted efficiency measures and he strongly encouraged the Secretariat to identify a greater level of systemic and sustainable efficiencies in preparing for future budgetary appropriations for special political missions.

He agreed with the ACABQ that greater clarity was required on the impact of cross-cutting issues related to special political missions, he said.  He also encouraged the Secretariat to further develop and provide clear performance indicators to facilitate better budgetary analysis of those missions and to provide a more holistic view of progress achieved.  Among other things, those performance indicators should be realistic and time-bound.

He welcomed the mandate extension of UNAMA earlier this year and emphasized the importance of providing adequate assistance to the Afghan Government in reinforcing its leadership and ownership of the country’s security, political and economic development.  He voiced support for the Secretary-General’s priorities for UNAMA in the field of peace and reconciliation, the promotion and protection of human rights and support to the Kabul Process.

Acknowledging the unique budgetary nature of special political missions, he noted that they were susceptible to more budget fluctuations than other parts of the regular budget and, thus, complicated analysis of the budget as a whole.  He looked forward to the ACABQ report on that issue and would actively engage in discussions on the backstopping of the special political missions.  Reiterating concern regarding the lateness of the introduction of documentation on these important items, he said the importance of those missions — as well as the fact that they represented 20 per cent of the regular budget — should warrant more careful review than in past years.

MONDO YAMAMOTO (Japan) strongly supported each special political mission’s mandate and appreciated the Secretary-General’s initiative to propose a $1.08 billion budget for those missions in his 2012-2013 proposed programme budget, which was $120 million less than the revised appropriations for the previous biennium.  He underscored the importance of seeking the most efficient, effective ways to allocate limited resources.  He expressed concern, however, that the $617.62 million proposed budget allocation for 2012, for the first half of the biennium, exceeded half the total amount for the biennium’s budget by some $78 million.  Member States should bring together their insights and ideas to determine the most efficient, effective way to maintain the Secretary-General’s proposal in the proposed biennium budget.  He called for efforts to prepare the 2013 budgetary request, or the second year of the biennium, with prudence, in order to fall within the original limits of the proposed programme budget.

He welcomed the recommendations and comments in the ACABQ’s related report (document A/66/7/Add.12), which had carefully and technically scrutinized each mission’s mandate.  They would be the best starting point to begin discussions.  He highlighted the important activities of the Sanction Monitoring Panels.  Japan would continue to fully support such activities, so they could achieve the Council mandates.  He shared Member States’ concern that the Committee would not have enough time to properly discuss and scrutinize the reports of the Secretary-General and the ACABQ on funding and backstopping of the special political missions during the main session.  He strongly hoped that sufficient time would be allocated to discuss those reports.

NORMA GOICOCHEA ( Cuba) said the level of resources allocated to special political missions amounted to some 25 per cent of the regular budget, which had caused “serious distortion” among the various priorities set by the General Assembly.  In addition, the existing procedure for approval and follow-up deprived the Assembly of any possibility to monitor the missions.  That was quite unlike the case of peacekeeping operations, for which the Assembly’s Special Committee had been established.  Moreover, there was no specific mandate for establishing special political missions; they entered into force following only an exchange of letters between the Secretary-General and the Security Council, despite the fact that special political missions dealt with extremely sensitive matters in international relations.

Outlining other concerns, she said those missions were often mandated to address topics that had not been specifically mandated by the General Assembly, and as such “their establishment constitutes a new violation of the prerogatives of the General Assembly and the Security Council and reflects contempt for said prerogatives by the Secretariat, infringing on the intergovernmental process in favour of the interests of a few”.  Further, despite the level of resources needed for their funding, no actual efficiency measures to generate savings were being observed.  Based on all those concerns, Cuba rejected the Secretariat’s unacceptable tendency to introduce the reports related to those missions near the end of the Committee’s work.  “We wonder if this obvious inefficiency […] owes to the policy decision to prevent thorough analysis of the budget submission in favour of the interests of some countries, particularly those using the United Nations to develop their military adventures and interventionist doctrines,” she queried.

Turning next to matters regarding resources for the Special Adviser on the Prevention of Genocide, she said that, while Cuba firmly condemned genocide, it categorically rejected the new inclusion of the so-called Special Adviser on the responsibility to protect, even though the Assembly had not issued any statement thereon.  Such inclusion reflected a clear policy position by the Secretariat, as well as “an evident contempt for Member States’ decisions”.  She said that the current presentation was deliberately opaque and it mixed up the mandate of the Special Adviser on the so-called responsibility to protect with that of the Special Adviser on prevention of genocide, “evidently to prevent any analysis of the proposed resources of the first one, knowing there is no General Assembly agreement of the matter”.  Cuba requested that all human and financial resources requested for the functioning of those mandates be identified, regardless of the fact that the Adviser on the responsibility to protect received $1 a year in salary.

She was further concerned that the report made clear the Secretariat’s intention to legitimize the concept of the responsibility to protect, although there was no intergovernmental mandate, by holding an interactive debate that had aimed to facilitate an exchange of views in the Assembly on the matter.  Based on those and other recommendations, Cuba would make specific proposals aimed at modifying the terms of that Special Adviser.

NORFARINA MOHD. AZMEE ( Malaysia) said the ACABQ’s report on the special political missions recognized the reduction in resource requirements under operational costs, which compared to the 2011 approved budgets.  But, more information on measures taken to achieve operational efficiencies in the missions could have been incorporated into the Secretary-General’s report to the Committee.  She expressed concern over the late introduction of the agenda item, just prior to the session’s conclusion, as had been the case in previous years.  Member States should be given a practical timeline to address the item, as it involved complex proposals involving hundreds of millions of dollars for the missions.  Concerning thematic cluster II on sanctions monitoring teams, groups and panels, she welcomed the further improvement of the Council’s procedures and working methods for those teams, groups and panels.  She maintained the highest respect for the primacy of Council resolutions, but she believed that aid should always be rendered to third States that had been inadvertently affected by sanctions, in accordance with the principles of international law.

Concerning thematic cluster III on United Nations offices, peacebuilding support offices, integrated offices and commissions, particularly UNAMA, she took note of the $241.5 million net resource requirements for UNAMA for the 1 January 2012 to 31 December 2012 period, a net decrease of $15.6 million, or 6.2 per cent, from the previous period.  She supported the ACABQ’s request that the Secretary-General continue his efforts to monitor progress and ensure that the security construction work at UNAMA was completed on schedule and within the allocated resources.  He strongly supported the Afghan Government’s reconciliation and reintegration process.  For Afghanistan to achieve long-term stability, greater and more sustainable growth and development, it was necessary to give top priority to its human capacity-building.

ISMAIL BASSEL AYZOUKI ( Syria) noted that the shortcomings associated with preparing budgets for the special political missions still existed.  He expressed deep concern over the manner in which the budget of the Special Envoy for the Secretary-General for implementing Council resolution 1559 (2004) was prepared, saying it was compromised by gross violations of Assembly resolutions 55/231 and 63/261.  It repeatedly exceeded the Special Envoy’s mandate and distorted the legislative mandate the Council had given the Secretariat.  It was unacceptable to thrust Syria’s name in the budget of that Special Envoy, since Syria had complied with all the terms of resolution 1559.  It had withdrawn all its security forces from Lebanon already and it had done so independently.  Under the terms of Council resolution 1680 (2006), the Syrian Government had been encouraged to respond positively to Lebanon’s request to establish diplomatic relations and secure borders with it.  But, that was not part of the Special Envoy’s mandate.

He asked for clarification on why the Special Envoy concentrated on bilateral issues that were outside of the ambit of the United Nations and distracted attention from the real problem in the region, which was Israel’s occupation of Arab lands.   The Special Envoy’s report should have referred to the fact that Israel had not implemented resolution 1559.  Implementation of the remaining provisions of resolution 1559 should focus on the need for Israel to withdraw from the remaining occupied territories.  The Special Envoy had exceeded the mandate of resolution 1559, in order to serve a personal agenda that contravened his United Nations mandate.  He called for terminating the Special Envoy’s mandate on those grounds.

Mr. FERNÁNDEZ ELVES ( Mexico) said that when the Secretary-General had presented the Organization’s budget earlier in the session, Mexico had expressed its concern regarding the fact that many of the concrete proposals aimed at reducing the resource requirements were difficult to materialize, particularly in the case of special political missions.  That was related to their very nature, which pertained to the issues of international peace and security, which entailed that the requirements for such missions were not predictable in the two-year framework of the regular budget.  In that regard, he emphasized the ACABQ finding that the Secretary-General might have misjudged the potential for savings under special political missions and that it would have been much better if a greater level of sustainable efficiencies had been identified.

He also recalled the Advisory Committee’s recommendation in the context of its analysis of the proposed regular budget that the Secretary-General must show the utmost restraint in presenting additional requirements for special political missions.  Mexico’s concerns, however, were not purely budgetary.  He expressed the delegation’s disappointment that the ACABQ had thus far been unable to present its recommendations on the report on the backstopping arrangements for special political missions.  The General Assembly had requested the Secretary-General to present such a survey more than a year ago, and while that document had been submitted in October, a corresponding report by the ACABQ had not.

Mexico believed that the Secretary-General’s report implied that the Assembly would have to consider an important option on the way in which those missions were funded and backstopped and, therefore, the Committee needed to consider the issue in a timely manner.  Yet, as things stood, he was concerned that the Committee had been put in a “difficult situation”, which might even affect its ability to agree on a 2012-2013 budget.  He, therefore, respectfully appealed to the ACABQ to make every effort to ensure that the Committee could take advantage of its invaluable analysis as soon as possible, which would be a prerequisite for bringing negotiations to a successful conclusion.

RASHID BAYAT MOKHTARI (Iran), in regard to the thematic cluster I, Part C, on the Special Adviser to the Secretary-General on the prevention of genocide, reiterated Iran’s commitment to adhere to internationally recognized laws, rules and regulations aimed at preventing genocide.  But, he stressed that the concept of responsibility to protect had not been approved by the Assembly.  The attempt to create artificial mandates and posts to entertain an unapproved concept was counterproductive and a serious breach of the Assembly’s rules and regulations.  Therefore, Iran disagreed with the notion stipulated in the Secretary-General’s proposal to create a new administrative assistant post for such purposes within the Office of the Special Adviser.  Iran endorsed the ACABQ’s rejection of that proposal.

Concerning thematic cluster II on sanctions monitoring teams, groups and panels, he said the Council sanctions levied against Iran were unlawful and targeted the civilian population based on unfounded and baseless allegations.  He rejected such sanctions and viewed them as politically motivated measures aimed at depriving the Iranian people of their inalienable right of access to nuclear energy for peaceful purposes.  He opposed funding the Expert Panel proposed by the Secretary-General in Section G of document A/66/354/Add.2 and considered such funding to be unlawful.

BRUNO BRANT ( Brazil) expressed support to the positions expressed by the African Group.  Brazil was very concerned with the lateness of the introduction of the budgets for the special political missions, which prevented the Committee from carefully scrutinizing those budgets.  That situation was not sustainable and could not continue.  Urgent action was needed to change the way these budgets were considered.  Brazil sought clarification on the status of the report on backstopping for those missions.  The Secretary-General’s report was issued in early October and Brazil was concerned with the delay by the Advisory Committee in publishing its sister report.

Ms. CASAR said she had taken note about the repeated concerns on the lateness of the document and she could only offer to make an extra effort in the future and to work with the Advisory Committee to solve that problem.

Asked by the chair if the report would be published soon, Mr. KELAPILE said the ACABQ was making efforts to provide the best expert advice in a timely manner.  He shared the frustrations and disappointments of the Fifth Committee regarding delays.  There had been significant back-and-forth with the Secretariat on the issue.  But, unfortunately, he didn’t think they had come anywhere closer to resolving it.  He agreed a permanent solution to the problem must be urgently found.

Specifically with respect to the lateness of the report on backstopping special political missions, he said it was very hard to say if it would be available in time.  The time at which the report was provided was, in fact, not issued according to the agreed timeline.  Its issuance in October was very late as far as the Advisory Committee was concerned.  Currently, his Vice-Chair was working to resolve the issue.  Progress had been made, but it was not yet enough.  Still, the Advisory Committee was working on the report today.

He underlined the time required to interact with the Special Representatives of the Secretary-General in order to allow the Advisory Committee to arrive at useful advice.  Moreover, in the case of this report, an additional meeting with the Secretariat had been required.  Currently, the Advisory Committee was working on a draft of the report.

Ms. GOICOCHEA ( Cuba) said the Assembly could not take action without full consideration and she wondered if a decision could be taken on the issue during the current session.  It seemed that a decision was being imposed by the Secretariat and the ACABQ, in order to facilitate the work of the Fifth Committee.  She stressed that her delegation needed specific answers on its questions regarding the Special Adviser on genocide before taking action.

The Chair noted the “terrible decision” facing the Committee.  The decision had been taken in the past but if the Member States took the decision that the budget of the special political missions had to be again separated, then that would be their judgement.

Introduction of Reports

MICHAEL ADLERSTEIN, Assistant Secretary-General and Executive Director of the Capital Master Plan, introduced the Secretary-General’s ninth progress report on the Plan’s implementation (document A/66/527).  Since the Plan’s groundbreaking in May 2008, some 6,000 staff had been relocated to various on-campus and off-campus swing spaces.  In the past year, the most significant and visible accomplishments were replacement of the glass curtain wall in the Secretariat building, the abatement of asbestos and removal of asbestos materials from the Secretariat and Conference Buildings, and construction of an electrical vault in the basements.  Major progress was made in awarding guaranteed maximum price contracts for more aspects of the project and in coordinating donations with Member States for particular rooms.

At present, the Organization remained within reach of completing the project with a variance of no more than 4 per cent above the original budget, he said.  The infrastructure and Secretariat portions of the project were slated for completion on schedule, while the Conference Building and the General Assembly Building would be completed about one year behind schedule.  A proposal had been developed to partially comply with the Assembly’s request to absorb into the budget the Plan’s associated costs, including that of the secondary data centre, which were not in the original budget.

Concerning work in the Secretariat Building, he noted progress in installing new equipment and walls on many floors.  In July 2012, the building’s renovation would be completed and it will begin to be reoccupied, with staff on the middle floors brought back first, followed by those on the lower floors and then the top floors.  Between 200 and 300 staff would be relocated each weekend until the entire process was completed in early December 2012.  The Secretary-General and his staff would reoccupy the building last.

Concerning work in the Conference Building, he said renovation began in March 2010.  The historic appearance of most of its large rooms would be restored, but the rooms would be more functional, energy efficient and safer.  The building was redesigned to take into account enhanced security upgrades following the conclusion of discussions with, and the receipt of funding, from the host country.  Between December 2012 and January 2013, conference functions would be relocated from the temporary North Lawn Building to the restored Conference Building.  The Security Council would return to its renovated Chamber.  Once emptied, the North Lawn Building would be reconfigured to house the functions of the General Assembly Building, which would undergo construction in early 2013.  Extensive work in the basement was under way.

As to procurement, he said the Secretariat continued to work to ensure that all procurement opportunities were communicated as widely as possible, with special emphasis on developing countries and countries with economies in transition.  To date, 15 per cent of the value of trade contracts awarded by the Plan’s construction manager to subcontractors had been to non-United States firms.  The Plan would result in the permanent elimination of 350 parking spaces due to the Department of Safety and Security’s recommendation to restrict parking under the General Assembly Building.  The Assembly authorized a donations programme for the Plan and several Member States had expressed their willingness to participate and help decorate specific rooms or spaces.

The Plan remained on track to meet or exceed sustainable energy and water consumption goals, he said.  Energy consumption would be reduced by at least 50 per cent, greenhouse gas emissions by at least 45 per cent and fresh water consumption by at least 40 per cent.  The Plan was on track to meet or exceed applicable “green building rating” national standards in use by various countries.  In addition, 95 per cent of the debris removed from the compound had been recycled or diverted from landfills.  The Plan was one of the safest projects under way in the host country.  The project schedule remained unchanged for the Secretariat and the entire Headquarters renovation would be completed by the end of 2014.  The delay for the Conference and General Assembly Buildings was due to the enhanced security upgrade.

Turning to financing, he said as of 7 December 2011, a total of $1.63 billion had been committed, representing 86.7 per cent of the original net budget.  The level of committed funds significantly reduced the risk of unexpected, adverse surprises in the remainder of the project.  That reduced risk and the increased knowledge of the complications of working within the United Nations compound had reduced the contingency and escalation provision.  Since the first year of the project under the accelerated strategy, the projected cost overrun had been cut by more than half from $219 million, or about 10 per cent, over budget.

Thanks to careful project management since the 2008 groundbreaking, value engineering initiatives incorporated into the project’s design, as well as implementation of many efficiency measures, the projected net Capital Master Plan cost had been lowered to $1.95 billion, he said.  That reduced the net construction budget deficit to $74.3 million by the end of May 2011, slightly down from the deficit of $80.1 million reported to the Assembly as of September 2010.

The original Plan budget provided for office swing space rent until September 2012, he said.  Given the present project schedule, an extra $42.6 million provision for leases had been added to the projected cost-to-complete.  The Plan’s total resource requirements, including associated costs, would increase the estimated worst-case budget deficit to $284.3 million.

The Secretary-General’s ninth annual progress report included a proposal that would allow the Secretariat to significantly reduce the funding gap with regard to the estimated budget deficit, he said.  The Plan’s funding had accrued $104.1 million during the project and the working capital reserve held $45 million.  The progress report proposed that those funds be allocated to finance the Plan.  Doing so would resolve a significant portion of the project’s funding problem.  If the Assembly allowed the interest generated by the Plan’s fund and the working capital reserve to be applied to the project, all but approximately $131.9 million of the cumulative net project and associated costs would be covered.  That remainder could require more financial resources beginning in 2013, requiring an assessment of funds in 2012.

“We continue to be hopeful that with prudent management of programme changes, refinements, ongoing value engineering, and continuous implementation of cost-efficiency measures, we will be able to continue making progress towards reducing our budget deficit, reducing our financial requirements in 2013,” he said.  In order for the Plan to avoid delays and remain on track, most of the $149.1 million of interest income and working capital reserve funds would need to be available before the first quarter of 2012.  Authorization was needed to commit those funds in the next three months.

In closing, he said the complex, multi-layered Plan had made significant progress in the past year and remained on a very positive course.  It was successfully reaching important benchmarks in less than six months.  At present, the Plan was at its most intense phase of construction, with more than 1,000 construction workers on site daily.  A funding shortfall would immediately slow or stop work, postpone re-occupancy of the Secretariat and Conference Buildings and delay the start and completion of the General Assembly Building into 2015.

“I appeal to this Committee for additional funding authority in the amount of $149.1 million so the CMP Office can proceed and deliver the product in which we have already invested four years and over $1 billion,” he said.

Introducing the Secretary-General’s proposals for financing associated costs for 2012 from within the approved budget for the Capital Master Plan (document A/66/527/Add.1), Ms. CASAR said she would also brief on the financial implications set out in the ninth annual progress report on the implementation of the Capital Master Plan (document A/66/527).  She said temporary increases in staffing and operational costs were required to support construction activities.  As was indicated in the third, fourth and fifth annual progress reports, such costs were never included in the original budget and were needed with respect to the Department for General Assembly and Conference Management, Department of Public Information, Office of Central Support Services (within the Department of Management), Office of Information and Communications Technology and the Department of Safety and Security.

She recalled that the Assembly had approved associated costs of:  $30.27 million for 2008-2009; $42.07 million for 2010; and $58.87 million for 2011.  The total approved amounted to $131.21 million.  The available resources and cash flow had been managed as prudently as possible.  A Steering Committee chaired by the Under Secretary-General for Management and attended by senior representatives of all departments and offices concerned met monthly to jointly scrutinize every requirement.

The projected requirements for 2012 were $46.32 million, she continued.  However, a balance of unspent approved resources amounting to $34.96 million was projected at the end of 2011.  That would offset the 2012 requirements for a net incremental need for 2012 of $11.37 million.  Further, over the duration of the Capital Master Plan, the estimated total through 2013 for associated costs was $146.8 million.  That was $15.7 million less than project last year and some $25.46 million less than the projected amount from 2010.  Moreover, the estimates for associated cost had decreased by 15 per cent from 2009 projections.

Following a detailed review, however, it was clear, she said, that the Capital Master Plan would not be able to absorb the associated costs, the cost of creating and operating a secondary data centre through to 2011 and the cost of providing for swing space rent after October 2012.  Those activities were estimated to cost up to $206 million, while the Capital Master Plan was still facing a funding shortfall on the renovation works of $74.28 million.  There was now a diminishing prospect of future cost savings, since most of the renovation’s scope had been contracted.

She said that to absorb those additional costs without jeopardizing the scope and timeline of the Capital Master Plan, the Secretary-General had been looking for additional resources without calling for new cash from States.  He was, thus, seeking the Assembly’s approval to access the identified ring-fenced resources of $104.1 million in interest accrued to the Capital Master Plan and the $45 million of its working capital reserve.  Should the Assembly agree, no additional assessments would be required.

Continuing, she said approximately 93 per cent of the projected costs to the end of 2012 related to one-off capital expenditures, such as the construction of a new broadcast facility or the large-scale acquisition of furniture.  There were also major recurrent expenditures for the duration of the Capital Master Plan, such as security, as well as logistical and operational management of temporary buildings.

The Secretary-General’s ninth progress report outlined schedule changes resulting from enhanced security upgrades, which included the delayed renovation of the Conference Building (completion expected late 2012); the Assembly building (completion expected mid-2014); and the renovation of the South Annex and Library Buildings (yet to be determined).  From a financial perspective, there was no impact on the quantum of associated costs.  Moreover, because the majority of associated costs resulted from renovations to the Secretariat and Conference Buildings, the projected associated costs would decline sharply after 2012.

In sum, the Secretary-General was seeking approval for an $11.37 million net incremental requirement for 2012, she said, and also approval to access the interest of $104.1 million that had accrued in the Capital Master Plan account and $45 million of its working capital reserve, in order to avoid an additional assessment for 2012.

Introducing the report of the Board of Auditors for the year ended 31 December 2010, Volume V, Capital Master Plan (document A/66/5 (Volume V)), HUGH O’FARRELL, Director of External Audit of the Audit Operations Committee, said the project, as of 31 March 2011, was forecasting a $79 million, or 4 per cent, over-expenditure against budget.  Yet, that forecast was incomplete and not sufficiently analytical, because it did not include:  a provision for the most likely costs of identified risks; a robust and auditable estimate of the cost of all chance orders through project completion; and all projected swing space rental costs.  It was, therefore, uncertain whether the remaining contingency allowance was sufficient to see the project to completion, or if the current report overrun would increase.

He said the Board considered that that situation was likely to worsen, although further over-expenditure could be minimized if the Administration took quick and firm action to address the Board’s concerns.  Moreover, with the project moving to completion, the time had come to resolve the issue of associated costs, so that the Capital Master Plan could proceed under greater certainty.  Currently, he noted, there was no viable solution for security requirements relating to the Dag Hammarskjöld Library and South Annex building, which the Office of the Capital Master Plan estimated would cost $65 million to renovate, and were on hold.

Pointing to the project’s history of “over-optimistic forecasting”, and the slippage in completion date from mid-2013 to mid-2014, he noted that further delays in the migration of staff back to the Secretariat building would be costly and disruptive.  The new work on the Conference and Assembly buildings necessitated some $100 million of protective work, supported by host-nation funding.  Additionally, the Board had identified a range of further pressures on the project schedule that would need careful management, including the reliance on third parties out of the Organization’s control to deliver critical work.

In other areas, he said the Board highlighted other important issues and risks.  Facility Management Services might not be ready and able at the handover to take on the state-of-the-art building control systems being installed.  While those risks had been identified, the compressed time frame for completion increased the probability of handover problems.  Also, in the Board’s assessment, the Administration was not taking full advantage of the potential for improved office solutions, such as flexible desk-use policies that could offer a major cost-saving opportunity by allowing more staff to be housed in the Secretariat. Benefits of doing so were still attainable, but the Administration would have to adopt a rigorous, highly supportive change-management approach to handle the inevitable cultural changes necessary in staff working practices.

Next, MARIO BAEZ, Chief of the Policy and Oversight Coordination Service of the Department of Management, introduced the Secretary-General’s report on implementation of the recommendations of the Board of Auditors contained in its report on the Capital Master Plan for the year ended 31 December 2010 (document A/66/324).  As at 22 August 2011, 3 out of 15 recommendations, or 20 per cent, had been implemented; 11 recommendations (or 73 per cent) were in the process of being implemented.  One recommendation was not accepted by the Administration.  In terms of the 20 recommendations from the previous year, he said 17 (or 85 per cent) were implemented; 2 (or 10 per cent) were in progress; and 1 (5 per cent) had been overtaken by events.

Introducing the Advisory Committee’s report on the Capital Master Plan (document A/66/7/Add.11), Mr. KELAPILE welcomed the donations made by States and emphasized the importance of identifying and documenting lessons learned during the Capital Master Plan’s implementation in order to inform future large-scale capital improvement projects.  The Plan’s estimated completion date was one year behind schedule, largely owing to implementing enhanced security measures.  Moreover, design work on the Dag Hammarskjöld library and South Annex buildings were currently on hold pending discussions with the host country on the protection requirements for those structures.  To ensure realistic forecasting, the Advisory Committee urged the Secretary-General to conclude those discussions as soon as possible and inform the Assembly of their outcome.

He said information on the CMP’s financial situation was set out in paragraphs 27 to 32.  As at 31 May 2011, the Plan’s total estimated cost amounted to $1.951 billion.  The budget deficit had been lowered to $74.3 million, or around 4 per cent of the total approved budget of $1.88 billion.  Yet, further resource requirements of $210.1 million for “worst-case scenario” lease costs, associated costs and the costs of the secondary data centre would bring the total consolidated cost to $2.161 billion, increasing the overall deficit to $284.3 million or 15.2 per cent of the approved budget.

He noted that, to cover some of those additional costs, the Secretary-General had proposed to use $149.1 million from the working capital reserve and the interest earned on the Plan’s fund.  The Advisory Committee’s report contained a table showing the potential impact of those funds on the project’s cash balance between October 2011 and May 2013.

Mindful that a cash shortfall could further delay the project, the Advisory Committee could, he said, recommend the Assembly’s endorsement of the Secretary-General’s proposal.  The extra resources, however, should be made available in a phased manner, starting with the working capital reserve and then, if necessary, interest income.  The Advisory Committee also urged the Secretary-General to continue to explore all opportunities to reduce the total cost to complete the project through value engineering and other cost-efficiency steps, and to provide detailed information in that regard in the next progress report.  The Advisory Committee’s overall recommendation on the Assembly’s action was set out in paragraph 56, he added.

In Section IV, the Advisory Committee addressed the financing of associated costs for 2012, he said.  Notwithstanding delays to the schedule laid out in the Secretary-General’s ninth progress report, the total project resource requirements for associated costs from 2008 to 2013 amounted to $146.8 million, largely owing to the purchase of furniture, the acquisition and implementation of the permanent broadcast facility and the asset management system, and the provision of security coverage.  While the Advisory Committee recognized the importance of ensuring that new audio-visual and broadcast systems were state-of-the-art, it regretted that the savings identified from value engineering were not utilized to lower the total balance of associated costs.  It reiterated its earlier recommendation that every effort be made to re-use furniture in good condition.

Weighing in on the Secretary-General’s report on proposals for financing associated costs for 2012 from within the approved budget for the Capital Master Plan, the Advisory Committee believes that, even if used, the working capital resource and the interest income will not sufficiently cover the full amount of associated costs to offset the existing budget deficit.  Therefore, the Assembly should, in the interest of transparency, ask the Secretary-General to clarify how the remaining requirements are to be met.  The Advisory Committee’s overall recommendations on that assembly action relating to financing associate costs were set out in paragraph 57, he added.

Finally, the Advisory Committee, in Section II, commented in detail on some of the issues raised by the Board of Auditors in its report on the Capital Master Plan for 2010, including regarding change control and succession planning.  It emphasized that management must make every effort to implement those recommendations by the agreed target dates.

CARMAN LAPOINTE, Under-Secretary-General for Internal Oversight Services, introduced that Office’s report on the audit of Capital Master Plan procurement and contract management, including change orders (document A/66/179).  It assessed the adequacy and effectiveness of the key controls over the Plan’s activities in those areas between 2008 and 2010, with a specific focus on guaranteed minimum price contracts for the Secretariat Building and the curtain wall, together valued at $335 million, and related change orders.

Outlining the conclusions of the OIOS, she said:  the contractual framework was adequately designed and had been operating effectively; an appropriate internal control structure had been established to attain best value in reviewing guaranteed maximum price contracts; the application controls related to trade contracts subject to competition by pre-qualified bidders could be improved in some areas; and controls related to change orders and contract amendments needed strengthening in several areas.  Also:  concerted efforts, within practical constraints, were being made to bring in international vendors for bulk purchases; allowances were correctly processed and continued usage complied with established procedures; and risk management, monitoring and quality-control processes were generally adequate.

The OIOS had, she said, issued eight recommendations — two of which were critical, high-risk ones — to the Office of the Capital Master Plan and to the Office of Central Support Services to strengthen procedures pertaining to the procurement and contract management of trade contracts.  All eight had been accepted and had been, or were in the process of being, implemented.  The first was addressed to the Procurement Division to improve oversight over the procurement of trade contracts by the construction manager, Skanska, to ensure the transparency and fairness of the procurement process.  A recent follow-up indicated that appropriate action had been taken.

The second high-risk recommendation was addressed to the Office of Central Support Services, which needed to ensure that change orders were justified and their origins were clearly identified before approval.  The delay in setting up the Post-Award Review Committee and the slow pace of its technical review, had led to a large backlog of cases for the Committee to review.  That indicated a need to reconsider current working arrangements.  Also, the reasons for initiating change orders were not adequately explained.  A recent follow-up indicated that implementation of the recommendation remained in progress, and further follow-up was scheduled in connection with the 2012 Capital Master Plan audit work plan.

GERTON VAN DEN AKKER, Delegation of the European Union, said while members supported the Capital Master Plan and progress it had made, he was concerned with the continued “slippage” of the project and its budget implications.  Delays affecting the General Assembly Building, the Dag Hammarskjöld Library and South Annex Building and their related costs would strain the budget even more.  He looked forward to the Secretary-General’s response to the question asked by the ACABQ to clarify how the remaining requirements were to be met.

Another concern was that the Capital Master Plan lacked control over the volume of changes to the project, which only led to delays and cost increases, he said, stressing that the administration should have an effective governance mechanism in place to deal with those issues.  He expected the Secretariat to continue to seize opportunities presented by the current economic climate to lower contract and operations costs, with the aim of bringing the project back within the agreed budget.

Supporting the ACABQ observation that lessons should be applied to the remaining stages of the Capital Master Plan and feed into other future large-scale capital improvement projects, he said all the above issues required and deserved thorough discussion in the Fifth Committee.  Regretting that Capital Master Plan reports were submitted late, he saw no other option than to defer the topic to the first resumed session, in order to have the necessary time to address the matter.

SHANNON WHITE (Australia), speaking also on behalf of Canada and New Zealand, said she had long been a strong advocate of the Capital Master Plan and was encouraged by the tangible progress that had been made during the current reporting period.  As the project moved into a critical phase over the next biennium, she was also encouraged by the Secretariat’s ongoing efforts to review lessons learned and identify the areas for other efficiency gains.  She urged the project to continue in that vein and welcomed further updates on progress.  She was naturally concerned about ongoing questions regarding how best to address costs and would closely examine all proposals on that matter.

Ms. AZMEE ( Malaysia) acknowledged the “significant progress” of the Capital Master Plan over the past year.  Yet, her delegation was concerned that the project’s completion time had slipped from mid-2013 to mid-2014, and that there was now a cost overrun of some 4 per cent above the current revised budget approved by the Assembly.  Malaysia maintained its full support for the recommendations of the ACABQ to ensure transparency in procurement activities and that associated costs needed to be addressed in a timely manner.  “We also believe that it would be imperative for the Secretary-General to constantly engage Member States to report on the overall status of the project, as well as explore every possible opportunity for implementing improved cost-efficiency measures,” she said.

She also suggested that more outreach activities should be conducted to allow companies from the developing world to participate in the procurement of products and services for the project, noting that such a move would reduce the overall costs and resolve the cost overrun.  Meanwhile, Malaysia would continue to support the effort to ensure adequate funding for the project and that it be completed within the projected time frame and without the risk of further cost increases.  To that end, she hoped that transparency and accountability among the Secretariat and the offices dealing with the Capital Master Plan would be enhanced.

DMITRY S. CHUMAKOV ( Russian Federation) said that, to save time, he would simply like to ask what type of expenditure Mr. Adlerstein was referring to in his statement regarding the beginning of 2012.  To what extent were these absolutely critical expenditures, so that they could remain within the budget?

Responding, Mr. Adlerstein said there were two issues:  change orders and the issue of expenditures in the early part of 2012.  He agreed that the number of change orders had been excessive.  A “fast-track” methodology had been used at the beginning of the project during work on the North Lawn Building and other swing spaces.  The foundations were built before a full plan for the entire North Lawn Building existed.  That saved time and cost, at certain trade-offs that resulted in change orders.  However, at this point, fewer change orders were expected.

He said that, with respect to the funding needs for the first quarter of 2012, there were large contracts that needed to be committed for the continuation of work on the Conference Building and for the work in the basements, as well as the furniture and the broadcast systems. That was all part of a series of contracts required to complete the construction that were scheduled as part of the sequence of work.  It was just a circumstance of timing that it looked like they all needed to be signed in the first quarter of 2012.  They were needed to keep the project moving towards completion of the Conference Building by the middle of 2012 and of the Secretariat by the end of 2012.

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For information media • not an official record