Speakers Concerned by Costs, Efficacy of Flexible Workplace Plan, Welcome Capital Maintenance Proposal as Budget Committee Examines Reports on Both Topics
Fifth Committee (Administrative and Budgetary) delegates today expressed concerns about the costs and efficacy of implementing a flexible workplace environment at United Nations Headquarters and welcomed the development of a long-term capital maintenance programme for the Organization as they scrutinized the Secretary-General’s proposals on both topics.
South Africa’s representative, speaking for the “Group of 77” and China, said that while he recognized the stated benefits of the proposal on flexible workplace arrangements aimed at enhancing staff satisfaction, as well as reducing office space and real estate needs, it would become difficult to measure overall productivity across the different functions performed by the Organization under such arrangements. He sought clarification of the related human resources policies and different departments’ specific requirements to determine whether such proposals could be successfully implemented.
Similarly, the representative of the Russian Federation said that the Committee should carefully consider the plans, with particular attention to their potential costs and savings. Regarding the proposed 2018-2037 programme intended to enable the Organization to project its capital maintenance requirements more accurately, he said that the methodology for making the gradual changes it entailed must be refined, and that the financial side of the project must be thoroughly re-worked before approving any request for funding.
The representative of Togo, speaking for the African Group, welcomed the development of a long-term capital maintenance programme. He emphasized the need to maintain buildings at duty stations, particularly for the Economic Commission for Africa and its subregional facilities, some of which had deteriorated to such a degree that they posed a threat to the life and health of delegates, visitors and staff. He hoped that the ongoing strategic capital review — aimed at providing a safe, healthy working environment for staff across the Organization —would facilitate the maintenance of buildings in all duty stations, and that best practices in implementing similar capital projects would be applied.
Stephen Cutts, Assistant Secretary-General of Central Support Services, presented the Secretary-General’s reports on both topics, while Carlos Ruiz Massieu, Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introduced that body’s related documents.
Mr. Cutts noted that the flexible workplace pilot project on the 18th and 19th floors of the Secretariat building had demonstrated the potential for its success, and that the Secretary-General wanted to implement it across 26 floors of that building and eight floors of the FF Building by February 2018. The move was expected to save enough space to enable the Secretariat to vacate several leased buildings when their leases expired. He said the proposed long-term capital maintenance project, to be implemented at the Organization’s owned and leased buildings at eight main locations and 20 subregional commission locations, would cost $110 million per biennium.
Also today delegates elected by acclamation Madhuka Sanjaya Wickramarachchige, of the Group of Asia-Pacific States, as Committee Vice-Chair to replace outgoing Vice-Chair Chamithri Jayanika Rambukwella, who was leaving to complete her tour of duty at the Permanent Mission of Sri Lanka, effective today.
The Fifth Committee will meet again at 3 p.m. 27 March to conclude its resumed session.
Introduction of reports
STEPHEN CUTTS, Assistant Secretary-General Central Support Services, introduced the Secretary-General’s reports on the Strategic capital review (document A/69/760), and Comprehensive business case for the application of flexible workplace strategies at the United Nations (document A/69/749).
The first report presented the findings and conclusion of the review used to develop a 20-year capital maintenance programme from 2018 to 2037 for the owned and leased buildings at eight main locations: Addis Ababa, Bangkok, Beirut, Geneva, Nairobi, New York, Santiago and Vienna, as well as at 20 subregional commission locations, he said. Those buildings had a total gross replacement value of $3.6 billion. The review aimed to project capital maintenance requirements more accurately so the General Assembly could consider requirements well in advance and reduce them by employing a life-cycle approach to managing real estate. The approach would include systematic surveying of existing conditions and planning capital improvements gradually, rather than the current reactive approach.
The report presented the estimated costs and schedule for identified renovation, replacement and upgrade projects for the first 10 years, he said. The review concluded that $110 million would be needed per biennium (in 2015 dollar terms); that figure was higher than the approved programme budget levels in recent bienniums for major maintenance alterations and improvements. The steady life-cycle approach to buildings maintenance would be less costly overall and less disruptive to normal business than the reactive approach, which had resulted in the need for large-scale and capital projects such as the Capital Master Plan and the Strategic Heritage Plan. The Secretary-General recommended that the Assembly ask him to report on the proposed 2018-2037 maintenance programme during the first part of its resumed seventieth session, including detailed information for the preliminary planned projects and the related cost estimates.
On the report on flexible workplace strategies, he said a comprehensive study of space utilization begun in July 2014 found that only 38 to 48 per cent of assigned workspaces were being used at any one time during the working day (depending on the time of day). A survey of staff satisfaction with current space arrangements and attitudes found that staff was ready for changes in the physical workplace, but had varying levels of understanding of flexible workplace strategies. The report presented five different planning profiles — each involving a different mix of space types specifically tailored to the needs of different departments. It also described the flexible workplace pilot project on the 18th and 19th floors of the Secretariat Building, and the positive feedback from participating staff.
The Secretary-General proposed implementing flexible workplace strategies across 26 floors of the Secretariat Building and eight floors of the FF Building between April 2015 and February 2018, resulting in efficiencies that would enable the Secretariat to vacate a number of leased buildings when their leases expired, he said. After that, the Secretariat would extend internal communications to broaden understanding among New York-based staff and management, conduct in-depth internal consultations with the affected departments to ascertain their needs; develop programmatic plans, floor layouts, designs and procure construction and reconfiguration activities foreseen in 2015; and develop refined project plans and cost estimates for the project phases foreseen for 2016 through early 2018.
The Assembly was requested to approve of the proposed scope of the flexible workplace project at Headquarters and authorize the Secretary-General to enter into commitments of up to $5.8 million during 2015 and use the Working Capital Fund and the Special Account on a cash flow basis. In his next progress report to be submitted at the main part of the seventieth session, the Secretary-General would present a funding proposal for the overall project, estimated at $49.6 million, taking into account the future savings in rental costs. Costs of the project at New York Headquarters were expected to be recuperated by 2020.
Statements
CARLOS RUIZ MASSIEU, Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), presented the views of that body in its two related reports. Regarding the strategic capital review (document A/69/811), he commended the Secretary-General on the development of the first extensive long-term capital maintenance programme for the Organization, and said that it would serve as a viable planning tool and facilitate the consideration and decision-making of the Assembly. Noting that the Secretary-General was seeking general concurrence with the principles explained in paragraph 36 of the Advisory Committee report rather than for specific projects or other major maintenance, alterations and improvements, he expressed support for those principles in the context of the strategic capital review. But the proposal for future incremental recapitalization based on a life-cycle replacement methodology should be refined and the costs and benefits of a preventative maintenance programme should be further detailed in the Secretary-General’s next report.
Turning to the report on flexible workplace strategies (document A/69/810), he said the Secretary-General had made a sound business case for a flexible workplace at Headquarters, based on a cost benefit analysis and on qualitative and quantitative benefits. Thus the Advisory Committee recommended that the Assembly authorize the Secretary-General to enter into commitments up to $5.8 million, on an exceptional basis, to use the Working Capital Fund and the Special Account to fund flexible workplace arrangements in the same amount on a cash-flow basis. Given the considerable cost of the personal information technology package, the Assembly should ask the Secretary-General to review it and its related costs for 2015 and report on any reductions in the context of his performance report for the biennium 2014-2015. Flexible workplace strategies should be incorporated into the Strategic Heritage Plan and the Secretary-General should assess the potential for its application across the Organization. He also welcomed the Secretary-General’s intention to continue to engage with staff representatives, as implementation of a flexible workplace should take into account their views and workplace environment needs.
LYLE DAVIDSON (South Africa), speaking for the “Group of 77” developing countries and China, said on the topic of strategic capital review that, with regard to project governance and lessons learned, the Organization must develop its existing in-house capacity and avoid, to the extent possible, the use of consultants to manage properties across all duty stations. While the Group shared the views of the Board of Auditors in general on capital budgeting and the use of contingency funds, the matter should be examined carefully and considered separately in each of the individual capital projects, taking into account best practices in the specific circumstances of each duty station, as well as the magnitude of the capital project. There should not be a one-size-fits-all approach. In addition, each major capital project should be separately budgeted and assessed separately from the regular budget to ensure transparency and accountability. Work to address health and safety risks, as well as other minor improvements, was needed immediately without sequencing. The term “major” capital projects must be clearly defined to ensure no unnecessary delays in capital improvements.
On the topic of flexible workplace strategies, he said that while the Group recognized the importance of organizational transformation initiatives that contributed to a modern, adaptable and effective United Nations, careful and thorough consideration was necessary before embarking on such new endeavours. The Group recognized the stated benefits of the proposal aimed at enhancing staff satisfaction and cooperation, as well as reducing space and real estate needs, but agreed with the Advisory Committee on the difficulty in measuring overall productivity across the different functions performed in the Organization with the implementation of flexible workplace arrangements. As such arrangements would significantly impact the Organization’s working environment, further clarification was needed on the human resources management approach to implement them, including human resources policies and different departments’ specific requirements, to determine whether such proposals could be successfully implemented in the United Nations.
KODJOVI DOSSEH (Togo), speaking for the African Group and aligning himself with the Group of 77 and China, welcomed the development of a long-term capital maintenance programme for the next 20 years. He emphasized the importance of maintaining buildings at duty stations, particularly at the Economic Commission for Africa (ECA) in Addis Ababa, as well as its subregional offices. There had been significant deterioration in some of those facilities, which would require substantial costs to refurbish and threatened the life and health of delegates, visitors and staff. He hoped the ongoing review would provide an effective mechanism to maintain buildings in all duty stations. In undertaking such works, it was important to adhere to industry norms and building codes relating to health, safety and compliance with requirements for people with special needs, and urged the Secretary-General to ensure that effective measures were in place to implement proposals in the final Strategic Capital Review report and that lessons learned and best practices in implementing similar capital projects would be applied.
SERGEY KHALIZOV (Russian Federation) commenting on the strategic capital review, noted the basic principles proposed to guide implementation of the capital maintenance programme and concurred with the Advisory Committee’s finding that incremental recapitalization based on a life-cycle replacement methodology needed refinement. Among other measures, a periodic review of capital assets and timely planning for works to be undertaken would be needed. Further, the financial side needed a thorough re-working, with an analysis of costs for the transition to planned long-term capital strategies. Thus it was premature to approve any financial request. Turning to the flexible workplace, he said that one of the cornerstone elements in its consideration should be to achieve savings. Thus the Committee should carefully consider the proposals made. He gave particular attention to the savings and costs relating to reductions in outside rental space, the personal technology package, and the reuse of furnishings newly installed as part of the Capital Master Plan.