U.N.'s Mega Renovation Project Runs Short of Funds
The United Nations, which is in the process of refurbishing its 62-year-old headquarters building at a cost of over 1.8 billion dollars financed by member states, is now seeking additional funds because of huge cost overruns.
But virtually all of the 193 member states are refusing to provide any additional money - running into millions of dollars - needed to complete the ongoing five-year-old project scheduled to finish in late 2013.
'Let us be clear,' Thomas Mayr-Harting, head of the 27-member European Union delegation, told the U.N.'s budgetary committee recently, 'the member states of the EU are not in a position to accept new assessments on member states.'
The funds for the massive renovation project, which emptied all 39 floors of the secretariat, forcing thousands of staffers into rented neighbouring office buildings, have come from member states who are assessed on the basis of their 'capacity to pay'.
The United States pays the largest share - 22 percent - of the renovation budget, followed by Japan, Germany, UK, France, Italy, Canada, Spain and China (with all nine countries contributing about 75 percent of the budget).
The world's developing nations pay the minimum assessed contributions of about 0.001 percent of the budget.
The 132-member Group of 77, the largest single coalition of developing countries, including China, is equally vociferous about its reluctance to advance more money for the project, officially called the Capital Master Plan (CMP).
In a draft resolution to be adopted by the General Assembly next week, the G77 says it is 'extremely concerned about the sudden and unexplained increase in the cost overrun of the project to 433 million dollars' of the total approved budget.
The resolution requests Secretary-General Ban Ki-moon 'to report on the underlying causes for such an increase and urges the secretary general to robustly contain such overruns and report back to the General Assembly on the results.'
Speaking on behalf of the Community of Latin American and Caribbean States (CELAC), Chile's Permanent Representative to the United Nations Ambassador Octavio Errazuriz has expressed 'deep concern over the anticipated delays in meeting the deadlines set for the Capital Master Plan'.
Such delays, he said, could be the basis for requesting more resources for the 'mega project', which had already required a major financial contribution from the 193 member states.
U.S. Ambassador Joseph Torsella asked the budgetary committee to continue to make clear to the secretariat 'the importance of keeping the headquarters' renovation in line with its set schedule and budget'.
But he said he was 'carefully considering' the secretary-general's proposal on extra financing sources for the project.
In a statement released Mar. 13, the secretary-general's office said that CMP's executive director, Assistant Secretary-General Michael Alderstein, had duly informed the budgetary committee that the projection of the budget shortfall given in the progress report had to be revised.
It is now estimated to be 265 million dollars, or 14.2 percent over the approved budget.
The CMP in its progress reports has also been reporting annually on projected budget overruns since its budget of 1.8 billion dollars was approved by the General Assembly in December 2006.
In September 2007, in its fifth annual progress report, the CMP reported a projected budget overrun of 219 million dollars, approximately 12 percent.
'This was due to inflation and delays in the execution of the project,' the statement added.
'As the project now approaches its final stages, the recently revised projection is due to many factors, including numerous unforeseen conditions and complexities in the (building's) basements, where lack of as-built plans is making infrastructure work very intensive.'
Also, the statement continued, the amount of asbestos-containing material that had to be abated exceeded the initial assumptions.
The associated costs - 146.8 million dollars - have been described as temporary costs of certain other departments incurred in support of the CMP, including the costs for new furniture.
'Those costs were not part of the CMP budget, although the General Assembly directed the CMP to cover and absorb those costs,' the statement said.
Meanwhile, the CMP is also requesting commitment authority from the budgetary committee to utilise interest earned on the Capital Master Plan fund (107 million dollars) and the CMPs Working Capital Fund (45 million dollars) to ensure the project can continue to meet its schedule.
If the General Assembly does not approve the increased costs, the CMP is planning to abandon the renovation of the adjacent library building.
But developing countries, led by the Group of 77, are strongly opposed to this proposal.
© Inter Press Service (2012) — All Rights ReservedOriginal source: Inter Press Service
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