Summary: EU Presidency Statement - Capital Master Plan (12 December 2005: New York)
EU Presidency Statement on Item 124: Capital Master Plan by the Permanent Mission of the United Kingdom to the United Nations on behalf of the European Union, Fifth Committee, United Nations, New York
Thank you Mr Chairman. I have the honour to speak on behalf of the European Union.
The Acceding Countries Bulgaria and Romania, the Candidate Countries Turkey and Croatia*, the Countries of the Stabilisation and Association Process and potential candidates Albania, Bosnia and Herzegovina, the former Yugoslav Republic of Macedonia, Serbia and Montenegro, EFTA countries Iceland, Liechtenstein and Norway, members of the European Economic Area, as well as Ukraine and the Republic of Moldova align themselves with this declaration.
We are grateful to Assistant Secretary-General Reuter for his presentation of the latest report on the Capital Master Plan, as requested in Resolution 59/295. We also thank the Board of Auditors, OIOS and the ACABQ for their related reports.
We have taken careful note of the proposals advanced by the Secretariat for a revision to the scope of the project and the consequent revision of the cost estimates. We are dealing with a major capital investment project and we must give this issue the attention it deserves.
First of all, let me reiterate the European Union's firm support for the CMP. The state of this building has been neglected for far too long. A proper refurbishment is long overdue. This is obvious from recent incidents, like the power outage which shut the UN down for a full working day, or the leak in the General Assembly Hall roof which forced an evacuation from the conference hall. If efforts had been made over the past 50 years to bring the building in line with NY City building safety
regulations, we might not need such a large-scale refurbishment now. But that was not the case. We therefore have no choice but to take corrective action now.
The EU is not prepared to do nothing for another 50 years and to wait until the entire building collapses, rather than just the ceiling outside room 5. This would be irresponsible and more costly in the long run. We continue to believe that we should take an early decision to enable this project to move forward quickly.
We have all heard the comments from certain quarters that this project is a "boondoggle". For those who do not know what a boondoggle is (and we had to look it up ourselves), it is a term meaning 'a waste of public funds'. Those comments are clearly made by individuals who have not set foot inside this building. We challenge them to undertake the so-called dirty tour and to see for themselves the antiquated heating system, the inadequate electrical wiring, the asbestos in the walls, not to
mention the dangerous lack of fire detection systems. We doubt they would talk so readily then of boondoggles or luxury refitting.
The European Union regrets the failure of the swing space project known as DC5 which has changed the complexion of the project significantly. We are grateful that the Secretariat have therefore revisited the entire scope of the project and outlined several new options for our consideration. We will have a number of questions on the options described, in particular we will need further clarification from the Secretariat on their recommended Strategy IV. We will also be interested in the
Secretariat response to questions raised by ACABQ in their report and would ask that this be provided urgently.
As for cost estimates and method of financing, we note that the revised costs have risen to $1.6bn for the Secretariat's recommended option. We also note that the Secretariat has made a firm recommendation for payment by direct assessment over a period of 5 years, backed by a letter of credit to obviate the need for the Secretariat to have full cash availability up-front. The EU will explore further in informal consultations the rationale for the rise in costs and will wish in particular to
explore the potential for some saving to bring the cost down.
On financing, the European Union agrees in principle that payment by direct assessment is the simplest method of financing this project and that it would make sense to have a mechanism in place to cover contractual obligations. Nevertheless there are a number of other factors which would need to be clear. First of all, are we right in our assumption that all MS would have to agree to a system of payment by direct assessment and that all such payments would need to be made more or less on time
if such a system were to be workable? Second, what would be the fee for a letter of credit without any other means of guarantee? And what would be the trigger for drawing on the letter of credit? How would the Secretariat ensure that any payment of interest for drawing on the letter of credit would not be applied to MS who had made their payments in full?
We note that the Secretariat has drawn attention to the disappointing responses to invitations to participate in the proposed Advisory Board. We would encourage financial experts to come forward to advise the Secretary General on the range of financial options and vehicles that the Secretariat could access, to provide Member States with the best possible finance options for Capital Master Plan.
We have spent many hours over the past year discussing the contribution of the host country. As I have said, we regret the unwillingness of the State of New York to take the necessary decisions that would have allowed DC5 to go ahead, though the large price hike was an additional and unwelcome hurdle. The EU maintains that host countries should be prepared to take on additional financial responsibilities in maintaining their UN premises. Those of us in the EU who are hosts to UN bodies have
willingly done so ourselves. The status of the loan offer from the host country remains unclear. We were reassured during the last session that the offer would be renewed but we have seen no evidence that this is in the pipeline, nor whether there is any willingness to increase the amount from $1.2bn to a higher sum. We understand that the existence of a loan would bring down the cost of a letter of credit. The absence of any news on this front therefore makes it difficult for us to have a
clear picture of the overall cost of the project.
In conclusion, the EU wants to make it clear that we are anxious to proceed with the CMP and ready to discuss constructively the Secretariat's recommended options subject to the same commitment from all other MS. We look forward to hearing the views of others.
* Croatia continues to be part of the Stabilisation and Association Process.
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