Budget Committee Takes up Construction Projects at Economic Commission for Africa, United Nations Office in Nairobi

7 December 2009

Budget Committee Takes up Construction Projects at Economic Commission for Africa, United Nations Office in Nairobi

7 December 2009
General Assembly
Department of Public Information • News and Media Division • New York

Sixty-fourth General Assembly

Fifth Committee

18th Meeting (AM)

Budget Committee Takes up Construction Projects at Economic Commission

for Africa, United Nations Office in Nairobi


Construction of additional office facilities at the Economic Commission for Africa in Addis Ababa (ECA) and the United Nations Office in Nairobi -- both of which faced General Assembly scrutiny in December last year for fear of project delays -- were now on track following new arrangements to address the causes of delay, the Fifth Committee (Administrative and Budgetary) was told this morning.

According to Sharon Van Buerle, Director of the United Nations Programme Planning and Budget Division, who introduced the Secretary-General’s report on the two projects, the procurement process in relation to one, that undertaken by ECA, was halted by the Procurement Task Force in March, citing “procurement irregularities”.  In response, the Commission -- working with a team from Headquarters -- produced a new request, along with new value engineered construction documents ensuring a maximum price of $7.5 million for construction, with an $800,000 contingency.

She said 12 bidders attended a bidding conference on 24 September, and four construction bids were received in October.  Those bids were now undergoing technical evaluation, with the recommended selection to be announced some time this month for award in February 2010.

A management review undertaken by the United Nations Department of Management in February had resulted in the Addis Ababa project management team being strengthened, she added, which now reported to the Division of Management at ECA.  The Commission was in the final stages of recruiting the lead position, at the P-5 level, to be supported by two clerks.  It would also establish a senior level working group to oversee the project and to guide decisions during construction, to be advised by an independent quantity surveyor consultant.

Part of the delay in Addis Ababa had been caused by questions relating to taxes on imported materials, as explained by the representative of Ethiopia.  But, as a result of negotiations between ECA and the Ethiopian Ministry of Finance and Economic Development, the purchase of goods and services would be tax-free under a special voucher system.  He also said an addendum to an agreement between ECA and Ethiopia would give the Commission the right to duty and tax-free import of goods and other privileges, to help carry out the construction project.

Another source of delay lay in the relocation of service utilities, the representative of Ethiopia explained further.  Local authorities had done their best to cooperate with ECA to build alternate public access roads and to relocate other service utilities, with the exception of the installation of a telephone line.  Discussions had taken place in early September between the Foreign Minister and the Executive Secretary of the Commission to resolve such outstanding issues.

Welcoming the creation of a senior-level project management position, he requested that similar urgency be applied to the recruitment of additional construction experts to strengthen the project team.

The second of the two projects, the construction of additional office facilities in Nairobi, had recently begun, as also touched on by Ms. Van Buerle.  Work had started in May, after the Office completed its modernization project in January -- all within budget -- and the new construction was expected to be completed in May 2011.  A senior-level working group was established at the Office to advise and report on the project to the Director-General, and had been meeting regularly.  The local project management team was strengthened with a project manager, clerks of works, and an independent technical adviser who reports to the senior level working group.

Sudan’s representative, speaking on behalf of the “Group of 77” developing countries and China, said the management reviews of both projects recognized that lack of internal controls and proper accounting structures had exposed the Organization to significant potential risks.  The Group would seek clarification during informal consultations on the adequacy of measures proposed and those already implemented.  Noting that, with proper management, the project could be completed within the projected time frame, he called on the Secretary-General to ensure close monitoring of its implementation.

He added that efforts to overcome delays in building the ECA facilities should ensure that proper mechanisms and management structures be put in place to prevent a repeat of the unfortunate circumstances that led to the original construction’s cancellation.  Saying that the risks faced by the Organization were unacceptable, he expressed hope that the lessons learned would lead to better management and administration structures.

Following Ms. Van Buerle’s presentation, Susan McLurg, Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), had welcomed progress in Nairobi while noting that the project in Addis Ababa was also on schedule.  In implementing the two projects, she stressed the wisdom of drawing from lessons learned in carrying out the United Nations Capital Master Plan.

According to the Secretary-General’s report, the total cost estimate for the project undertaken by ECA in Addis Ababa stood at about $14.33 million, as requested by the General Assembly in its resolution 63/263, despite significant currency fluctuations.

On the project at the United Nations Office at Nairobi, the report states that the total approved cost estimate of $25.25 million would cover the full cost of the signed contracts; currently, there was a remaining contingency fund of over $1.6 million that was not earmarked.

The Committee will meet again at 10 a.m., on Thursday, 10 December, to take up the financing of the International Criminal Tribunal for Rwanda and International Criminal Tribunal for the Former Yugoslavia.

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For information media • not an official record
For information media. Not an official record.