Inner City Press -- Investigative Reporting From the Inner City to Wall Street to the United Nations

Amid Complaints of $265M UN Repair Overrun, $147M More, No DC5?

By Matthew Russell Lee, Exclusive

UNITED NATIONS, March 12, update March 13 -- With the UN Security Council full of foreign minister on Monday, some expressed surprise at the stage of the Capital Master Plan reconstruction of the UN, and the cost overruns under Secretary General Ban Ki-moon. Things are worse than they know.

  Last week, CMP Assistant Secretary General Michael Adlerstein belatedly told member states that cost overruns now are $265 million, compared to a previous disclose of less of $80 million, supposedly whittled down through something called value engineering.

  But even this $265 million overrun understates the problem, as it does not include so-called "associated costs." According to the document A/66/527/Add.1, "the resources required for associated costs for the period from 2008 to 2013 are estimated to total $146,806,000."

So the actual CMP cost overrun under Ban and Adlerstein is $412 million. Recently there was a push to override local opposition and make plans to build another new UN building, tentatively called DC-5, on the playground to the south of 42nd Street, where currently children play sports, and adults soccer in the afternoon.

  Now, sources tell Inner City Press, the idea of the UN building yet another building seems "absurd," with the over $400 million overrun on a mere reconstruction. Watch this site.

(c) UN Photo
UN under repair, $400M & DC-5 not shown

Footnote: Inner City Press alluded to this coming disclosure last week, even as a major wire service (mis) reported that the CMP cost overrun was "only" four percent.

  Meanwhile the UN has refused to answer Inner City Press' repeated questions about who is getting paid by the UN to accompany Kofi Annan to Syria -- TV images show for example former UN official Alan Doss, who left amid a nepotism scandal in which he asked UNDP to bend or break its rules to give a job to his daughter -- and about the propriety of the return as a UN adviser of another former official, Maurice Strong, who left amid the Oil for Food scandal, and another bout of nepotism.

  Mismanagement and corruption may be different things -- but lack of transparency in the use of public money fuels both of them. Watch this site.

Update: at the noon briefing on March 13, the day after Inner City Press published the above, Inner City Press asked Ban Ki-moon's spokesman a series of questions. He has now emailed what follows, first to Inner City Press then all correspondents:

Subject: Your question on the CMP
To: Matthew.Lee[at] innercitypress.com
From: UN Spokesperson - Do Not Reply [at] un.org
Date: Tue, Mar 13, 2012 at 1:30 PM

The Fifth Committee last week has begun to consider the Secretary-General's 9th annual progress report on the implementation of the Capital Master Plan (CMP) that had been published in October 2011.

On 8 March 2012 ASG Adlerstein informed the Fifth 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 or 14.2 % over budget.

The CMP in its progress reports has been reporting annually on projected budget overruns since its budget of $1.876 billion was approved by the General Assembly in December 2006.

In September 2007 in its 5th annual progress report the CMP reported a projected budget overrun of $219 million, approximately 12 %. This was due to inflation and delays in the execution of the project.

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 basements, where lack of as-built plans is making infrastructure work very intensive. Also the amount of asbestos-containing material that had to be abated exceeded the initial assumptions.

The associated costs ($146.8 million) are 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 GA directed the CMP to cover and absorb those costs.

As laid out in its 9th Annual Progress Report in October 2011, the CMP is requesting commitment authority from the Fifth Committee to utilize interest earned on the Capital Master Plan fund ($107 million) and the CMP’s Working Capital Fund ($45 million) to ensure the project can continue to meet its schedule.

To complete the project, an additional appropriation will need to be discussed in the fall session of the General Assembly.