UNGA/C-5: FUNDING FOR AMISOM, CAPITAL MASTER PLAN,

UNCLAS USUN NEW YORK 001064

SIPDIS

E.O. 12958: N/A
TAGS: AORC KUNR PREL UNGA
SUBJECT: UNGA/C-5: FUNDING FOR AMISOM, CAPITAL MASTER PLAN,
AFTER-SERVICE HEALTH INSURANCE, AND PROCUREMENT


1. (U) SUMMARY: The Fifth Committee recently held a series of
formal meetings on procurement, After-Service Health
Insurance (ASHI),support for the African Union Mission in
Somalia (AMISOM),and the Capital Master Plan (CMP). The
U.S. delivered a statement noting its support for AMISOM and
condemning the recent attacks in Somalia against its
personnel. African delegations widely called for the UN to
continue its support of the Mission, urging that assistance
is essential to maintaining security and advancing the peace
process in Somalia. Several delegations suggested that plans
move ahead for an eventual UNPKO in Somalia. Pertaining to
the After Service Health Initiative (ASHI),the Secretariat
called for a new two-tier funding approach involving a surge
in initial funds and a long term investment plan. On
procurement, the Secretariat noted the many steps that it had
taken to advance reforms, but the OIOS insisted that the
measures taken are not "real" and urged management to take
further action. Delegations widely called for sustainable
procurement and some stressed the need to include more
vendors from the developing world. Japan noted its concern
over the steeply rising costs of ASHI and suggested it might
be necessary to limit the number of years past retirement
that the benefit can be received. The Secretariat presented
an optimistic report of the budget and time-line for the
Capital Master Plan, but delegations expresses mixed views,
while the Board of Auditors questioned the rationale behind
purported decreases in the project budget. END SUMMARY

PROCUREMENT
--------------


2. (U) SECRETARIAT OPTIMISTIC ON REFORM PROCESS: Warren Sach,
Assistant Secretary-General for Central Support Services,
introduced the comprehensive report of the Secretary-General
on UN procurement activities. He outlined efforts to
streamline the vendor registration system and to improve
procurement opportunities for vendors from developing
countries. He also explained the rationale behind the
proposed establishment of a Regional Procurement Office in
Entebbe, Uganda, on a pilot basis. Finally, he explained the
concept of sustainable procurement that incorporates
economic, social, and environmental considerations.


3. (U) OIOS LESS OPTIMISTIC; CALLS FOR &REAL REFORM8:
Inga-Britt Ahlenius, Under Secretary-General for Internal
Oversight Services, introduced the report of the OIOS
outlining the results of its audit of procurement management
in the Secretariat. This report pointed out, inter alia, that
many of the activities that the Secretariat was trumpeting as
successful reforms should, in fact, be considered routine
managerial requirements. As such, attention was being
diverted from the critical reforms that have yet to be fully
implemented, including the long-delayed bid protest system
and ethics guidelines. OIOS further noted that the
Secretariat only accepted 12 of 25 recommendations provided
by OIOS.


4. (U) G-77 AND OTHERS CITE LACK OF INFORMATION, SPAR ON
SUSTAINABLE PROCUREMENT: Delegations broadly raised concerns
about the lack of sufficient information contained within the
comprehensive report on procurement. On specific proposals,
however, the Committee was divided, particularly in the case
of sustainable procurement. Although blocs such as CANZ and
the EU stated their support for sustainable procurement,
groups such as the G-77 and the Rio Group expressed concern
over the concept and warned the Secretariat not to take steps
towards implementing sustainable procurement absent specific
mandates from the General Assembly.

AFTER-SERVICE HEALTH INSURANCE (ASHI)
--------------


5. (U) SECRETARIAT URGES TWO-TIERED FUNDING APPROACH: Jun
Yamazaki, the UN Controller, introduced the report of the
Secretary-General on the ASHI. He warned that the current
"pay-as-you-go8 strategy of funding ASHI was not sustainable
in the long term, because growth in ASHI liabilities --
caused by the growing number of eligible retirees and the
increasing cost of healthcare -- were outpacing the growth in
the budget. The UN share of ASHI liabilities was estimated at
USD 2.4 billion in 2007, up from USD 2.1 billion in 2005. As
a result, the Secretary-General recommends a two-tiered
funding approach that would utilize (1) a one-time infusion
of USD 425 million into an ASHI reserve investment fund and
(2) maintenance of current funding practices supplemented by
charges against salary costs. It is proposed that the funds
for the one-time infusion be diverted from unencumbered
balances from the 2008/09 peacekeeping budget as well as from
the medical and dental reserves.


6. (U) POSSIBILITY OF ASHI TIME LIMITS RAISED: Sudan,
speaking on behalf of the G-77 and China, indicated their
concerns about the proposed funding schedule, as well as


their opposition to transferring the unencumbered balances
from the 2008/09 peacekeeping budget, calling it &an
inappropriate financial management practice8. Japan also
raised concerns, suggesting that the &General Assembly may
wish to review the scope and coverage of the existing
after-service health insurance plans" and that it may be
necessary to "consider imposing a limitation on the number of
years for which retired staff members and their dependants
are covered by ASHI after their retirement" as is the
practice in the Japanese civil service.


LOGISTICAL SUPPORT PACKAGE FOR THE AFRICAN
--------------
UNION MISSION IN SOMALIA (AMISOM)
--------------


7. (U) U.S. STATEMENT CONDEMNS ATTACKS AND EXPRESSES SUPPORT
FOR AMISOM: David A. Traystman delivered the U.S. statement,
noting that "the United States strongly supports the
important role played by the African Union Mission in Somalia
(AMISOM) and the decision to strengthen support for AMISOM
provided under Security Council resolution 1863." The
statement expressed condemnation for the deadly suicide
attacks of September 17 against AMISOM. The U.S. noted the
extensive logistical and equipment support that it provides
to AMISOM forces, along with food and non-food emergency
assistance, and added that "we plan to continue this level of
support." The U.S. observed that the situation in Somalia
"remains tenuous" and called on the Fifth Committee to
authorize the "logistical and other support to AMISOM
requested by the Secretary-General." It called on the UN to
use limited resources in an "efficient, effective and
transparent manner." Full text of the statement can be found
online at:
http://usun.state.gov/briefing/statements/200 9/131863.htm


8. (U) UN CONTROLLER EXPLAINS COST RISE, AFRICAN DELEGATIONS
RALLY IN SUPPORT OF AMISOM: Jun Yamazaki, the UN Controller,
noted that the budget for AMISOM is approximately $90 million
less than was originally forecasted for the June 2009/June
2010 period, owing largely to changing circumstances on the
ground. Angola spoke on behalf of the African group and
praised the role of AMISOM in creating a more secure
environment in Mogadishu, which can hopefully allow the peace
process to advance. Angola also endorsed the planning of an
eventual UN peacekeeping force in Somalia. Ethiopia called
for the SYG to continue providing logistical support to
AMISOM, calling this assistance critical to the maintenance
of security in Somalia. South Africa welcomed the proposed
budget, but noted concern over the ACABQ's recommendation to
reduce funding by $9.8 million, and hoped that such a cut
would not adversely affect AMISOM's work. South Africa also
echoed the call for establishing a future UN peacekeeping
force in Somalia. Uganda also questioned whether the budget
would be adequate and promised to address the issue in
informals.


REVIEW OF CAPITAL MASTER PLAN (CMP)
--------------


9. (U) SECRETARIAT SAYS CMP IS ON ITS WAY TO BEING WITHIN
BUDGET (MOSTLY): Assistant Secretary-General Michael
Adlerstein provided a status of the CMP and claimed that "the
procurement of the project is moving well" and also
maintained that "the costs of the project are now less than
five percent over the approved budget, and those costs are
still moving in the right direction - downward." Adlerstein
explained that while last year, the project was $97.5 million
over the approved budget, this year it is down to $91.4
million over-budget, and contended that the "gap continues to
narrow." While "confident that we will conclude the project
on budget," Adlerstein expressed concern "about our ability
to absorb the associated costs," and mentioned he is not
optimistic that the costs of the Secondary Data Center can be
contained within the budget. In terms of time frame,
Adlerstein noted that the project remains "on schedule8 to
be completed by 2013."


10. (U) BOARD OF AUDITORS SKEPTICAL AND CRITICAL OF CMP
FUNDING STATUS: Imran Vanker presented the Board of
Auditor's report on the Capital Master Plan and noted
"concerns about the total cost of the project, the disclosure
and accuracy of the project calculations, uncertainties in
the schedule of the project, and the weakness in procurement
and contract management." While Vanker recognized that the
projected costs now are slightly lower than last year's
estimate, "it is still higher than the $1.877 Billion
approved by the General Assembly, indicating that a cost
over-run is still possible." Vanker explained that the cause
of reductions in the cost estimate is a function of "a large
reduction in the budget for contingencies (including price


escalation) from $478 million to $227 million since the
Board's last report." The BOA recommends that a more
conservative approach be applied, particularly since the
"project does not have to absorb what is described as 'the
Associated Costs."


11. (U) DELEGATIONS EXPRESS MIXED REACTION ON BUDGET AND
TIME-LINE: Bangladesh noted appreciation for the
cost-savings, but emphasized that "the value engineering must
not compromise the quality of work, should not lead to
structural change, integrity of the architectural design, and
the historic landmarks of the complex." Australia, speaking
on behalf of the CANZ group, said they were "naturally
concerned that the CMP is coming in over-budget" and welcome
"ongoing efforts to bring it back into line, including
through design and value engineering exercises." Singapore
called for the Secretariat to "redouble its efforts to ensure
better planning and coordination for the remainder of the CMP
project" and warned against adding "costs and delays to the
CMP, which is highly undesirable as it increases the burden
on Member States." Sweden, speaking on behalf of the
European Union, noted that it was "concerned that certain
recommendations made by the Board of Auditors, particularly
relating to the dual issues of cost estimates and review of
contractual amendments, were not accepted by the
Secretary-General." Sweden also expressed regret that
associated costs "were not built into the original budget
proposals for the Capital Master Plan8 and the EU remains
&unconvinced that these costs cannot be absorbed from within
the approved budget." Sudan, speaking on behalf of the G-77
and China regretted &the slippage in the current schedule
of the Capital Master Plan." Further, while the G-77,
appreciated &the gains of the value engineering in
maximizing the savings", it warned &against steps that "lead
to any structural change and the integrity of the
architectural design" and said "the concept needs to be
further explained."
RICE