VZCZCXYZ0000
RR RUEHWEB

DE RUEHNY #0434/01 1880756
ZNR UUUUU ZZH
R 070756Z JUL 09
FM AMEMBASSY OSLO
TO SECSTATE WASHDC 7619

UNCLAS OSLO 000434 
 
SENSITIVE 
FOR EUR-IO/EX, M, AND OBO 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ABLD PREL AMGT ASEC KLIG NO
SUBJECT:  OSLO NEC - THE HIGH COSTS OF FREEZING THE PROJECT 
 
REF:  Oslo 375 and previous 
 
¶1.  (SBU) Summary and Action Request:  After winning a nail-biting 
vote in the City Council, an appeal to the governor, two lower court 
cases, and a final Supreme Court appeal, then successfully 
concluding four years of negotiations over the purchase price for 
the land, we at last have a clear path in Norway to proceed with the 
Oslo NEC.  While mindful of competing priorities, we urge the 
Department to move forward with the modest funding needed for our 
NEC redesign.  The redesign would lead to issuance of our first 
building permit, which in turn would prevent the volatile Oslo City 
Council from rezoning or reducing the size of our buildable 
property.  This would position Oslo as a backup NEC project without 
committing us to build at this time.  The alternative, withdrawing 
our application, would damage U.S. credibility and our bilateral 
relationship and potentially leave us with no viable NEC site after 
huge investments of money, time, and political capital.  Personal 
interventions by the Foreign Minister and Minister of Defense in 
this process at the request of the Ambassador make this a key 
bilateral issue.  Public revelation that U.S. urgency for a new NEC 
site over the last seven years is gone would handcuff our new 
Ambassador immediately upon arrival.  End Summary. 
 
 
 
---------- 
Background 
---------- 
 
¶2.  (U) The Department and Post have spent seven years seeking to 
address the fact that our lack of adequate setback makes it 
impossible to retrofit our aging chancery to meet blast standards. 
Following a two-year search for a new property, in 2004 we 
identified a ten-acre site in Huseby owned by the Ministry of 
Defense. 
 
¶3.  (SBU) The proposal to rezone the Huseby property to allow the 
NEC barely prevailed in the City Council in December 2005 after the 
Embassy convinced the GON to intervene politically.  Tensions were 
so high that a City Councillor who switched sides to support us was 
later expelled from his party.  Our opponents responded by appealing 
to the governor, suing in court, appealing, and appealing again to 
the Supreme Court.  In 2008 the City Council again threatened to 
block the NEC, despite our court victories.  Only the personal 
intervention of the Foreign Minister, at the Ambassador's request, 
stopped the Oslo Labor Party from blocking the NEC project.  In May 
of 2009, the Supreme Court dismissed the plaintiffs' lawsuit, 
finally clearing the way for us to proceed, as long as the political 
balance in the City Council (guaranteed by the Foreign Minister) 
holds. 
 
¶4.  (SBU) Amid the backdrop of courtroom theatrics, negotiations 
quietly dragged on for four years over the terms of sale of the NEC 
site.  The personal involvement of the Minister of Defense and 
numerous high-level interventions in Washington eventually led to 
concessions on both sides, culminating in the final purchase 
agreement that was signed in December 2008. 
 
---------------------- 
Where Things Stand Now 
---------------------- 
 
¶5.  (SBU) Currently we have ownership of a ten-acre site.  Our first 
building permit, an expensive, laborious, and time-consuming process 
that we began in 2008, remains pending with the Oslo Planning and 
Building Authority.  An estimated USD 300,000 in funds is needed to 
modify the design of the NEC to meet the City's requirements.  There 
is one catch:  once the first building permit is approved, it will 
remain valid for only three years.  On the other hand, until that 
permit is issued, the City Council can at any time reverse the 
zoning decision.  With national elections set for September, it is 
uncertain how long we can rely on the intervention of national Labor 
Party leaders, such as the Foreign Minister, to protect our 
interests in the Oslo City Council.  Any sign that the USG is 
prepared to wait many years to build after we expressed urgency for 
years would undercut our allies and reverse our political 
victories. 
 
¶6.  (SBU) The Oslo City Council's anti-NEC majority has been held in 
check only by the active intervention of our friends in the GON. 
The Council previously voted to suspend processing of our building 
permit until all pending litigation had been settled.  In June of 
2009, the City Council beat back an attempt by our opponents to 
reduce the size of our approved NEC site to five acres, but only 
with GON pressure on Labor Party councillors, several of whom told 
the media they were against the ten-acre NEC but voted for it in 
this case only because of government pressure.  The City Council 
thus remains a wild card; it could revote to overturn its 2005 
rezoning decision at any time if we withdraw our application.  Once 
our first building permit is approved, however, the City Council 
would no longer be able to intervene. 
¶7.  (SBU) In December 2008, DS reprioritized the NEC building 
schedule, moving Oslo from FY 2011 to FY 2020.  Fortunately, that 
information has not become publicly known in Oslo.  While our 
chancery's lack of setback makes it literally "unsecurable," we 
understand the arguments for first building NEC's where terrorist 
threats are higher.  Since the security need for an NEC in Oslo is 
clear, however, we urge the Department to preserve flexibility and 
avoid damage to U.S. credibility. 
 
---------------------- 
Options for the Future 
---------------------- 
 
¶8.  (SBU) After consulting our local attorneys about the 
administrative and political issues involved, post sees two 
approaches: 
 
¶A.  We could withdraw our building permit application, noting that 
redesign requests have funding implications we must consider.  This 
would lead to negative publicity and bewilderment on the part of the 
GON, the City Council, and the media as to why the proposed move of 
the embassy to Huseby was so urgent and our security concerns so 
great if, in fact, we can wait.  Withdrawing our permit in August or 
September, or perhaps not until asked by the Oslo Planning and 
Building Authority when our design would appear might buy us some 
months without the revelation that we are now saying that our 
previous cries of urgency, including by the Ambassador to the 
Foreign Minister, were exaggerated.  When it becomes evident that 
our urgency has vanished, we could blame Norway, arguing that years 
of uncertainty had damaged the project.  The result, however, would 
be devastating to our credibility and possibly lead the City Council 
to reverse the rezoning.  All of our allies up to now (the Foreign 
Minister, the Minister of Defense, favorable city councillors, 
citizen leaders) would be embarrassed and resent the political pains 
they caused and suffered, only to see the USG back out, just as 
victory appeared.  The search for a new site or attempts to 
resurrect this one would be excruciating, as virtually every USG 
claim would be suspect.  This would be among the first issues facing 
a brand new U.S. Ambassador to Norway. 
 
¶B.  We could fund the NEC modifications that the City has requested 
and obtain approval of the first building permit.  The redesign 
could take a few months or longer, with the permit granted in 2010. 
At that point the City Council would be prevented from intervening 
politically by the existence of a valid building permit.  If the 
permit were allowed to expire in 2013, we would be no worse off than 
we are today.  On the other hand, if another NEC project were to 
stall and pressures to use building funds expeditiously were to grow 
(as has happened in the past), Oslo would be prepared to fill the 
gap as a backup option for NEC construction over the next three-year 
period. 
 
¶9.  (SBU) As the Department considers its next steps, post wishes to 
express its gratitude to OBO Acting Director Adam Namm, EUR-IO 
Executive Director Tom Tiernan, and Undersecretary for Management 
Pat Kennedy for their resolve in the face of the numerous obstacles 
the Oslo NEC project has overcome.  We urge approval of Option B, 
which offers the most advantages and flexibility to the U.S. 
Government. 
 
JOHNSON