VZCZCXYZ0005
RR RUEHWEB

DE RUCNDT #1064/01 3271908
ZNR UUUUU ZZH
R 231908Z NOV 09
FM USMISSION USUN NEW YORK
TO SECSTATE WASHDC 7684

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