'Incompetent' refurbishment costs UN £1bn

By David Cox in New York, Sunday Telegraph http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2006/12/10/wun10.xml

The United Nations is facing fresh accusations of bureaucratic incompetence after the disclosure that renovation costs for its vast New York headquarters have rocketed to nearly £1 billion.

The building is seen by some as a symbol of the UN's incompetence
The projected bill for the scheme, which includes updating the 1950s building and a makeover for the Secretary General's New York residence, has risen by nearly two-thirds from an original 2002 estimate of $1,170 million (£600 million) to $1,900 million.

Kofi Annan, the departing Secretary General, presented a confidential progress report at a closed-doors meeting of the UN General Assembly last week, of which The Sunday Telegraph has obtained details.

The document's revelations will be seized on by critics of the world body, who have often viewed its sprawling 38-floor offices as a symbol of UN incompetence and inefficiency in the wider world.

John Bolton, the outgoing American ambassador to the UN and one of its fiercest critics, famously once remarked that if the building lost its top 10 storeys, "it wouldn't make a bit of difference".

The cost of the overhaul will be shared among the UN's 192 member countries, whose core members paid for its original construction between 1949 and 1950. At the time, it was designed to provide office space for delegations from just 70 nations.

In the five decades since, the buildings have not been significantly improved or maintained, and are extremely energy-inefficient, costing more than $30 million a year in heating and lighting alone.

New York city firefighting authorities say that the buildings do not meet fire, safety and building code standards, and there are also concerns about asbestos used in the original construction.
In a separate report to Congress in Washington in November, the US Government Accountability Office heavily criticised the UN for "weak internal controls" that posed a "significant risk of waste, abuse and fraud".

In particular, it said that, despite strong recommendations, the UN had failed to provide procurement guidelines to staff charged with hiring contractors, and that the head of the committee set up to prevent procurement abuse had stated that he did not have the finance needed to do his job.

The report said that the UN had no independent process to review internal compliance with its stated procurement procedures, and warned that "the cost is still preliminary and will likely change".

Its author, Thomas Melito, added: "The UN procurement service is a branch of the UN that handles procurement for everything from peacekeeping missions to building projects. We recommended that they mitigate the known weaknesses in the procurement service, and they agreed with that. But it will take several years for the UN to address these weaknesses."
The baseline figure for the work is now revealed to have risen by $100 million from inflation alone.

Newly added plans for blast protection and other security upgrades add a further $166 million to the bill, while the cost of building a temporary 100,000 sq ft conference hall on the UN's north lawn has risen from $11.4 million to $66 million.

The projected temporary offices for staff and diplomats during the eight-year renovation – which is not due to start until 2008, despite being first mooted in 2001 – has jumped from $170 million to $220 million.

The spiralling figures involved have astonished New York property moguls such as Donald Trump, who claimed that the costs were being pushed up by "incompetents".
"It's the most ridiculous construction development I have ever witnessed," he said. "It's being run by a bunch of incompetents, and it's a disgrace to this country. It should cost $700 million, but I bet it will now end up costing $3.5 billion."

Meanwhile, Ban Ki Moon, the South Korean diplomat who is due to take over from Mr Annan in the New Year, will spend the first nine months of his tenure in a hotel while his Manhattan residence receives an urgent $4.3 million makeover.

Despite being one of the city's most impressive addresses, the four-storey New York town house is suffering from crumbling plaster walls, constant plumbing leaks, and an electrical system that repeatedly overloads, costing $60,000 a year in emergency repairs.

Another organization that has completely lost touch with those who they are supposed to be helping!