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Strategic Heritage Plan and PPP

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Background Information

The United Nations Office in Geneva (UNOG) represented by the United Nations administration and in cooperation with other departments within the United Nations has been given the task to develop the Strategic Heritage Plan (SHP) of the Palais des Nations, Geneva. The latter is in need of substantial funds for its renovation. The member States have asked the UNOG Project Team to investigate alternative funding mechanisms, including Public Private Partnerships (PPPs).

In view of the UNECE’s resident expertise in PPP and its strong network of experts with PPP experience, UNOG and UNECE have agreed to cooperate on this task, and specifically in the preparations of a report and recommendations on alternative funding mechanisms for the SHP to the General Assembly in New York in 2013. The report will be prepared and the advice of the members of the UNECE Team of Specialists on PPPs will be considered in this context. As part of this cooperation, the UNECE held a series of high level discussions in Geneva to explore key PPP models and case studies on the renovation of government buildings and their applicability in the renovation of the Palais des Nations.

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High level discussions at UNECE

The first part of the high level discussion at UNECE on the Strategic Heritage Plan of the Palais des Nations and Public-Private Partnerships focused on the PPP options to renovate public buildings with a review of best practices and their applicability for the Palais des Nations. This discussion was held at the Palais des Nations, Geneva, on 6 December 2012. A discussion paper was prepared by the UNECE secretariat as background material, and the Team of Specialists on PPPs provided preliminary recommendations to UNOG and member States on the use of PPP models to renovate the Palais des Nations.

The second part of the high level discussion on the PPP options for the renovation of the Palais des Nations took place on 5 February 2013 at the fourth session of the UNECE Team of Specialists on PPPs, and focused on the following issues:

•    Procurement;
•    Legal and institutional;
•    Financial models;
•    Labour/staffing.

These and other issues will be included in the baseline study of the risks associated with different PPP models to be prepared by Toyo University under the auspices of the Team of Specialists on PPPs.

Site-Visit to UK PFI Projects in London, 25 March 2013

At the request of UNOG, the UNECE Secretariat in cooperation with the Infrastructure UK organized a one-day-visit to operational PPP/PFI projects in the UK, namely HM Treasury, the Ministry of Defence and prospective Home Office buildings. These projects were identified by UNECE for their similarity with the Palais des Nations in terms of the amount of requested investments, issues related to financing, legal and technical matters.

The purpose of this visit was as follows:
•    discuss with PPP practitioners, especially those responsible for PFI contract implementation, the salient issues UNOG must deal with as prospective PPP managers;
•    obtain a clear understanding of both the advantages and risks in doing PPPs;
•    understand how contracts are managed and how the key performance indicators (KPIs) work; and
•   understand the role of the public sector in monitoring the performance of the private sector operators rather than managing staff directly involved in operation and maintenance (O&M) (such as, gardeners, painters, electricians etc).

The UN delegation was led by Clemens Adams, Director of the UN Administration in Geneva, and Geoffrey Hamilton, Head of the UNECE PPP Programme.

Contribution by Toyo University to the SHP

A PPP delegation from Toyo University in Japan led by Professor Sam Tabuchi, vice Chair of the UNECE Team of Specialists on PPPs, visited Geneva from 5 to 9 April. The purpose of the visit was to hold high-level consultations with representatives from Member States, financial institutions contractors and developers, on the basis of which a pre-feasibility conceptual study on PPP options for the renovation of the Palais des Nations was prepared.

The Preliminary Study on the Various PPP Options for the Renovation of the Palais des Nations, which Toyo University undertook on a pro-bono basis under the auspices of the UNECE Team of Specialists on PPPs, was peer-reviewed by a number of international PPP experts in the area of finance, legal and technical issues within the UNECE PPP expert network. Certain elements of the Toyo University study were used in the UNECE study to UNOG on alternative financing options to renovate the Palais des Nations.

Recommendations to UNOG - May 2013

A baseline study on the feasibility of using PPPs for the renovation of the Palais des Nations was prepared by the secretariat under the auspices of the Bureau of the UNECE Team of Specialists on PPPs (TOS PPP) and its co-Chairpersons, with the technical support of an ad hoc expert task force consisting of TOS PPP members. The study recommends to UNOG that the next step is for the General Assembly to authorise a feasibility study to be carried out by the United Nations, thereby providing the necessary data by which the Member States can determine whether the PPP option provides better value for money than the traditional form of procurement.

The initial challenge for UNOG is that bringing the idea into reality will require new capacity, UNOG also because of the tremendous goodwill of its Member States can rely on top level expertise on PPP from the governments from both developed and developing countries, who are also members of the UNECE International PPP Centre of Excellence. In terms of the steps for the development of PPP inside the Palais des Nations, the following three additional recommendations are made:

  1. An event may be held in New York to discuss PPP options and whether they are compatible with UN rules and regulations;
  2. A component of the feasibility study, i.e. a Public Sector Comparator (PSC) could be carried out under the auspices of the UNECE TOS PPP; and
  3. Studies and materials collected for providing advice to UNOG should be made available to Member States interested in using PPP models for renovation of their public buildings.

PPP Experiences in Renovation Projects

This space will be used to showcase recent PPP experiences from around the world in renovation projects. A number of case studies from France, the Netherlands, Switzerland, the UK and the US were showcased at the PPP sessions on 6 December 2012 and on 5 February 2013.