ILO is a specialized agency of the United Nations

268th Session
Geneva, March 1997
Programme, Financial and Administrative Committee PFA


Report of the Building Subcommittee

1. The Building Subcommittee reviewed progress reports on the extension of the premises for the ILO Regional Office for Africa in Abidjan and on the construction of the ILO premises in Islamabad.(1)

Progress report on the extension of the premises for
the ILO Regional Office for Africa in Abidjan

2. Following the approval by the Governing Body at its 267th Session (November 1996) of the construction of four floors for the annex to the building, the Subcommittee was informed that the revised plans of the building, had been approved by the Abidjan Public Works Department. The contract with the construction enterprise had also been modified to reflect the revised plan.

3. The ILO architect had visited Abidjan in early February to assess the progress made and coordinate the work still to be carried out. The enterprise had already completed the trench bottom, the braces and the base slab; the formwork for the second basement walls was in preparation. The work was progressing well and the building should be ready for use by the end of this year.

Progress report on the premises of the
ILO Office in Islamabad

4. The Subcommittee was informed that the construction work of both the office building as well as the conference hall had progressed considerably. The three-floor wing housing the offices had been completed and shaped to support the glass facade. The building is scheduled to be completed by September 1997 and the move to the new premises is expected to take place during that month.

5. For the conference hall, the entire vertical structure had been completed, making it possible to install the metal beams that would support the roof.

6. As regards the air conditioning, the Building Subcommittee recalled that in order to keep construction costs to a minimum, installation of air conditioning had been included in the list of project elements, drawn up by the architect (lift, air conditioning, generator, glass dividing walls, etc.) which could be purchased subsequently, possibly out of future income from the rental of the conference hall. The Subcommittee noted, however, that the architect had drawn the Office's attention to the fact that it would be more appropriate and cheaper to install it during the construction phase so as to avoid the additional cost of subsequently adapting the building. Resumption of work on the air conditioning once the building was occupied would be much more costly and would seriously disrupt the work of the office. In addition, in view of the high demand for the rental of the auditorium, it was essential for the hall to be equipped at the outset with an air-conditioning system. Based on an invitation to tender with six enterprises with the necessary experience and technical skills, the cost of installing the air-conditioning system, including brickwork for the housing of the equipment, was estimated at 14,182,000 rupees, that is, some 353,000 dollars.

7. At the 267th Session (November 1996) of the Governing Body, the Subcommittee had been informed of other developments regarding the financial aspects of the project. Although the cost of the construction contract in rupees initially exceeded by some 12 per cent the dollar value of the amount that had been approved for the building, successive devaluation of the rupee had reduced the dollar equivalent of the contract to the level of the approved credit.

8. In accordance with local practice, the contract with the building enterprise included a clause whereby the contractor would be entitled to adjustments for certain cost increases in accordance with movements in specific cost indices. In view of the high rate of inflation in Pakistan and of the initial delay in commencing the project, the Subcommittee was informed that such compensation had become inevitable, although negotiations were in progress to keep any increases to the minimum.

9. In order to offset any cost increases, the Subcommittee at the 264th Session of the Governing Body (November 1995), had taken the view that interest earnings on the appropriation that had been made for the building might be used for this purpose. Such an approach would be consistent with the provisions of article 22(4) of the Financial Regulations. The interest earned to date on this appropriation, after taking account of the payments that had already been made, amounted to some 115,000 dollars.

10. In order to accommodate the additional costs that would result from the purchase of the air-conditioning system, taking into account the above factors, the Subcommittee noted that it was estimated that it would be necessary to seek authorization for the project of an additional 325,000 dollars from the Building and Accommodation Fund, after taking into account the interest earned on the appropriation that had already been approved.

11. The Building Subcommittee recommends to the Programme, Financial and Administrative Committee that it recommend to the Governing Body --

(i) that it accept the proposal to install the air-conditioning system for the building and to authorize an additional credit of $325,000 for this purpose;

(ii) that the additional cost of $325,000 be financed by the Building and Accommodation Fund.

Geneva, 10 March 1997.

Point for decision: Paragraph 11.

1. GB.268/PFA/BS/1; GB.268/PFA/BS/2.

Updated by VC. Approved by NdW. Last update: 26 January 2000.