The United Nations Office for Project Services (UNOPS)

Statement to the annual session of the Executive Board 2018

Statement by Grete Faremo, Under-Secretary-General and Executive Director UNOPS, to UNDP/UNFPA/UNOPS Executive Board Annual Session, New York – 4 June 2018.

[Check against delivery]

Thank you, Mr. President!

As always, it is a great pleasure to be here in New York with you all.


Annual results

Distinguished Board Members.

It is my privilege, my pleasure and my duty today to report back on 2017.

In many respects this was a record year for UNOPS.

2017 saw increased efforts to implement the Sustainable Development Goals (SDGs). As national authorities have been taking up the challenge, we saw our work directly with governments grow further.

This is now more than a third of our total volume of services. And we continue to be called upon by national governments when there is work to be done.

Over the course of the year, UNOPS delivery exceeded 1.8 billion dollars – more than 25 per cent increase on the previous year.  As demand for our work continues to grow, at the same time, we have become more efficient.

When I joined UNOPS in 2014 we had an average fee per project of 5.6%.

In 2017, that figure had dropped to 4.9%.  This means that partners also receive better value for their money now.

And even more important is the impact of our work.

We strive to achieve local impact.

Last year we created more than 2.1 million days of paid work for local communities.

And our support – as ever – was field-focused:  In 2017 most of our work took place in countries like Myanmar, Somalia, South Sudan and Mali.

I am proud to present you an Annual Report which reflects a strong and positive organization.  And this would not have been possible without many dedicated and committed people working tirelessly to improve people’s lives and helping countries achieve the SDGs. We share a sense of urgency, and we are united in a common aim.

I want to place on record my heartfelt appreciation, to all those members of UNOPS personnel, who often forsake traditional comforts to undertake incredible tasks to make our world a better place.

Operational context

To look back at the past year without placing this report in context, would be remiss.

We saw great human progress in many parts of the world.

We globally also faced growing inequality and unprecedented needs.  We saw crisis with huge consequences for millions of people.

Last year on sharing our annual results, I gave updates on our work implementing Security Council and General Assembly resolutions in Gaza and Yemen. I also described our work supporting critical humanitarian issues in Iraq and Syria.

Much of this work continued through 2017, as it does to this day.

For example, last year we helped bring more than 600 million tonnes of cement into Gaza for more than 23,000 families to rebuild homes.

We also helped bring more than 600 million tonnes of vital supplies of food and fuel into Yemen.

Since then, our work in Yemen has evolved.

At the end of 2017 we agreed with the World Bank to help restore critical infrastructure to 1.2 million Yemenis. We have also committed to help deliver solar energy to more than a million people in the country – to those in desperate need of power.

A rise in our green energy infrastructure work is addressed in our report.

In Sierra Leone we have been working with the UK government to bring renewable energy to hundreds of thousands of people across the country.

To do this, we pioneer a new model.

We use the roofs of health centres as power stations.

In Sierra Leone, the context is the aftermath of the Ebola crisis of 2014.

Wherever you are, it is impossible to run adequate medical facilities with no power.

Yet beyond the major cities, grid infrastructure is limited in Sierra Leone.

Last year we installed solar power stations at 54 community health centres, across 12 districts in the country.  By setting up micro grids to connect these stations, we can both upgrade healthcare, and provide clean and green power to underserved communities.

The next step is to bring the private sector in to manage and maintain the networks.

It is a model that brings together health, climate and energy solutions, along with local, regional and national governments, the private sector and our infrastructure expertise.

We are also in Colombia.

At the start of 2017, after more than fifty years of conflict, displacement figures were stark.

More people had been displaced due to violence, than in almost anywhere else in the world.

Amongst the needs, housing was, and remains, a critical concern.

More than half a million families needed new and better homes.

More than a million people lived in shacks and squalor.

So here, we have been supporting the government with housing upgrades reaching more than 28,000 people, in sixty locations, across the country.

Infrastructure

When helping to rebuild communities, we look for the potential to address broader social concerns. Culture, environment, economic status; all are critical to building safe and stable communities.  To develop a social housing model that works in the long run, you need to encourage a sense of ownership for both families and communities.

And infrastructure is about more than just shelter.

It’s about removing barriers for children to attend school.

It’s about supporting families to adopt healthy living practices.

It’s about reducing the drivers of displacement and building a sense of belonging.

And it’s critical to sustaining peace.

Only last month, the Secretary General reiterated the importance of infrastructure to achieve the SDGs. We are proud to be the lead UN organization in this field.

More and more, we are seeing a broader recognition, of just how important infrastructure can be, as a bedrock underpinning many of the SDGs.

To respond to this, we have invested significantly over recent years. In our ability to apply industry level standards. In our adoption of international best practices. And in our people, processes and approaches. All of this is geared to one aim: To support our delivery of resilient and sustainable infrastructure. Last year we worked on 35 schools, 47 hospitals, more than 200 health clinics and 2000 kilometres of roads - to mention but a few examples.

Increasingly, we also see fellow members of the UN family take on infrastructure projects.

Internal competition in the UN is not necessarily bad – if it leads to increased efficiency.

But we would be blinding ourselves to reality, if we pretend competition does not exist.

Our survival as an organization depends on our ability to attract projects.

As our record year of delivery shows, I am not here leading an organization in crisis.

We are not competing for work for the benefit of our own survival.

My point is merely this: By not involving UNOPS in infrastructure works, the benefits of working to the highest quality standards with global expertise are not reaped.

Simply, our chances of success are greater when we work together and focus on our respective strengths.

Procurement

Distinguished members,

As we continue the UN reform process, we must constantly ask ourselves:

Are we really making the best possible use of the resources we have, in order to implement the SDGs?

At UNOPS, the majority of our delivery last year came in the form of procurement.

In total, the goods and services we procured for our partners exceeded a billion dollars.

And in support of national economies, more than half of these budgets, went to local suppliers.

In this area of our work I would like to share examples of our expertise in public procurement.

Our aim here is simple: to encourage national public procurement models that are sustainable and more efficient.

In numerous countries in Latin America, we support the government's’ national health care efforts.

For example, last year in Guatemala, we helped stock more than 120 hospitals and health centres across the country with vital medicines.

More efficient procurement means we strive for greater levels of transparency, greater value for money.  And through this a greater impact at national level and better public services to the people they serve.

Through using UNOPS transparent and efficient procurement processes, Guatemala’s social security institute, estimated savings in 2017 of close to 27 million dollars - around 50 per cent.

Another example is in Honduras.

In this case, as well as delivering efficiency savings of between 30 to 70 per cent on medicines, we are advising the government with complete infrastructure and equipment needs assessments for national hospitals, and a range of strategic planning advice.

We see the potential of this area of procurement as vast.

National authorities can demonstrate transparency, and at the same time increase the support they can offer to their citizens, through enhancing the effect of resources available for public procurement.

Shared services

These examples stand out because they demonstrate significant and easily measurable achievements.  Of course, not every project is designed to deliver such impact.  But that doesn’t mean they are less important.

Throughout the UN, we have much in common when it comes to projects.

Every activity needs human resources.

Every activity needs supplies.

Every activity needs the ability to manage finances.

You are no doubt aware that UNOPS provides management support services to many of the UN organizations.

  • Last year, for example, we managed the contracts of more than 7000 people for partners like UNHCR, UNEP, UNICEF, UN-HABITAT and WHO, to name but a few.
  • You may recall I said that our procurement totals in 2017 amounted to more than 1 bill USD.  Around a quarter of this is done for our UN partners.

We host and manage the UN global marketplace, which connects around 98 per cent of the UN annual spend in 2017 estimated at more than 18 billion dollars, to companies around the world.

By providing modern, technology based, shared services, we allow our partners in the UN to focus on their core activities.

Future challenges

Distinguished members.

We are fully committed to supporting the UN reform process as adopted last Thursday.

And I firmly believe through our decades of experience, we help drive cost-efficiency and innovation.

Currently, we are analyzing how funding aspects of the new resident coordinators system may impact our work.  We understand, given UNOPS does not receive any un-earmarked funds from donors, the costs for us will be disproportionally high.

We are asked to core-fund another part of the UN system, potentially twice, through both increases in the existing cost sharing arrangements, and a levy per project.  We have to look keenly to how this will affect our value-add to partners.

I am sorry to say, but the immediate impact of this proposal challenges our cost-efficiency model in a negative way.   My message to the board today is clear.

Details will have to be sorted, but we may - as many of our colleagues in the UN family - have no alternative other than to transfer the added costs onto our partners.

Another challenge you should be aware of relates to our footprint in the field.

We don’t have a permanent, physical presence in all countries we work.

In some places where it makes sense not to develop a fully-fledged office, we use a setup similar to a global shared services model, for our operations.

The principle is based on a flexible approach, which allows us to make the most of the resources we have across multiple countries.  But it also means that we must take care to avoid being left out of country teams’ work and deliberations.  If we are left out from sharing information and expertise we may be prevented from providing the support that many countries truly need and demand.

Again, we are not alone in facing this challenge.

And we recognize that the reform process should not be guided by individual concerns.

But given the direct impact this has on our support, I feel it my duty to bring this to the attention of the board.  For the benefit of all, I truly hope we can find a way to quickly address these issues.

We also recognize our own financial models need to evolve.

As discussed with the board, following twelve consecutive years of operational surpluses, we rebuilt our operational reserves.

In the early to mid-2000s this organization was close to bankruptcy.

Given our institutional memory, we will proceed with caution. We will be prudent and frugal.

However, based on your guidance and support, we will now start to invest some of this surplus.

Our focus here is dual; further modernization of our organization and innovative projects that bring much-needed foreign direct investment to help countries in various stages of development to achieve the SDGs.



Conclusions

To conclude:

When I addressed the Board in January last year I described how we responded to the priorities of the then new Secretary General.

In September you adopted UNOPS Strategic Plan 2018-2021 and endorsed our commitment to enhance focus on prevention and provide greater levels of efficiency and effectiveness in work across all three pillars of the UN, peace and security. as well as humanitarian and development efforts.

In January this year I shared our pledge to address gender concerns, and to make our organization more representative of the people we serve. And I shared our commitment, as a part of the UN tasked with implementation. Today, in a world with rapidly growing challenges, you have heard many practical examples of our implementation work.  As a United Nations, I firmly believe we can deliver practical, sustainable, new and innovative solutions, to some of the most intractable challenges we face today.

That may sound grandiose. But this report demonstrates the potential we have to contribute.

We are a growing and evolving organization. And we could do so much more.

Put simply: We are committed to do our utmost to ensure implementation of Agenda 2030.

And we will always respond to needs that challenging situations on the ground demand from us.

Thank you.


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