The International Telecommunication Union (ITU) is reviewing its plans to build new headquarters in Geneva after postponing the project due to budget constraints. Originally scheduled for completion in 2026, the delay represents a setback for international Geneva.
There is not even a shadow of a bulldozer this summer, nor a crane in the skyline around the ITU’s headquarters building located on the north side of the Place des Nations.
The United Nations technology agency was due to begin the first phase of works in January to replace the oldest of its three buildings – the Varembé – with new, state-of-the-art headquarters. However, it was forced to delay plans and return to the drawing board after the building contractors’ offers exceeded its initial budget estimates.
The ITU had received interest-free loans of CHF 95.6 million from the Swiss government to finance the demolition and reconstruction of the building and CHF 42.4 million from the Canton of Geneva, both repayable over 50 years.
Part of the loan was intended to be repaid through the sale of the ITU tower, but the agency confirmed that this plan has also been put on hold and “an active sale of the tower is not currently in progress at this stage of the project”.
According to documents seen by Geneva Solutions, member states discussed alternative scenarios during an advisory meeting in July. These include downsizing the project, renovating the existing building, or even suspending the project until a financial solution has been found.
At the annual meeting of the ITU Council held later in July, members decided that the construction of new offices would go ahead as planned. However, “the ITU secretariat was asked to revise the project in order to reduce costs,” Paola Ceresetti, a spokesperson for Switzerland’s Federal Department of Foreign Affairs, told Geneva Solutions.
In an emailed statement, the ITU said it “is committed to its Geneva headquarters premises project and continues to liaise with the Government of Switzerland”.
The member states advisory group will meet tomorrow to discuss next steps, with a decision expected after the additional session of the Council, the ITU’s governing body, on 19-20 October.
A building fit for the future
Founded in 1868, the ITU is the UN’s oldest agency with an ever-growing remit that includes developing global technical standards for telecommunications, allocating satellite orbits and global radio spectrums, as well as helping to connect more people to the internet. Around 700 people from over 90 different nationalities work across its three buildings around the Place des Nations.
In 2016, plans emerged to replace the outdated Varembé building – the ITU’s home since 1962 –with modern, environmentally-friendly headquarters. Geneva-based architect Christian Dupraz, who has worked on the expansion of Geneva’s airport and renovating the glass observatory at the Botanical Garden, was selected for the project in 2018 after winning a competition process.
His design, which features an impressive interior garden and series of meeting spaces created from circular platforms suspended inside the building’s 150-metre-long glass facade, would create 720 workplaces – up from 350 in the existing building.
According to initial plans, the project was scheduled to start before the end of the year, when the two-year construction permit issued by the Canton of Geneva expires (with only a one-year extension possible).
The first phase of works, including the preparation of the construction site, was planned for spring when staff were also due to be relocated to Palexpo and the Geneva Conference Center.
However, the project came to a standstill last October when ITU received bids from general contractors higher than the total budget approved by the member states.
The offer amounts that the ITU received are unknown, but a total budget of “slightly over CHF 170m” was earmarked for the development, with ITU setting a cap of CHF 150m for the loan received by Swiss authorities and the rest of the funding provided by member states.
“This cost increase is due to inflation, which particularly affects the prices of raw materials in the construction sector, as well as to a maximum anticipation of future risks (inflation, availability of materials, etc.) on the part of the bidding general contractors,” Ceresetti said.
Bernd Domer, an expert on construction management and a professor at HEPIA, the Geneva school of engineering and architecture, told Geneva Solutions that “it was not surprising” that the cost of the project has surpassed the initial budget, especially considering that the budget was established in 2016.
“The Geneva construction price index in April 2016 was 97; the one of April 2023 was 113. This means an increase of at least 16 per cent,” he explained, citing data provided by the Canton of Geneva Statistical Office.
A cancellation of the project, or further delays, could have significant financial consequences for the organisation as an initial loan of CHF 21m loan received from Switzerland for architectural and engineering services, and project design would still need to be repaid by ITU within three years.
The United States State Department’s Bureau of Overseas Buildings Operations, which is supporting the member state advisory group on the project, indicated in a site visit report last June that “aggressively negotiating down the costs by working closely with the design team, general contractors, the project manager, and Switzerland” is the only viable solution to finally putting the shovel in the dirt.
In the notes from the July advisory board meeting, the ITU’s deputy secretary general shared that Switzerland would be ready to recommend an extra loan request to parliament, but not before “all the efforts to reduce the cost were exercised”.
A possible push for the project could come from the private sector and further donations from member states. But so far, only seven countries and one sector member are listed as donors on the ITU webpage. Among the countries, Kuwait pledged to contribute CHF 2.4m for the reception area and the internal garden, while Saudi Arabia and the United Emirates will sponsor two conference rooms. Senegal is sponsoring a breastfeeding room with a donation of CHF 100,000.
Intersputnik, a Moscow-based international organisation providing satellite communications services and representing 26 ITU members mostly from the former Soviet bloc, and whose board’s chair is “a senior civil servant in the Russian government”, will sponsor the 200-seat dining area named “Intersputnik Café”, as confirmed by the ITU in an email.
Not just any building: a crucial litmus test for international Geneva
ITU’s new headquarters building is an important milestone for international Geneva, which has hosted the agency since 1948 when it relocated to the city from Bern.
Its decision in 2018 to stay put and create a new office was a coup for Geneva and Switzerland amid ever-growing competition from cities vying to take the lead and create their own respective hubs, particularly in key sectors such as technology.
But equally, any setbacks in the plan could also present a major blow as it seeks to maintain its reputation as a capital for multilateralism. Geneva hosts around 38 international organisations and approximately 430 NGOs, and maintaining and building office buildings is key for keeping and hosting new organisations.
Among other recent developments, the Confederation and Canton have also provided an interest-free loan to cover half of the CHF836.5 million renovation cost for the historic United Nations Palais des Nations.
As the ITU examines how to reduce costs, revising the whole design could present a difficult challenge, said Domer. What’s more, a new bidding process with contractors would have to be started, which would generate more costs and delay the development further.
“In my experience, the probability that this approach works is low, but without this effort, negotiations between client and contractor will be very difficult,” he continued.
Geneva Solutions reached out to Dupraz for comments about the latest project developments but declined to comment.