WORLD TRADE  
ORGANIZATION  WT/BFA/W/178/Rev.1 
14 November 2008 
 (08-5574) 
Committee on Budget, Finance and Administration  
  
 
UTILIZATION OF THE 2007 SURPLUS 
 
Revision
 
  
1. WTO Financial Regulation 26.3 (WT/L/156/Rev.2) states that:  " If at the end of a financial 
period the Surplus Account shows a credit balance,  the Director-General shall make proposals to the 
Committee on Budget, Finance and Administration with regard to its use which may be:  
(i) application as income against the budget for the second financial period following that 
in which the surplus occurs, thereb y reducing Members' contributions; 
(ii) transfer to the Working Capital Fund;  or 
(iii) use for any other purpose deci ded upon by the General Council." 
2. It is recalled that the Director-General's Budge tary and Financial Report for 2007 disclosed a 
credit balance in the Surplus Account of CHF 12,051,716 (WT/BFA/W/168, Statement 3). 
3. In view of the fact that the Secretariat is entering into a major building project, approved by 
the General Council on 27 May 2008
1, it is proposed that a part of the credit balance of the Surplus 
Account as at 31 December 2007 be utilised to establish a Members' transition operating fund.  
4. The Secretariat will inevitably have to face a dditional operating costs during the construction 
work in order to maintain its normal operations.  In addition, the transfer of the Secretariat's entire 
operations to a new and renovated building facility will generate some installation costs.  These 
expenditures, not yet fully determined, will have to be borne by the Organization.  There are no 
existing inclusive financial provisions for them in the approved financial envelope for building 
project, nor in the Secretariat's regular budget.   
5. The establishment of a Members' transition opera ting fund would provide a reserve to finance 
additional operating costs during the constructio n work and final installation costs once the 
construction work is completed.  It would also avoi d the need for a large incr ease in the Secretariat's 
regular budget in future years to finance non-regular activities. 
6. The type of additional operating expenditure  that will be faced by the WTO during the 
construction work could comprise:  additional security costs, temporary assistance, rental of meeting rooms and moving expenditure.  Operating a bu ilding site alongside WTO's normal operations may 
require both parties to make rapid adjustments to cope with unforeseen events.  For instance, it may 
be necessary to rent external c onference space if sufficient in-house facilities are no longer available 
owing to the ongoing construction work.  Similarly, it  is not yet clear whether it will be possible to 
maintain an in-house cafeteria service throughout th e project.  Furthermore, safety considerations 
                                                     
 
1 WT/BFA/W/170 "Agreement between the Swiss Confederation and the WTO on the long-term 
housing needs of the WTO". WT/BFA/W/178/Rev.1 
Page 2  
 
  may make it necessary to vacate larger portions of th e building than originally foreseen in order not 
to place the building occupants at risk.  The st aff and equipment movements during the building 
work will need to be precisely determined and fi nanced.  The inevitable disruption caused by the 
building project must have a minimal impact on the Secretariat's ability to continue to provide the necessary services to Members. 
7. Final installation costs once the construction wo rk is completed could comprise: moving and 
installation costs for the IT, library, archiving and document printing infrastructure into the new 
building.  It would also comprise furniture and technological upgrades in the conference and meeting rooms, office furniture and equipment and secu rity installations for the new building and 
underground parking.  The relocation of the Secret ariat's entire operations to a new and renovated 
building facility will certainly lead to changes in  the way the Secretariat operates and serves the 
Members.  The opportunity will be taken to re view the infrastructure, operating processes and 
systems, such as conference room equipment, IT ne twork, furniture and fixtures.  These costs are not 
included in the existing financial envelope for the project and would not normally be absorbed by the 
Swiss authorities.  It has also been clearly st ated in the agreement with the Swiss authorities
2 that the 
furniture and the installations put in place by th e WTO are not included in the renovation costs. 
8. Very preliminary estimates on identified pot ential additional operating costs during the 
construction work and final installation costs could total at least CHF 10 million.  A summary table is 
provided below.  This expenditure would be in curred during the life of the project, from 2009 to 
2013.  These estimates do not include any unforeseen changes that could occur, especially with 
respect to the additional operating costs during th e construction work.  The precise definition of all 
the elements that are included in , or excluded from, the existing financial envelope for the building 
project will be further defined as the project matu res.  These estimates could evolve depending on the 
final scope of the building project, and therefore they should not be considered as either the minimum or the maximum amounts we will require for any particular category of expense.  
However, they illustrate the clear  need for an operating fund.  
 
MEMBERS' TRANSITION OPERATING FUND 
 
Probable additional operating costs during the construction work Per annum Number of 
year   Total  
Security costs for the building sites 200,000 5 1,000,000 
Cafeteria short term arrangements  100,000 
Rental of external conference rooms 105,000 2 210,000 
Moving of staff to temporary office  75,000 
Document and messaging services between CDM and CWR 100,000 5 500,000 
Temporary assistance in central technical services to support divisions 100,000 4 400,000 
Engineering consulting services 200,000 4 800,000 
Total     3,085,000 
                                                      
2 WT/BFA/W/170 "Agreement between the Swiss Confederation and the WTO on the long-term 
housing needs of the WTO", chapter 2, article 2, line 3.  WT/BFA/W/178/Rev.1 
 Page 3 
 
 
   
        
Probable final installation costs once the construction work is completed Quantity  Unit cost  Total  
Moving of staff to final office 850  150  127,500 
Office furniture and equipment 500  3,000  1,500,000 
IT and telecom installation in every office 850  200  170,000 
Moving and installing IT network and data centre     1,500,000 
Moving and installing printing centre in new building     200,000 
Moving library to temporary location and final installation in new building     900,000 
Moving and installation of archives in new building     500,000 
Cafeteria auxiliary equipment and furniture     500,000 
Security installations in new building and parking     500,000 
Audiovisual and interpretation equipment for new conference rooms     1,000,000 
Furniture and technological upgrade of delegates' meeting rooms  
(<50 persons) 8  50,000  400,000 
Furniture and technological upgrade of small informal meeting rooms 8  35,000  280,000 
Common area furniture and decoration     200,000 
Total     7,777,500 
        
Grand Total     10,862,500 
 
9. The establishment of a Members' transition operating fund would provide Members with a 
budget safety net to absorb any requests up to the amount of the fund without impacting the Secretariat's regular budget.  It would also ensu re more financial stability  in the biennium budget 
cycle of the Organization by having a clearer and more transparent distinction between the normal 
operating budget and the specific expenditures on the building project.  The Secretariat would 
continue to absorb minimal requirements from its regular budget.  
 
10. The fund would be subject to the following guidelines: 
(a) The fund could only be used to fina nce additional operating costs during the 
construction work and final installati on costs once the construction work is 
completed. 
(b) The Secretariat would maintain an upda ted and detailed list of the estimated 
expenditures that could be financed by the fund.  The list would be regularly presented to the Committee. 
(c) The use of the fund would be subject to the approval of the Committee. 
(d) The Secretariat would report on the use of the fund as part of the annual financial 
report. 
(e) The General Council may authorize the replenishment of the fund through the regular 
biennium budget process or the use of the Surplus Account. 
(f) The fund will be closed at the end of the project on 31 December 2013 and any un-
used funds will be returned to the WTO accounts.  WT/BFA/W/178/Rev.1 
Page 4  
 
  11. Taking into consideration the above-mentioned po ints, the Director-General proposes that the 
credit balance of the 2007 Surplus Account be used as follows: 
 
a) CHF 8,051,716 to establish a Members' trans ition operating fund.  This would represent 
approximately 75 per cent of the very prelimin ary estimates identified.  The use of the 
fund will be subject to the approval of the Committee until the project is completed on 
31 December 2013, after which any un-used  funds will be returned to the WTO 
accounts;  and 
 
b) CHF 4,000,000, to be used as income against the 2009 budget, thereby reducing 
Members' contributions. 
12. The Committee may therefore wish to consider the following recommendation: 
 The Committee recommends to the General Council that the credit balance of the 
Surplus Account as at 31 December 2007 am ounting to CHF 12,051,716 be utilized in 
accordance with Financial Regulation 26, paragraph 3 as follows : 
 
a) CHF 8,051,716 to establish a Members' transition operating fund.  The use of the 
fund will be subject to the approval of the Committee until the project is 
completed on 31 December 2013, after which any un-used funds will be returned 
to the WTO accounts;  and  
 
b) CHF 4,000,000 to be used as income  against the 2009 budget, thereby reducing 
Members' contributions . 
 
 
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