Mr. Chair,

1. I have the honour to deliver this statement on behalf of the Group of 77 and China on agenda item 137, "Programme budget for 2026", concerning the capital master plan.

2. The Group thanks the Acting Director of the Office of Programme Planning Finance and Budget, Mr. Yacine Hamzaoui, and the Vice-Chair of the Advisory Committee on Administrative and Budgetary Questions, Mr. Katlego Boase Mmalane, for introducing the twenty-fourth annual progress report of the Secretary-General and the related report of the Advisory Committee.

3. The Group notes that all construction work and related administrative close-out activities have been completed, except those associated with the remaining arbitration case. We remain concerned that the prolonged proceedings continue to delay the financial closure of the project and generate additional legal expenses.

4. We note that the hearing on the third and final phase has been postponed to December 2026 and that the Secretariat now anticipates a decision in late 2027 or early 2028, while recognizing that its timing rests with the arbitral tribunal. We look forward to receiving updated information during informal consultations on the expected procedural steps and their financial implications.

5. The Group notes the continued efforts of the Office of Legal Affairs, with the assistance of outside counsel, to defend the Organization's interests. We note the reduction in estimated potential liability for the remaining phase from approximately $16 million to $5.6 million, excluding applicable interest and legal costs, and the possibility that counterclaims could offset some or all of that exposure. These developments underscore the importance of continuing to protect the rights and limit the financial liabilities of the United Nations.

Mr. Chair,

6. Nevertheless, the Group shares the Advisory Committee's concern regarding increasing legal expenses. Accumulated expenditure reached approximately $11.64 million as of 30 June 2026, with an additional $830,000 estimated for the remainder of the year. We encourage continued efforts to contain these costs and pursue a timely and cost-effective resolution of the remaining arbitration in the Organization's best interests, in accordance with paragraph 3 of General Assembly resolution 80/232.

7. The Group notes that the approved funding of approximately $2.15 billion has been fully committed and that, as of 30 June 2026, expenditure exceeded the approved funding by $2.8 million. With no remaining cash balance in the capital master plan fund, further expenses are being met from the regular budget appropriation of the Department of Operational Support. We request a clear and updated account of expenditure, anticipated liabilities and the proposed sources of funding for 2026 and 2027.

8. In this regard, the Group reiterates the importance of respecting the General Assembly's authority over budgetary decisions. We share the Advisory Committee's view that proposals to fund requirements above the maximum overall approved budget should be presented to the Assembly for consideration.

9. We also underline the importance of preserving and applying lessons learned from the capital master plan to ongoing and future construction projects. We note the preparation of updated construction management guidelines and encourage particular attention to project governance, procurement, change-order management, risk assessment and vendor performance, with a view to preventing avoidable disputes and safeguarding the Organization's interests.

10. The Group of 77 and China remains committed to engaging constructively in informal consultations towards the responsible financial closure of the capital master plan, with full regard for transparency, accountability and the prudent use of Member States' resources.

Thank you.