Chennai is one of four cities across the world to which the United Nations (UN) refugee agency is considering the shifting of some key services from its headquarters in Geneva, Press Trust of India (PTI) reported.

Bucharest (Romania), Budapest (Hungary) and Kuala Lumpur are the cities pitted against the south Indian metropolis as the United Nations High Commission for Refugees decides on transferring its human resources, supply management, financial and administrative functions.

Pricewaterhouse Coopers, which did a study for UNHCR, shortlisted these four metros from a list of 20 cities, including Hyderabad and Dubai, after a four-month exercise that began in mid-December last year.The rationale behind the UNHCR’s move is to reap substantial financial benefits it could get by moving to lower-cost locations that will help in freeing funds for benefeciaries.
A study has said that by shifting the services to Chennai, the agency could save US$25.9 million in the first five years as against Kuala Lumpur, which could lead to savings of US$27.6 million.But the savings from Bucharest and Budapest are less — US$18.1 million and US$23.4 million respectively, the study, conducted during December 2006 and April 2007, said.

In the first 10 years, the savings in Budapest will US$69 million, US$80.5 million in Bucharest, US$85.3 million in Chennai and US$88.6 million in Kuala Lumpur.

In a word of caution, the report said the main challenge the agency would have to face if it selects Chennai would be to attract and keep the right quality of people considering the high rate of attrition in the city.

“The risks are related to the attrition rate and the uncertain development of labour cost. Other areas show only a medium level of location scoring for Chennai,” it said.Another issue before the agency would be the “negligible” presence of French-speaking people in Chennai.The report said from a salary inflation perspective, Kuala Lumpur looks the safest option as it is the location with the highest return and as there currently are no signals pointing to any sharp salary inflation.

“For Chennai, Budapest and Bucharest, the situation is different. Budapest and Bucharest have already entered the European Union and will eventually adopt the euro…Chennai is in India with an economy that is showing some signs of over-heating,” it said.

Pricewaterhouse Coopers has suggested that the UNHCR should concurrently open negotiations with all four concerned governments and try to convince them to offer more benefits.”UNHCR would profit financially and culturally, which would prove that the organisation in not only committed but also capable of delivering high value to beneficiaries with the funds it receives from its donors,” it said.