Let me first of all stress how impressed I am, after two weeks on the ground, by the spirit of co-operation between the different international organizations working in Kosovo, by their readiness to overcome difficult conditions, and by their determination to make things happen. This is only exceeded by the efforts and the enthusiasm of the Kosovar population determined to leave behind them a decade of systematic deprivation and the traumatic experience of attempted ethnic cleansing.

I am confident that we can build on this tremendous good-will and the international community's determination to establish a systematic and complementary approach for the different donors.

To allow UNMIK to plan the reconstruction of Kosovo and to enable the donor community to programme support for this plan, we obviously have to have a clear picture of what is to be done in the short run as well as in the medium and long term. This requires, on the one hand, a sound damage assessment and, on the other hand, a joint strategy towards the reconstruction and further development of Kosovo.

In this speech I will summarize the information available at this moment on the damage and the cost of reconstruction and indicate at the end how the next steps of a successful and sustainable assistance strategy should be defined.

Already in early 1999, the European Commission had commissioned a study from the International Management Group to assess the damage caused during the one year of civil unrest in Kosovo. The survey showed that right from the beginning of the unrest in early 1998, the Serbian troops and the paramilitary, in their rampant campaign to intimidate the Kosovar Albanians, has started to destroy dwellings. According to the study, 29.000 out of 60.000 houses assessed had been damaged.

These findings were soon overtaken by events: After the failure of the Rambouillet Agreement and the beginning of NATO action, the Serbian campaign of intimidation and violence against the Kosovar Albanians was accelerated and expanded - causing the destruction of a considerable percentage of the individual housing stock and of public buildings. Only a very limited amount of damage was caused by NATO bombings. Unfortunately, vandalism and destruction - now mainly of Serbian homes - continue until to-day.

Following the withdrawal of Yugoslav troops in mid-June, the findings of IMG's first study had to be up-dated to identify the level of additional damage and of the additional reconstruction requirements. The consultant was assigned two tasks:

- first a quick assessment of the damages focusing on the scale and cost of the urgent repairs of houses and related basic infrastructure. A quick start of these repairs will complement the emergency humanitarian assistance and will enable refugees to return to their homes before the beginning of the winter.

- The second task is the completion of a more comprehensive study - taking into consideration the findings of other organizations - in order to prepare the longer term reconstruction process, including the establishment of a database as a lasting instrument for all international assistance. This more detailed assessment - to be completed within six months - will also cover the transport infrastructure, public utilities, the economic infrastructure and the religious and cultural heritage of Kosovo.

The first task, the rapid assessment, has been completed and the findings be summarized as follows:

1. As far as housing is concerned:

A survey - building upon the February findings - has been carried out covering almost all of the more than 1400 villages in Kosovo. The assessment was done over a three-week period by four teams of altogether 20 people, including architects and civil engineers.

In total 120.000 housing units have been damaged - out of total housing stock of approximately 250.000 units. In comparison with the February figures, the number of damaged houses has significantly increased.

Not all houses have been damaged to the same extent. Damage assessment in the study has been classified according to four categories - with categories 3 and 4 representing 40 to 100 percent damage. Around 65 % of the damaged houses, or 78.000 units, are listed under these categories. They will require complete, or near complete rebuilding.

Another damage assessment has been carried out by UNHCR. Although using a different methodology (based on a smaller sample of villages and involving a network of NGO's and KFOR in the field work), their figures largely corroborate the IMG findings. Comparing the present situation with the situation before March, UNHCR records a two-fold increase in severely damaged homes and a near tripling of completely destroyed houses.

Additionally, figures are available from NIMA, the US Government's National Imagery and Mapping Agency. Analysis of remote sensing and intelligence data during the Yugoslav troop withdrawal of Kosovo indicates that approximately 68.000 buildings were seriously damaged. As not all damage can be observed from the air and part of the remote sensing image date from before the end of the occupation, the NIMA figure also corroborates the IMG findings.

All three surveys indicate that from a geographical point of view the highest percentage of destruction falls within the areas with the highest ethnic Albanian population. With the exception of Djakovica, Decani, Pec and Mitrovica, relatively small percentages of destruction were observed in major cities, where damage was more isolated and highly selective. Less destruction was identified in the predominantly ethnic Serb populated areas.

The estimates from the three sources indicate a similar magnitude of damage. Cost estimates for the housing damages in the assessment amount to 1,1 bn EURO. This amount reflects the structural damage as well as the damage inside the houses excluding furniture, household appliances and personal effects. This amount is an estimate of the full replacement value, i.e. it is the monetary cost of reconstituting the property, using in some instances improved standards of construction.

In order to estimate the realistic cost of reconstruction, and the need for external assistance, it has to be borne in mind that most of the repair work can be carried out by the owners themselves and will not require cash payments. Secondly, that not all houses will be reconstructed, and thirdly that not all reconstruction will follow the previous design. Therefore, the monetary cost of the reconstruction of the houses -and the need for foreign assistance- might be well below the quoted figure. In the short run, the most urgent need is for the structural repairs on the outside (roofs, walls, doors and windows) in order to make the house fit for habitation. A rough estimate of the cost of the immediate supply of the most urgently needed building materials for structural repairs might range from 20 to 25 % of the global housing stock rehabilitation cost.

2. The value of the damage to basic local infrastructure (namely schools, health centers, local energy and water distribution networks) is estimated at 40 million EURO. More detailed surveys by them, KFOR and - I understand - by UNHCR with the help of Oxfam, by UNICEF on schools and WHO on health facilities will follow.

3. As far as the physical infrastructure is concerned, first findings for the transport sector indicate that the roads in Kosovo have not suffered much from the war but are degraded due to lack of maintenance. Cost estimates for the immediate supply of equipment for emergency repair as well as for urgently needed ice and snow-clearing equipment amount to 4 million EURO. Annual maintenance costs for the existing network are estimated at 8,4 million EURO, repair costs for the 13 destroyed bridges at 9 million EURO, and rehabilitation costs for Pristina airport at 10 million EURO.

4. The comprehensive study will also cover the damage to productive infrastructure. This is a complex problem that should be tackled from the angle of investment needs for productive infrastructure rather than from the angle of the damage suffered. This also applies to the public utilities such as the power stations.

Putting together the available estimates for urgent structural repairs to houses, for basic local services and for physical infrastructure, one arrives at a total amount of around 300 million EURO to be made available before the end of the year. This figure excludes the internal repairs to houses and the investment in productive investment and is of course liable to be revised once more detailed estimates are made of the repairs to infrastructure.

Only after the availability of more comprehensive assessments can the overall costs for reconstruction be known more precisely. We will address these issues again at the next conference.

Producing estimates of damage or of reconstruction costs is not an academic exercise, and lack of comprehensive data or of absolute precision is no excuse for delaying action.

At this moment, apart from the emergency relief program, various donors have already committed funds for the reconstruction effort and are preparing their operational programs. More resources will be needed. It is however as important that a common approach is defined for the implementation of the reconstruction assistance.

To ensure maximum efficiency of the assistance and a smooth transition between the present emergency phase and the rehabilitation and reconstruction phase, UNMIK have to put into place a policy framework identifying priorities within which donors could act in close cooperation with each other. During the past weeks numerous meetings have taken place in Pristina, and some principles regarding our work have emerged.

In the first place, it is generally accepted that the reconstruction process provides a unique opportunity to support local economic activity, to strengthen community involvement and solidarity, and to foster closer economic links within the region. This implies that every effort has to be made to ensure