STOCKHOLM, Sweden, April 7, 2003 (PRIMEZONE) -- Skanska (Other OTC:SKSBF) will carry out Norway's first-ever public-private partnership project. In addition to designing and constructing, Skanska will also operate and maintain a section of the E39 highway.
The construction contract with the Norwegian National Road Administration (Statens Vegvesen) is worth more than SEK 1.6 billion and is included in the order bookings for the first quarter of 2003. This means that Norwegian subsidiary Selmer Skanska receives its largest ever road and civil construction contract.
Skanska BOT and Laing Roads Ltd. are responsible for the financing solution through their joint company set up to carry out the concession, Orkdalsvegen AS. Skanska and Laing Roads Ltd. will each invest around SEK 80 M. Debt financing will be provided by Handelsbanken, Nordea, LB Kiel and the Nordic Investment Bank.
The agreement covers a 27-kilometer stretch of the E39 highway between Klett and Bardshaug, some 20 kilometers south of Trondheim in central Norway. A 22-kilometer stretch will be constructed and the remaining five kilometers improved. The new route includes a total of 10 kilometers of tunnels and 12 bridges of which the longest is 240 meters. Skanska will assume overall responsibility for the operation and maintenance of the new route once it is completed in September 2005. The operation contract is valid for 25 years.
Orkdalsvegen's remuneration will be based on the road's availability and quality. The Norwegian National Road Administration aims to increase safety on the accident-prone route -- a bonus will, therefore, also be issued if the frequency of accidents can be reduced.
"We welcome the new procurement form which gives us the possibility to deploy our expertise in the entire process from design and construction to operation and maintenance," said Petter Eiken, President of Selmer Skanska.
"With this project, the Norwegian authorities show that they want to delegate more responsibility for the production and maintenance of the road network to private entrepreneurs and in this way give more back to the taxpayers," added Petter Eiken.
"We reduce costs and ensure that the road can be built already now even though government funding is not available until later," said Gunnar Lundberg, head of the project within Skanska BOT.
"For Skanska, this also improves the possibilities for acquiring major construction contracts through our role as investor. This strengthens the Group's position, and we hope to gain further future opprtunities in the market for privately financed infrastructure," said Gunnar Lundberg.
This is the second road project in the Nordic region that is being carried out in a public-private partnership, and also the second in which Skanska is participating. The first was the highway between Helsinki and Lahti in Finland that Skanska designed and built in 1997- 1999 and now has responsibility for operation and maintenance. In Santiago, Chile, the expansion of Autopista Central is under way and Skanska will operate it once the project is completed.
To date, Skanska's largest contract of the PPP model concerns the Walsgrave Hospital in Coventry, a project valued at GBP 484 M, or approximately SEK 6.86 billion.
Public-private cooperation and privately financed infrastructure go by several names -- PPP (Public Private Partnership), PFI (Private Finance Initiative) and BOT (Build-Operate-Transfer) are some of the terms. In Norway, this concept is known as OPS.
For further information please contact: Petter Eiken, President, Selmer Skanska, tel +47 98 21 00 00 Pia Farstad, Information Director, Selmer Skanska, tel +47 92 25 11 11 Gunnar Lundberg, Project Manager, Skanska BOT, tel +46 70 564 28 89 Peter Gimbe, Press Officer Skanska AB, tel +46 8 753 88 38
This and previous releases can also be found at www.skanska.com
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http://www.waymaker.net/bitonline/2003/04/07/20030407BIT00570/wkr0001.doc
http://www.waymaker.net/bitonline/2003/04/07/20030407BIT00570/wkr0002.pdf