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NCC announces new, major framework agreement with SALAR to build apartment blocks.

M2 EQUITYBITES-February 24, 2017-NCC announces new, major framework agreement with SALAR to build apartment blocks

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NCC AB (STO:NCCA) announced today that it is one of two construction companies that has qualified as a supplier in the second part of the Swedish Association of Local Authorities and Regions' (SALAR) major housing procurement and is eligible to sign a framework agreement with SALAR.

This four-year framework agreement, with an option to extend for two years, will come into effect in April 2017.

According to NCC, this part of the framework agreement relates to the construction of four to six-storey apartment blocks with the possibility of up to eight-storey apartment blocks.

Reportedly, municipalities around the country have expressed interest in up to 10,000 housing units and the estimated value of the total framework agreement is approximately SEK10bn.

SALAR's procurement of permanent apartment blocks is the first national procurement in Sweden that municipalities will be able to use from 2017 and onwards. The procurement has been implemented in two parts and NCC was also one of four companies that was awarded a framework agreement in the first part, which was for two to four-story apartment blocks under an agreement that was concluded in January 2017.

This current procurement pertains to turnkey residential housing units built using standardised construction methods. This enables construction times to be reduced and construction costs to be brought down, yet the residential buildings can still be constructed with high quality in terms of architectural design, sustainability and technical properties.

Also, an agreement freeze now becomes effective for ten days during which no agreements may be concluded. Following this, an agreement will be signed between the suppliers and Kommentus Inkopscentral AB (SKI), which is implementing the procurement on behalf of SALAR. The agreement is expected to be signed in March.

NCC is a leading construction, infrastructure and property development company in the Nordic region.

(EUR1.00=SEK9.51)

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Date:Feb 24, 2017
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