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UNITED NATIONS (Reuters) - Swedish construction group Skanska AB has been selected by the United Nations to be the construction manager for its Capital Master Plan to renovate the U.N. headquarters in New York.
Alicia Barcena, Under-Secretary-General for Management at the United Nations, told a news conference a contract had been signed on Friday with Skanska for the preconstruction phase.
The initial value of the contract signed with Skanska's U.S. subsidiary is $7 million but the eventual potential value of the work was around $1 billion, she said.
"Skanska expects to perform the project on a phased basis through 2014, with a total anticipated value of the work being approximately $1 billion," a press release on the deal said.
The U.N. Capital Master Plan is a $1.88 billion project to modernize the iconic skyscraper overlooking Manhattan's East River and other buildings in the complex.
The blue-tinted glass and steel 38-story structure, whose original architects included France's Le Corbusier, has been increasingly showing its age.
It has water dripping through its roof, toxic asbestos lining its ceiling tiles, no sprinklers in case of fire, and erratic heating and cooling systems.
Planning to refurbish it originally began in 1995 but no work has started and the project is not expected to be completed until 2014. The current plan calls for a temporary structure to be erected on the U.N. lawn to accommodate staff.
"This is a very significant contract by any standard," Barcena said. "The signing of this agreement is a major step in making the U.N. headquarters a safer, healthier, more secure, more energy efficient place for all of us who work here."
Skanska USA will examine the current plans for the renovation and submit a guaranteed maximum price for each phase of the project before the United Nations makes a decision on the award of final construction contracts, Barcena said.
"This will be an enormous project," she said.
Earlier this month the United Nations announced the appointment of U.S. architect Michael Adlerstein, who has helped renovate buildings ranging from the Statue of Liberty to the Taj Mahal, to take over the project.
The job has been vacant a year since real estate veteran Louis Frederick Reuter, also American, quit after 10 months in frustration at what he called the difficulty of working within the U.N. system and lack of support from major nations, including the United States.