OREANDA-NEWS. On December 13, 2007 Sistema-Hals (LSE, MICEX, RTS: HALS), a leading diversified company in the Russian and CIS real estate market, announced the signing of a strategic partnership agreement with Hebei Construction Group, a Chinese state-owned company, to carry out development projects in Russia, reported the press-centre of Sistema-Hals.

Under the agreement, Sistema-Hals plans to engage Hebei Construction Group as a general contractor to carry out construction work on certain of its development projects for a pre-agreed set fee for each project. In addition, Sistema-Hals and Hebei Construction Group intend to set up a joint venture to carry out other construction work in Russia.

The first project where Sistema-Hals envisages the involvement of Hebei Construction Group as a general contractor will be the business-class "Emerald Valley" residential complex at 28A Yelninskaya Street, Moscow. The property is being built as part of the complex reconstruction of the Kuntsevo district and when completed will cover an area of more than 60,000m?.

"With its world-class expertise in construction technology, and its highly professional management and workforce, Hebei Construction Group is able to offer the full range of construction services using first-rate materials. By combining the strength and know-how of Sistema-Hals and Hebei Construction Group we believe that this strategic partnership will result in synergies which will improve the efficiency of operations in our development projects, as well as cutting costs," said Felix Evtushenkov, President of JSC Sistema-Hals.

"The agreement with Sistema-Hals will open up a range of opportunities for exploiting the potential of Hebei Construction Group in Russia and the CIS. The partnership between our two companies will be of a strategic nature and will not be restricted to the execution of contractual construction work", said Zhang Xiuming, Chairman of the Board of Directors at Hebei Construction Group.

Hebei Construction Group (HBCG) was established in 1952 as the Bureau of Construction of Hebei Province (PRC). Over a period of more than 50 years, HBCG has become a major state construction enterprise, gaining experience and proficiency in wide-ranging disciplines - including planning and construction, development activities, the provision of a qualified workforce and foreign trading.

The properties erected by HBCG include metallurgical plants, electric power stations, oil and chemical refineries, cement factories, major environmental protection facilities, unique steel construction installations, stadiums and other sporting facilities, as well as a large number of bridges and highways.

HBCG today counts as one of the five large construction companies in China. The Group's activities have been distinguished with numerous Chinese state awards and distinctions. The China Construction Bank and the Agricultural Bank of China have assigned the Group their highest confidence rating, designating HBCG an "AAA company". HBCG and its branches are certified under the ISO 9000 quality management standards.

The Group is also involved in the construction of facilities for the Beijing Olympics, including an underground multi-purpose complex in the centre of the city. This unique project covers an area of 173,000 m?, which the organisers maintain will form one of the key sites at the Olympic Games.