IN Brief:
- Two Rūdninkai construction packages carry a combined value of €372.7m excluding VAT.
- Merko Statyba will deliver more than 190,000 sq m of buildings by late 2028.
- The PPP combines construction finance with long-term facilities management responsibilities.
Merko Ehitus has completed the investment and financing arrangements required to advance two major construction packages at Lithuania’s Rūdninkai military campus.
Its Lithuanian subsidiary, Merko Statyba, will remain main contractor for parts B and C of the public-private partnership. The design-and-build agreement for part B is valued at €174m excluding VAT, while part C is worth €198.7m, bringing the combined construction value to €372.7m.
Completion of the two packages is scheduled for the fourth quarter of 2028. Together they cover more than 190,000 sq m of buildings and over 310,000 sq m of infrastructure, external works, and landscaping.
Property investor Kapitel has joined the project companies through a subsidiary that has acquired 70% of the special-purpose vehicles responsible for parts B and C, along with the associated facilities management business. Merko retains the remaining 30%, maintaining a long-term interest in the operation of the completed assets.
Finance is being provided by the European Investment Bank and commercial lenders, with SEB supporting part B and Swedbank financing part C. The completed arrangements allow the previously agreed design, construction, and maintenance contracts to move into full delivery.
The wider Rūdninkai campus extends across approximately 170 hectares and is being developed to accommodate a German brigade of around 4,000 military personnel, supported by approximately 750 civilian employees. Planned facilities include barracks, medical buildings, training areas, warehouses, hangars, helipads, roads, utilities, and associated accommodation.
Combining construction finance with long-term facilities management creates a commercial incentive to consider durability, maintenance access, replacement cycles, and energy performance during design. Decisions that reduce capital cost but increase operational expenditure remain visible to project companies that retain responsibility after completion.
That structure also requires clear performance standards. Building condition, service availability, response times, lifecycle replacement, and handback requirements need to be defined before construction so that contractors and operators understand how design choices will be measured over the concession period.
Delivering such a wide range of building types on one secure site resembles the construction of a new town or industrial estate more closely than a conventional single-building contract. Residential, healthcare, logistics, aviation, training, communications, security, and utility infrastructure must all operate within a coordinated campus plan.
Several construction fronts are likely to proceed in parallel, increasing demand for temporary roads, compounds, storage areas, welfare facilities, lifting zones, and service connections. Those shared resources will need to support individual packages without allowing delays or access restrictions in one area to disrupt the wider programme.
Security requirements will affect workforce vetting, digital information, delivery management, site photography, and access to completed or partially operational areas. As sections of the campus approach handover, construction traffic and personnel may have to be segregated from military users and sensitive installations.
The programme enters a regional market already carrying substantial civil infrastructure, energy, housing, and defence workloads. Poland’s closer engagement with the European construction industry, including its entry into FIEC, reflects the growing reliance on central and eastern European contractors as regional investment accelerates.
Labour availability, specialist subcontracting, and material supply will need to be managed across borders. Standard accommodation and infrastructure products will be required at scale, while selected systems may need enhanced security, redundancy, controlled sourcing, or blast-resistant performance.
Defence programmes also carry a higher risk of late operational change than conventional commercial development. Evolving security requirements, specialist equipment, protected communications, and user decisions can alter layouts or specifications after design has progressed.
Strong configuration control will therefore be essential across parts B and C. Changes made within one package must be assessed against campus-wide roads, utilities, security systems, information networks, and commissioning programmes before they are approved.
Merko’s decision to retain the contracting role while reducing its equity exposure balances construction opportunity with long-term capital risk. Kapitel and the lenders provide the financial capacity to activate the programme, while Merko’s continuing shareholding aligns part of its construction performance with the operation of the finished campus.
With financing completed, attention moves to mobilisation, design coordination, procurement, and workforce capacity. Meeting the 2028 completion date will require individual packages to advance rapidly without losing control of the interfaces that allow the campus to function as one secure operational environment.
