Merko Ehitus                  NEWS RELEASE                      02/25/2004



CO-OPERATION AGREEMENT



On February 23, 2004 SIA Merks, the Latvian subsidiary of AS Merko Ehitus,

signed a co-operation agreement with the owners of SIA Multihalle the aim

of which is to conduct necessary research and actions regarding the

possibilities of building a multifunctional hall in the Skanstes Street

region of Riga by March 31, 2004.

SIA MERKS is obliged to analyze the drafted project documentation and

explore financing possibilities, and together with the owners of SIA

Multihalle conduct negotiations with the city of Riga regarding the use

of the land rented and reserved for SIA Multihalle.

The estimated total price of the multifunctional hall project in the

agreement is 26 million euros, and the estimated completion time for the

building works is September 1, 2005.





Marko Pern

Financist

+372 6 805 130