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Carillion to target PPPs for oil-hit Middle East

CEO Richard Howson said the UK contracting firm will focus on winning new business in the region, where it has already inked an MOU to develop a PPP health project in Oman

Carillion will target PPPs as it looks to expand its Middle East operations. [Representational image]
Carillion will target PPPs as it looks to expand its Middle East operations. [Representational image]

The CEO of contractor Carillion has said the company's will focus on winning new projects in the Middle East this year. 

Richard Howson the contractor's focus will include the UAE in light of Expo 2020, Arabian Business reported.

In a statement, Carillion said its Middle East construction services business is performing in line with its full-year expectations for revenue and margin.

"First-half revenue is expected to be slightly lower than in the first half of 2015, with the underlying operating margin also lower," the statement continued. 

Carillion attributed this to a $18.1m (£14m) contribution to profit in H1 2015, driven by a one-off reorganisation of its staff accommodation facilities in Oman, which will not be repeated in 2016. 

"To mitigate the impact of this and of the prolonged low oil price on the pace of customer investment programmes in the full year, we continue to pursue our disciplined strategy of strict contract selectivity with a strong focus on winning contracts with the support of UK Export Finance (UKEF)," the statement continued.

"Over the medium term, we are also pursuing public-private partnership (PPP) opportunities, notably in Oman, where we have signed a Memorandum of Understanding (MOU) with the Oman Investment Fund to develop a PPP programme in the health sector." 

Howson also remarked on how the UK referendum (Brexit) might impact Carillion's global operations. 

He said Carillion had cut back its exposure to Britain's construction market since 2009 and had "very deliberately" controlled the size of UK residential work it had bid for in recent months.

"We are very happy today with the action we took in 2009/10 to half the size of our construction business in the UK," he continued, according to Arabian Business.

"That decision was absolutely [right], and has enabled us to limit the exposure to the residential market." 

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Construction Week - Issue 747
Aug 03, 2019