Carillion Alawi wins Oman's $316m Sultan Qaboos Hospital contract

The contractor, which announced its plans to exit major Middle East markets this July, is also expecting an award for a $158m hospital in Khasab from Omani officials

Carillion Alawi's portfolio includes Oman's Royal Opera House.
Carillion Alawi's portfolio includes Oman's Royal Opera House.
A contract was signed between Carillion Alawi and Oman's health ministry [image:].
A contract was signed between Carillion Alawi and Oman's health ministry [image:].

Carillion Alawi has been awarded a $316m (OMR121.6m) contract to work on Oman's Sultan Qaboos Hospital project.

The company is a 50:50 joint venture (JV) between the Zawawi family and the UK's Carillion plc, which announced its intentions to exit "major Middle East markets" earlier this year. 

READ: Carillion Alawi wins $311m PDO deal extension

In a statement on its website, Carillion said that the JV firm had signed "a letter of award with the Oman Ministry of Health as the preferred bidder [for] the design and build of the new Sultan Qaboos Hospital". 

Sultan Qaboos Hospital will span a 20ha area in Salalah, and a seven-storey building with the initial capacity for 620 beds will be developed as part of the project, ONA reported. 

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Development works for the project will be implemented in two phases, the first of which – comprising initial design and mobilisation activities – is set to commence immediately, with funding expected from "the customer".

Carillion said second-phase works would commence in 2018 once the design had been completed and funding had been finalised.

READ: Al-Futtaim Carillion chosen for $600m Expo project

A letter of award relating to a hospital in Khasab is also expected shortly between Carillion Alawi and the Omani health ministry. 

The UK contractor said the contract was "on similar terms to those for the Salalah award and, if it were to go ahead, would have an estimated value of $158m (OMR60.8m) to the JV". 

Carillion revealed that both contracts were being procured through "lower-risk" routes, which included "seeking support from UK Export Finance to secure [funding] for customers". 

"The group continues to look at ways in which it can de-risk its operations in the Middle East, working with its partners in the region to secure the future of this business," Carillion added in its statement. 

Carillion Alawi's project portfolio includes high-profile government facilities, such as the Royal Opera House (pictured) and Oman National Museum. 

This July, Carillion announced that Richard Howson had resigned as the company's chief executive officer (CEO), and that independent non-executive director, Keith Cochrane, was the firm's interim CEO. 

At the time, Carillion said that it had been hit by major project cost-overruns on several local and international projects, including one major contract in the Middle East.

READ: Carillion to exit GCC markets as CEO steps down

A press statement revealed that the company would exit Saudi Arabia's and Egypt's construction markets, as well as dispose 50% of its interest in Carillion Alawi. 

An immediate cash consideration of $16.8m was to be recorded through the disposal of its interest in the Oman business, Carillion added.  

This October, Carillion announced the appointment of Andrew Davies as CEO, with effect from 2 April, 2018, with Cochrane expected to continue as interim CEO until then. 



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