Business | Investment
UK firm to invest Dh11.7b in Gulf
UK services and construction group Carillion has plans to invest about £2 billion (Dh11.7 billion) in projects in the GCC region.
- By Suzanne Fenton, Staff Reporter
- Published: 23:22 November 6, 2008
Dubai: UK services and construction group Carillion has plans to invest about £2 billion (Dh11.7 billion) in projects in the GCC region.
"We have probable order books of around £2 billion, so the market is very strong here and Oman and Abu Dhabi," John McDonough, chief executive of Carillion, said.
This £2 billion includes the £600 million already invested in finalised agreements.
Carillion yesterday announced it is on track to double its revenues to more than Dh6 billion by the end of next year.
Carillion currently has global order books totalling £20 billion and the Middle East generates around 20 per cent of its profitability.
Services sector
Of their 55,000 staff worldwide, about 25,000 are in this region.
McDonough estimated that around 20 per cent of profitability comes from public and private partnerships, while only 10 per cent is contributed by the UK's construction sector.
"As you can see, this is a rather small part of our total profitability," McDonough said.
However, about half of Carillion's profitability stems from the services sector, which has grown at an 11 per cent compounded interest rate.
McDonough was also part of the senior business delegation travelling with British prime minister Gordon Brown during his regional tour this week, which included Saudi Arabia, Qatar, Abu Dhabi and Dubai.
"This region is not in a bubble from the rest of the world. The credit crunch and lack of liquidity will affect some private developers' work," McDonough said.
Although regional governments have stressed the importance of infrastructure investments being maintained, there may be a slowing of the residential sector.
"There will be a continuation of investments for valid economic reasons," McDonough added.
Through their joint venture, Al Futtaim-Carillion in the UAE, about £600 million in investments has already been finalised.
Carillion signed a Dh1.5 billion contract with Aldar in June for the £250 million racetrack hotel on Yas Island in Abu Dhabi, which will be ready for the Formula One race on November 15, 2009.
New agreements
New agreements signed during the week include a Dh3 billion contract to build the Al Muneera phase of Aldar's Dh60 billion Al Raha Beach development.
Al Futtaim-Carillion will also be involved in the German Business Park, expected to be worth more than Dh600 million and completed in less than two years. "The prime minister's visit helped finalise the deals so it was very successful from my point of view," chief executive of Carillion said.
The UK secretary of state for business Lord Peter Mandelson said during the prime minister's visit that the UK and the Gulf have a long-established business relationship.
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