Contractor Carillion has signed an agreement with Oman’s sovereign wealth fund that could see the pair developing a number of hospital projects together across the Sultanate.
In a note accompanying its full-year accounts for 2015, Carillion said there was “growing interest in private finance” across the Arabian Gulf.
“We have signed a memorandum of understanding with the Oman Investment Fund, a sovereign wealth fund of the Sultanate of Oman, to develop opportunities for Public Private Partnership projects in the healthcare sector, using our experience as a global market leader in this form of project finance,” the company said.
Carillion operates in a number of GCC states through joint ventures such as Al Futtaim Carillion in the UAE and Carillion Alawi in Oman. The company declared a 20 per cent increase in revenue during 2015 to £601.6m (Dh3.1 billion), but its operating profit only nudged up by 1 per cent to £25.3m as margins came under pressure as a result of “highly competitive” markets.
It expects margins to be lower still in 2016, and said it is looking to mitigate the impact on lower government spending as a result of falling oil prices by targeting projects where it can bring in funding through the UK Export Finance scheme, or through PPP schemes.
Major new and probable orders landed in 2015 totalled £500m, including phase 1A5 of the new Dubai Trade Centre District and becoming preferred bidder to deliver new offices for Sharjah waste management firm Bee’ah. It has identified a potential future pipeline of work worth £16bn.
“In Dubai, we continue to see growing investment in the commercial, hotel and leisure markets in support of Dubai’s role as host to Expo 2020,” the company said.
Last week, competitor Interserve revealed that revenues for the international portion of its contracting business, which mainly operates through joint ventures in the UAE, Qatar and Oman, reported a 20 per cent increase in operating profit to £13m as revenue jumped 34 per cent to £279m.
The company highlighted several contract wins in Qatar, where it operates as Gulf Contracting, and in the UAE, where it is a partner in Khansaheb Civil Engineering. It is working on the new Dubai-Abu Dhabi Highway, Dubai Opera House and Saadiyat Beach Resort.
Oman’s government is being advised on the introduction of its new public-private partnerships law by Squire Patton Boggs. Partner Ed Johnson recently told The National that the legislation should be in place by this summer.
He said that although Oman’s government hadn’t yet identitifed individual PPP projects, “the expectaction is that their prirority will be in the social infrastructure sector area”.
“They’re looking at ways to develop islands and various other [projects] as tourism PPPs. That might be the most useful way for PPP to go - as a way of delivering social infrastructure rather than another means for financing power projects,” he said.
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