Abu Dhabi still a growth market for UK's Carillion

Perceived problems with the Abu Dhabi construction industry are "overcooked," the top executive of a UK construction firm says

The perceived problems in Abu Dhabi's construction business are "overcooked", says the top executive of Carillion, a UK builder.

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Abu Dhabi remains a key growth market for the company, despite the recent slowdown in activity, John McDonough, the chief executive of Carillion, said in a conference call this week.

Progress is continuing on the New York University campus on Saadiyat Island, which Carillion is helping to build, Mr McDonough said.

"Our view, [the] Carillion view, is very much the worries in Abu Dhabi … are overcooked in a sense and certainly from the social infrastructure that we're targeting, the projects are in the pipeline and are moving through," he said.

Abu Dhabi's construction sector has been slowed in recent months as the Government reassesses projects. Several contractors have complained of late payments and delayed tenders.

The Tourism Development and Investment Company recently announced a change in strategy for the development of museums on Saadiyat Island. Zayed National Museum and the Guggenheim will be built after the local branch of the Louvre.

But Carillion executives say there are projects worth £12 billion (Dh69.22bn) in the pipeline in Abu Dhabi and Dubai.

"We are actively bidding for [the] same customers as we've been working with for the last four or five years," said Richard Howson, the chief operating officer. "So, we're still anticipating good growth in Dubai and Abu Dhabi."

The company also says it sees "some increase in market activity" in Dubai, where its subsidiary Al-Futtaim Carillion has a £112m contract to help build Al Jalila Children's' Hospital.

Carillion, which worked on projects in the Burj Dubai development and in Festival City, is on track to generate more than £1bn from projects in the Middle East in the next five years, the company says.

Carillion recently won a £316m contract to work on Msheireb,a regeneration development in the centre of Doha. It was the construction company's first deal from an 18-month-old partnership in Qatar.

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The company also anticipates opportunities in Saudi Arabia, where it is setting up operations.

"Compared with most of the world, this area has good growth opportunities, and we still believe we can meet our objective of doubling our revenues between 2013 and 2015 to about £1bn," Mr Howson said.

Operating margins in the region "remain strong", although the company expects declines from the 9.6 per cent level achieved last year now that contracts are "competitively tendered rather than negotiated".

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