Carillion JV wins Middle East contracts

Beleaguered support services and construction company Carillion said on Wednesday that its 50:50 joint venture with the Zawawi family - Carillion Alawi - has been selected as the preferred bidder for the design and build of the New Sultan Qaboos Hospital in Salalah, the capital city of southern Oman's Dhofar province.

The JV, for which the contract has an estimated value of £240m, has signed a letter of award with the Oman Ministry of Health.

The contract will consist of a two stage design and build process. The initial design and mobilisation phase, which will be directly funded by the customer, will begin immediately, while the second phase would start next year once the design has been completed, the contract executed and funding finalised.

A further letter of award is due to be signed shortly by Carillion Alawi, also with the Oman Ministry of Health, in respect of a hospital in Khasab. The contract is on similar terms to those for the Salalah award and, if it goes ahead, would have an estimated value of £120m to the JV.

“Both contracts are procured via lower risk procurement routes, for example through seeking support from UK Export Finance to secure project finance 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.”

At 0920 GMT, the shares were down 1.2% to 42.75p.