British construction firm linked to Qatar 2022 project collapses

A crane on a Carillion construction site in central London. The UK company has entered liquidation. (Reuters)
Updated 16 January 2018

British construction firm linked to Qatar 2022 project collapses

LONDON: Construction firm Carillion collapsed on Monday in one of the UK’s biggest corporate failures, leaving the future of some of its Middle Eastern projects unclear.
The British company was involved in a number of high profile construction projects across the Gulf region, including building part of the infrastructure for Qatar 2022 World Cup.
Auditors KPMG in July identified £845 million ($1.1 billion) of contract write-downs, with some of Carillion’s problems arising from payment delays in the Middle East. In light of this, it stated in its half-year financial report 2017 that it would try to exit certain markets, including Qatar, Saudi Arabia and Egypt.
In October, City A.M. reported that Carillion was owed £200 million ($275 million) for work carried out as part of the $5.5 billion Msheireb Downtown redevelopment of central Doha. It is unclear if the debt was outstanding at the time of Carillion’s collapse on Monday.
The future of projects in the UAE and Oman is still to be clarified by the company.
Carillion’s UAE partner, Al-Futtaim Carillion — which is 51 percent owned by Al-Futtaim in a longstanding arrangement — won contracts in 2017 for a series of schemes in Dubai, including three themed districts for Expo 2020, due for delivery in mid-2019.
In Oman, Carillion has a 50-50 venture with the Zawawi family, Carillion Alawi, which in November was named the preferred bidder for the New Sultan Qaboos Hospital in Salalah. Construction was due to start later this year. Neither Al-Futtaim Carillion nor Carillion Awawi were available for comment at the time of going to press.
Carillion stated in its half-year financial report 2017 that it was to now focus on winning contracts supported by UK Export Finance (UKEF), the UK government’s foreign investment body. UKEF has already provided support to Carillion projects in the Middle East in the form of loans and guarantees on bank loans, which help an overseas buyer purchase goods or services from a UK supplier.
When asked if outstanding projects in the Middle East would be affected by the Carillion collapse, UKEF told Arab News: “For the majority of Carillion projects that UKEF has supported, construction has been completed, and finance is now being repaid by the overseas buyer; in these cases, payments will continue as agreed.”
But the UK body added that for projects where construction is yet to be completed, UKEF is “working with the parties involved to find an appropriate solution.” The UKEF spokesperson was unable to elaborate further as to how these solutions were being sought, or which contracts in particular are outstanding.
Meanwhile in the UK, the demise of the 200-year-old business poses a headache for Theresa May’s government which had employed Carillion to work on 450 projects, including the building and maintenance of hospitals, prisons, defense sites and a high-speed rail line.
The government’s priority is to ensure that public services are not disrupted, said David Lidington, the minister in charge of the Cabinet Office which oversees the running of government, Reuters reported.
Some contracts handled by Carillion would go to alternative providers, he added. Lidington urged the company’s staff to continue to work and said the government would pay their salaries.
Although the UK government has promised to support workers and ensure contracts are delivered, it has stopped short of bailing out the company as it did with major banks during the financial crisis almost a decade ago.
Accountancy firm PwC has been appointed to oversee the liquidation of Carillion; it announced in a statement that its priority “is to ensure the continuity of public services while securing the best outcome for creditors. Unless told otherwise, all employees, agents and subcontractors are being asked to continue to work as normal and they will be paid for the work they do during the liquidations.”


A homegrown UAE brand bets on date’s heritage appeal

Updated 29 February 2020

A homegrown UAE brand bets on date’s heritage appeal

  • Dates are locally sourced by The Date Room from around 20 farms in the Al Ain oasis area of Abu Dhabi
  • UAE farms grow about 475,000 tons of dates a year, a significant percentage of which is exported

DUBAI: When you can answer the classic business question about a unique selling proposition (USP) in six different ways, you likely have a successful product on your hands.

Thankfully, when you are dealing with dates, unusual product features are not a problem.

There are more than 3,000 date varieties around the world, but Emirati brand The Date Room is approaching the sticky business of breaking into an established market with just half a dozen local cultivars.

From the buttery, caramel notes of the golden Kholas date to the lower-carbohydrate Razaiz type, their flavors offer a change from the more commonly available Medjool and Deglet Noor varieties.

Being locally sourced from about 20 farms in the Al-Ain oasis area of Abu Dhabi, they are also introducing UAE residents to the nation’s heritage.

“Emirati dates are unique because they’re generally much richer in taste and texture than others on the market — although they can be smaller in size,” said Tony N. Al-Saiegh, executive director of The Date Room.

The Date Room launched with two luxury boutiques in the UAE last November after founder Ahmed Mohamed bin Salem spotted a gap for local fruit in a market dominated by produce from Saudi farms.

While official market share by origin data is not available, Saudi dates may control close to 90 percent of the UAE’s retail market.

Yet, with an annual production of 755,000 tons, Saudi Arabia trails Egypt, Iran and Algeria, all of which produce in excess of a million tons each year, according to the UN Food and Agriculture Organization.

By contrast, UAE farms grow about 475,000 tons, a significant percentage of which is exported.

Dates are among the world’s oldest cultivated crops. The palm is native to the Middle East, North Africa and South Asia, with origins that go back more than 5,000 years to what is modern-day Iraq.

The appeal of dates has grown considerably in recent years. Their high fiber and mineral profile have led to their classification as a superfood, they have been used for their high natural sugar content in healthy natural alternatives to processed candy bars.

“The Date Room’s main initial motive was the fact that our own farms produce a superior quality of date in every way,” Al-Saiegh said.

“Our families have been enjoying these dates with every meal and occasion for generations, so why not introduce it to the market in a way that makes them available to everyone but also promotes the unique culture of the UAE?”

The company’s annual production runs to about 160 tons.

For now, distribution is restricted to the UAE, but Al-Saiegh says his team is in talks with distributors in India and Indonesia.

With farmers everywhere agonizing over the impact of climate change, what are the challenges facing date farmers, accustomed as their crops are to heat and aridity?

Scientists expect 2019 to be the second-hottest year on record after 2016, and they forecast that by 2070, today’s major producers will suffer from a markedly unsuitable climate.

Despite palm trees being able to tolerate the heat for hundreds of years, Al-Saiegh says his farms are already feeling the impact.

“As the weather gets hotter and the summers get longer, it’s drying out farms and (arable) land. This means more water is required because a lack of water affects the size and texture of the fruit,” he explains.

While the full impact of those changes is some years away, the Abu Dhabi government has focused on conserving the UNESCO World Heritage oasis where the UAE’s dates are grown.

On the other hand, given the way technology has transformed the local agricultural sector with solutions such as vertical, indoor and soilless farms, Al-Saiegh may soon be able to add another distinguishing feature to The Date Room’s USP.

• This report is being published by Arab News as a partner of the Middle East Exchange, which was launched by the Mohammed bin Rashid Al Maktoum Global Initiatives and the Bill and Melinda Gates Foundation to reflect the vision of the UAE prime minister and ruler of Dubai to explore the possibility of changing the status of the Arab region.