Howson believes it will ‘allowed the government to take forward more schemes’
Carillion’s chief executive elect Richard Howson said he is “optimistic” about the future of the PFI market, despite continuing political pressure on the government to abandon the controversial procurement method.
Chief operating officer Howson, who will take over as chief executive from John McDonagh in the new year, said the firm was “eagerly expecting news at the end of November” on a “son of PFI” scheme from the government.
“We’re optimistic it will be a mechanism that will allow the government to take forward more schemes, but quite how it will change we wait to see,” he said.
Speaking after the publication of Carillion’s interim management statement, Howson also called on government to stick to its procurement timetable on major schemes in order to help the construction economy.
In the statement the firm said it had signed £670m of contracts since it announced half year results six weeks ago and was on course to meet analysts’ profit expectations, and would reduce its debt levels faster than anticipated. This was despite a continuing “challenging” environment.
Howson added that margins on work in the Middle East would drop from 7-8% to nearer 6% over the next three years as clients moved toward competitive tendering.
It said its full year results will show “strong earnings growth”, primarily from the acquisition of Carillion Energy Services, formerly known as Eaga. It is on course to downsize its UK construction business by a third by 2013.