Former chief executive blamed a £200m bill in Qatar for sending the firm under
Carillion’s Qatari arm has entered liquidation.
Carillion (Qatar) LLC was the company responsible for redeveloping downtown Doha ahead of the 2022 World Cup, a contract awarded to the defunct contractor by Msheireb Properties in 2011.
Ahmed Tawfik Nassim, a partner in the Doha office of the Paris-based accountant Mazars, is handling the liquidation, which is being managed completely separately from the main liquidation. The Official Receiver will have no role in the liquidation process.
The collapsed contractor’s work in Qatar has been a major topic of discussion following its implosion, with former boss Richard Howson saying the firm was owed £200m by Msheireb for the work in Qatar and labelling it as one of the biggest reasons why the firm went bust.
He said the contract remained unpaid for 18 months with Carillion owed £200m at the time of its collapse.
Howson told MPs when giving evidence to the Carillion inquiry in February: “The customers changed the architect three times. They issued 40,000 new drawings within eight months. It’s been a very difficult contract.”
Howson said he visited the project in Qatar at least 60 times in the past six years in order to collect cash.
“I felt like a bailiff,” Howson said. “Working in the Middle East is very different to working anywhere else. On the Qatar contract, because of the size of the contract, they hold performance bonds which are on demand. If you wilfully abandon they will pull the bonds even though they haven’t paid.
“The only way to ensure that you are paid reasonably in the Gulf is through personal relationships with your customers. There is no point writing nasty letters, no point appointing lawyers, it’s about being there and the give and take of delivery and receiving cash.”
Work on the job was due to be completed last May but Howson said it would not be completed until the end of this year.
The spokesperson said: “Despite ongoing project delay, Msheireb Properties continued to pay Carillion; however, Carillion did not pass these funds on to its supply chain, leaving over 40 subcontractors unpaid.
“This resulted in Msheireb Properties absorbing significant additional costs as we were forced to pay Carillion’s supply chain directly and engage a third-party contractor to ensure that Carillion’s original project was delivered.”
Msheireb then sent a letter to the MPs running the inquiry, which showed the depth of the dispute over the £200m.
The developer told MPs it “entirely disputes” Howson’s claims and that he was “misleadingly” referring to “the value of construction work remaining to be completed” as well as “the value of claims relating to further delays”.
Msheireb said Carillion actually owed it “a similar amount of money”, including “good faith overpayments” made “to assist Carillion” and direct payments Msheireb made to subcontractors who Carillion had not paid.
After receiving the letter, MPs labelled Carillion’s directors as “fantasists” who had come up with a “litany of excuses”.