International construction and infrastructure specialists are once again focusing on the Middle East, having pulled investment during the height of the financial crisis.
British companies keen to rebuild presence in Gulf
British construction companies behind some of Dubai's most famous landmarks are again winning orders in the Gulf.
The turnaround comes three years after the financial crisis stopped thousands of projects in their tracks.
But this time the contracts are coming from elsewhere in the region as countries such as Qatar and Saudi Arabia spend billions of dollars of oil and gas revenues on major infrastructure projects.
Carillion and WS Atkins, both listed on the London Stock Exchange, this week talked up the Middle East and lauded the number of infrastructure projects available for tender.
"It's still a very attractive place for us to do business," said Richard Adam, the finance director for Carillion. "Historically we have benefited from high margins in the Middle East in the 8 to 9 per cent bracket."
Carillion has a pipeline of potential opportunities worth £11.8 billion (Dh66.99bn) and hopes to double its revenues in the region to £1bn in the near future.
Of the potential opportunities, Carillion believes it can win one in five contracts in the region.
"Over the next three years we expect that margin to come down towards 6 per cent and it's still a very good margin for us, one of the best margins worldwide," said Mr Adam.
In the past few years, many construction and infrastructure consultants had to write down hundreds of millions of pounds on their work in Dubai and other parts of the Middle East as they tried to recover monies owed.
Many companies stopped investing in the Middle East and focused instead on their home markets.
Carillion has developed a strong presence in the Middle East over 40 years and helped design and build Dubai Marina, the Yas Island Hotel and the Grand Mosque and the Opera House in Oman.
Al-Futtaim Carillion, a joint venture between the UK company and Al-Futtaim, was awarded the contract last year to design and build the Abu Dhabi campus of New York University, due for completion in 2013.
"On the back of the Abu Dhabi plan we think we can be successful in building hospitals, industrial projects and education and transportation," said Richard Howson, the chief operating officer at Carillion. He said this year the company would report double-digit revenue growth in its Middle East markets of the UAE, Saudi Arabia, Qatar and Oman.
In a presentation to analysts this week, WS Atkins, an international engineering consultancy, said revenues grew 3 per cent to £140 million in the Middle East in its last financial year to the end of March, compared with a year earlier, and that profit margins were 16.9 per cent.
The company, which designed the Burj Al Arab Hotel, believes it can earn up to US$25bn (Dh91.83bn) in fees in the Middle East over the next five years as rising populations and improving living standards create infrastructure demand.
It is hoping to win contracts in social infrastructure, such as schools and education, rail and aviation programmes, as well as defence projects in the Middle East.
Atkins aims to diversify away from property projects to focus more on Saudi Arabia and transportation contracts.
The company helped build the Bahrain World Trade Centre and Dubai's Metro system.
Atkins' strong performance in recovering debts and a move into infrastructure work helped increase profits by 70 per cent for the Middle East operations in the year to March over the previous year.