x Abu Dhabi, UAEThursday 27 July 2017

US firm with big presence in UAE looks to buy

CH2M Hill, the consultant behind projects like Masdar City and the nuclear programme, hopes buying out a design firm will help it win more Gulf contracts.

CH2M Hill, the consultancy behind Masdar City and the Abu Dhabi nuclear programme, hopes that buying a London engineering company will help it to weather any further economic downturns.

The consultancy, based in Denver, Colorado, plans to spend £230 million (Dh1.34 billion) to buy Halcrow and take on its debts in a deal expected to be finalised next month.

The US company believes the acquisition will offer it a better reach outside of its home base, particularly as global spending in the nuclear sector is forecast to decrease.

"The economic downturn has affected the whole globe, it has caused some sectors to streamline," said Omur Akay, CH2M's regional managing director.

"When you have a diversifed portfolio like we do in CH2M Hill, you are affected by those changes to a lesser degree." The company hopes to tap into a wide range of projects from property developments to solar panel manufacturing, said Mr Akay.

CH2M Hill is in the running for the contract to oversee the construction for the 2022 Fifa World Cup in Qatar, and Mr Akay said it was also eyeing the Abu Dhabi airport expansion and Saudi Arabia's plans for a nuclear programme.

The busy Gulf market contrasts with a more sombre global backdrop. Engineering companies have come under pressure to consolidate as public infrastructure projects are put on hold or even cancelled.

CH2M Hill specialises in long-term projects such as the UAE's US$20bn (Dh73.46bn) nuclear programme and was involved in the master planning for Masdar City, the planned carbon neutral development on the edge of the capital.

Last year Masdar, the Abu Dhabi Government's clean energy company that is in charge of the city, pushed back the completion date by up to nine years and cut $6bn from its budget.

"The development dates and progress has been rescheduled as we go along, but other than that I don't think any of the fundamentals have changed," said Mr Akay. "It may take longer to develop the whole city, but the principles of the vision are still there."

The Middle East brings in about $400m in turnover for the US company, with about 40 per cent of that coming from the UAE.

Halcrow's presence in the UAE dates from 1961, when it created the city plan for Abu Dhabi. The British company created the infrastructure plan for Yas Island.

 

ayee@thenational.ae