The company worked on a number of contracts with Nakheel during the property boom
WS Atkins signs on to debt offer by Nakheel
WS Atkins, the UK's biggest engineering and design company, has signed the debt payment offer from the Dubai World-owned property developer Nakheel, the company's chief executive says. The company worked on a number of contracts with Nakheel during the property boom, including the design of the Trump International Hotel and Tower, construction on which stalled in late 2008. Pre-tax profit at WS Atkins slipped 5.9 per cent last year to £96.6 million (Dh521.3m) from £102.7m in the previous year, although its Middle East projects rose to 57 per cent of its order book from 53 per cent in 2008, the company said.
Citing confidentiality, Keith Clarke, the chief executive of WS Atkins, would not disclose whether the firm had received payments from Nakheel, but he said "an agreement is in place". "We were one of the early signers," he added. "We have a long-term relationship with them and will continue to work with them when their market returns. You won't see us writing off an additional provision. We're very conservative about the way we take profit."
Halcrow, another major UK consultancy, said this month it was "on the brink" of signing Nakheel's offer to pay trade creditors 40 per cent of their agreed claims in cash and 60 per cent in the form of a publicly tradable security with an annual return of 10 per cent. Mr Clarke said the company was "still trading within its normal range" when it came to collecting payments for its work on the Dubai Metro project.
WS Atkins designed the Metro's Red Line, which opened last September, and is still involved with the Green Line. "It's a very successful contract and we continue to work on it," Mr Clarke said. WS Atkins is among the scores of UK consultants that have shed staff or moved them to more resilient markets in the region as the financial downturn gripped Dubai's construction sector. The company has shed 1,433 jobs across its Middle East network, reducing its staff total to 1,867 compared with 3,300 at the end of 2008.
Still, Mr Clarke said the company was continuing to hire as it enhanced its expertise in particular areas including green building. While other UK construction consultants such as Mouchel are planning to sell their Middle East business because of the downturn, Mr Clarke says WS Atkins is "in the market for the long term". Revenues from the region have been buoyed by the company's diversification into sectors such as water and energy.
In January, it signed a contract with Al Ain Municipality for the creation of an environment, health and safety department for the building sector. It is also doing railway work in Saudi Arabia. "There's no easy boom market in the Middle East," Mr Clarke said. "People talk it up but it's a market you really always have had to perform in. "We've always considered it a place to trade long term. I don't think it's a market you can run to in order to save the company."