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Qatar developer disputes Carillion payment claims

A Qatari developer has rejected claims made by former Carillion boss Richard Howson that it owed the failed company £200m, saying it was Carillion that was unable to pay its suppliers.

According to reports, Msheireb Properties – the company behind the $5.5bn Doha Downtown project – has said it continued to pay Carillion throughout construction and it was the now-defunct contractor that owed more than 40 subcontractors money on the scheme.

Speaking to MPs at a parliamentary inquiry into Carillion on Tuesday, ex-CEO Mr Howson alleged that Msheireb withheld £200m in payments from Carillion over an 18-month period and that this was a significant factor in the company’s collapse.

However, Msheireb has disputed the claims and questioned Carillion’s record in paying subcontractors on the scheme.

A Msheireb spokesman told the Guardian: “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.”

In 2011, Carillion signed a £395m deal to build the Msheireb Downtown Doha project for Msheireb Properties, a subsidiary of the Qatar Foundation for Education, Science and Community Development.

Speaking to MPs on Tuesday, Mr Howson said: “We only won, thankfully, one construction project in Qatar, which was Msheireb in 2011. 

“They would have owed us £200m [when I left the firm].”

He also added he often felt like “a bailiff” trying to retrieve money from his Qatari client and visited the Middle East state once a month for the past six years in an attempt to recover cash.

Msheireb’s comments came as the government revealed it had set aside £150m to finance the liquidation of Carillion.

Cabinet Office minister David Lidington confirmed that the Treasury would provide £150m to cover the costs of maintaining public services and legal fees.

The minister also said the government would be looking to retrieve some of the money spent by the government from contract holders.

A Cabinet spokeswoman said: “With these funds, the government is underwriting the official receiver to ensure the smooth continuation of essential public services following the liquidation of Carillion.

“The official receiver will be seeking to recoup costs for services from contract holders.”

Construction News has contacted Msheireb Properties.

 

Readers' comments (2)

  • What is so surprising is how and why the accounts audit/s failed so easily? I thought it was illegal for Directors to continue to trade if they felt they should not/could not.. So, how on earth they kept going for so long?

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  • All lies told to bunch of MP that are not able to understand the complexities of contract works
    They should be faces charges !!

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