LONDON: Carillion Group, the British contractor that went bust in January with debts of around £1.5 billion ($2.09 billion), asked for British government assistance to get overdue payments from Qatar in spring 2017, before its financial problems became public.
In evidence to Members of Parliament (MPs), Richard Howson, the former chief executive, revealed that he wrote to Liam Fox, the minister for international trade, last May, warning him of the problem.
A copy of that letter, seen by Arab News, said that unpaid debts on a flagship project in Doha with Msheireb Properties, a Qatar government-owned entity, had become a serious issue for the British company.
“The position on that project has deteriorated significantly, and despite continued efforts to engage with Msheireb and its advisers at the highest levels, we find ourselves in a position of having to request the assistance of HM government to help the current impasse, which is having a significant financial burden on our business both regionally and for the Carillion Group as a whole,” the letter said.
Carillion has cited the £200 million owed by Msheireb as one of the main factors in its collapse.
“We remain committed to completion of the project, but the lack of payment since October 2016 and the employer’s (Msheireb) recent proposal to introduce a third party contractor to assist in completing the works at significant cost is significantly hampering our ability to do so,” the letter continued, asking what support Carillion might expect from the British government in getting the debts repaid.
The letter also referred to an April meeting between Carillion executives and Fox in the British ambassador’s residence in Muscat, where unpaid debts from Oman were discussed.
It has not been made public how much Oman owed Carillion, but the company has said that £314 million of the £845 million “black hole” revealed last July came from the Middle East.
Howson told the MPs that he had briefed Fox on the “increasingly difficult situation” in Oman and Qatar in order to get his help “on turning receivables into cash on those countries.”
Philip Green, former chairman of Carillion, said the collapse happened because the “balance sheet was not able to withstand the shock from four contacts that went badly wrong in 2017. The balance sheet did not have the robustness to withstand it.”
Carillion was also owed significant sums on three infrastructure projects in the UK.
Keith Cochrane, another former chief executive, said that the Qatar project was “a very specific contractual situation. We thought that the government and the former ambassador would help us get a hearing on that matter.”
Howson has previously told MPs he “felt like a bailiff” on his monthly trips to Qatar to try to recover money.
The contract at the center of the dispute is Downtown Doha, a $5.5 billion (SR20.62 billion) project to develop a central area of the city. The developer is Msheireb Properties, a subsidiary of Qatar Foundation, which describes itself as a “private, non-profit organization,” with Sheikha Moza Bint Nasser as its chair.
The project has been reported to be part of Qatar’s preparations for the 2022 Fifa World Cup bid, but it was launched before the country was awarded the rights to run the biggest football competition in the world, in December 2010.
Carillion was brought on board in late 2011 for one of the early phases of the project.
Msheireb has denied that it refused to pay Carillion for work on the project, which is now almost complete, and claimed that money paid to the UK group was used to pay other bills.
The Carillion executives were being questioned by members of Parliament on a joint committee overseeing public accounts and administration.
Howson previously told a different committee: “But for a few very challenging contracts, predominantly in Oman and one in Qatar, I believe Carillion would have survived.”
Msheireb in Doha did not answer a phone call seeking comment.
Carillion asked UK government to step in over Qatar debt black hole
Carillion asked UK government to step in over Qatar debt black hole
UAE’s residential real estate market to see softer home sales
- Moody’s sees mild softening of prices over the next 12 - 8 months as rising completions add supply
RIYADH: The UAE’s residential real estate market is expected to see a modest decline in developer sales and a mild softening of prices over the next 12 to 18 months as rising completions add supply, Moody’s said.
Despite near-term easing, the credit ratings agency noted that developers are supported by strong revenue backlogs and solid financial positions, while regulatory measures have reduced banks’ exposure to the construction and property sectors, helping to preserve robust solvency and liquidity buffers across the financial system.
The broader trend is reflected in the UAE’s real estate market, which recorded a strong performance during the first three quarters of 2025, according to Markaz.
In Dubai, transaction values increased 28.3 percent year on year to 554.1 billion Emirati dirhams ($150.88 billion), while Abu Dhabi recorded total sales of 58 billion dirhams, up 75.8 percent year on year. The number of transactions in Abu Dhabi rose 42.3 percent to 15,800.
The report said: “After five years of extraordinary growth in the UAE’s residential real estate market, particularly in Dubai, we expect developer sales to decline modestly and some price softening over the next 12 to 18 months as rising completions add supply.
“From 2026 to 2028, around 180,000 new units will be completed in Dubai, a significant increase from prior years that is likely to weigh on demand and slow price growth.
“However, fundamentals remain supportive, underpinned by continued population growth and an influx of high-net-worth individuals. Rated developers’ credit quality will remain resilient, supported by strong revenue backlogs, front-loaded payment plans and solid financial positions.”
Munir Al-Daraawi, founder and CEO of Dubai-based Orla Properties, told Arab News the Moody’s report underscores what the firm is seeing on the ground, namely “a market that is successfully transitioning from a period of extraordinary growth to one of sustainable stability.”
He added: “While a mild softening of prices and a modest decline in sales are anticipated over the next 12 to 18 months, these are natural adjustments for a maturing global hub like Dubai.”
Al-Daraawi believes the the projected delivery of 180,000 units between 2026 and 2028 is not a cause for concern, but “a reflection of the UAE’s long-term appeal to high-net-worth individuals and a growing population.”
The CEO added: “The report rightly points out that fundamentals remain supportive, underpinned by Dubai’s 2040 Urban Master Plan and a significant influx of global talent.”
He went on to note that the resilience of the sector is further bolstered by the solid financial positions of developers and the strong regulatory measures that have shielded the banking sector from excessive exposure.
“This creates a robust ecosystem where credit quality remains high, even as we navigate a more competitive landscape. For boutique and luxury-focused developers, the current environment emphasizes the importance of quality, execution, and strategic capital allocation — factors that will continue to define the UAE’s real estate success story,” said Al-Daraawi.
The current environment emphasizes the importance of quality, execution, and strategic capital allocation.
Munir Al-Daraawi, Founder and CEO of Orla Properties
Riad Gohar, co-founder and CEO of BlackOak Real Estate, told Arab News that while Moody’s is correct to say that supply is rising, the conclusion of a broad slowdown ignores the structure of this current economic cycle.
He added: “First, this is not a debt-fueled market. Around 83 percent of Dubai residential transactions in 2024 and 2025 were non-mortgaged. That means the market is equity-driven, not credit-driven. When cycles are not built on leverage, corrections are typically shallow and segmented, not systemic. “
He added that the macroeconomic backdrop is stronger than in past cycles, driven by sustained non-oil gross domestic product increase, structural reforms, population growth, and capital inflows aligned with long-term national plans.
“Demand is not purely speculative; it is driven by migration, business formation, and wealth relocation,” the CEO said.
“Third, prime vs. non-prime must be separated. Any pressure from increased completions is more likely to affect marginal locations, not established prime areas supported by global HNWI inflows. Historically, prime assets in Dubai have shown resilience even during broader market pauses,” Gohar added.
He continued to clarify that for smaller developers, some may feel margin compression if sales moderate, but this becomes a consolidation phase, not a systemic risk.
“Banks’ real estate exposure has already declined to around 12 percent of total loans — from 19 percent in 2021 — and NPLs (non-performing loans) are low at 2.9 percent, meaning financial contagion risk is limited. Regulatory escrow structures and stricter oversight further reduce spillover,” the CEO said.
“We are in a capital-rich, cash-driven cycle, regulated market with strong GDP and population growth. If anything, weaker fringe players exiting would strengthen the core not destabilize it,” he said.
The Moody’s report highlighted that while most developers it rates will generate “substantial excess cash” over the next two to three years, there will be fewer opportunities to make significant investments, especially within the Dubai real estate market.
As well as prompting a shift toward corporate governance and, in particular, how developers deploy their rising liquidity, some firms are looking to diversify beyond their core business models.
“For instance, Binghatti has recently launched its first master-planned villa community, marking a departure from its historical focus on single-plot high-rise developments, as demand for villas continues to outperform that for apartments,” said the report.
It continued: “Others are looking beyond Dubai and the UAE for growth, whether through geographic diversification or expansion into unrelated sectors.
“For example, Damac’s owner, Hussain Sajwani, has announced significant planned investments in data center development across the US and Europe.
“Emaar continues to develop actively in Egypt and India and is evaluating potential entry into China and the US. Aldar has started development projects in the UK and Egypt, while Arada has begun building in Australia and the UK and Sobha is expanding into the US.”
