Carillion gave UK government early warning of Qatar payment problems

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Carillion, the British contractor that went bust in January with around £1.5 billion of debt, asked for the help of the British government 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, said that he had written to Liam Fox, the minister for international trade, in May last year, telling him of problems in the Middle East.

Carillion blamed a £200 million unpaid bill by a Qatar contractor as one of the main reasons for its collapse. Carillion was a contractor with a Qatar government partner on a $5.5 billion development in Doha.

The company has said that £314 million of the £845 million “black hole” revealed last July came from the Middle East. Howson said that he had briefed Fox on the “increasingly difficult situation” in Qatar in order to get his help “on turning receivables into cash on those countries.”

Philip Green, former chairman of Carillion, said that the reason for the collapse was the fact that its “balance sheet was not able to withstand the shock from four contacts that went badly wrong in 2017. The balance did not have the robustness to withstand it.”

Carillion was also owed significant sums of money 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 that he “felt like a bailiff” on his monthly trips to Qatar to try to recover owed money.

The contract at the center of the dispute is Downtown Doha, a $5.5 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 chairperson.

The project has been reported to be a part of the Qatar preparations for the 2022 Fifa World Cup bid, but it was launched before December 2010 when the country was awarded the rights to run the biggest football competition in the world.

Carillion was brought on board in late 2011 for one of the earlier phases of the project. Msheireb has denied the allegations that it refused to pay Carillion for the project, and claimed that money paid to the UK group was used to settle 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 Qatar, I believe Carillion would have survived.”

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