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Monday, 25 September 2017

Carillion considering withdrawing from Education Ministry’s PPP schools project

Carillion is reportedly considering withdrawing from an Education Ministry tender to build 200 schools under a PPP framework because of “increased risk” in the project, sources from within the company tell Al Borsa. The sources also claim the Education Ministry has plans to establish its own schools with lower tuition fees next to those that will be built by the private sector, which would negatively affect the private-sector institutions. Carillion had been shortlisted for the project back in May, alongside Orascom Construction, Al Madaen Holding, BPE Partners, and a consortium led by the UK’s Bridge Capital. BPE Partners also decided to back out of the project last month after feasibility studies showed that the project would not be in line with the company’s strategy.

To be fair to the Education Ministry: There may be more at play in the Carillion news. The Financial Times reported yesterday that the company is in a “fight for its survival” and may sell overseas arms. The company is “in talks with a host of Middle Eastern construction companies to sell a chunk of its overseas business as it embarks on a radical cost-cutting and disposal plan.”

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