Overall growth in the Middle East region regarding new contract awards is expected to return in 2017, according to Hill International – a US project management company.
Hill International is an American based consulting firm which was founded in 1976. In 2015, it was ranked as the 7th largest construction management firm-for-free. The management company provides consulting services in sectors including claims analysis, cost and damage assessment and delay and disruption analysis.
In 2016, the company faced a decline of 66% in its second-quarter net profit – largely because of decline in fees from its project management arm in the Middle East.
Middle East slowdown
David Richter, Hill’s Chief Executive, said in a conference call with analysts, “The slowdown in the Middle East will end. It will flatten and begin to get back to some level of growth. My guess is by the fourth quarter; we will have stabilized, and we will be looking at growth in 2017 again”.
Mr. Richter added that contract awards which have been won so far in 2016 meant that the third quarter of 2016 would show better revenue results. The contract awards include the $42 million – 4 year deal alongside the Qatari building consultancy Astad and Italian consultancy Italferr to oversee construction of Qatar’s Lusail Light Rail Tram project and $79 million wins to oversee building of the new south al Mutlaa city in Kuwait.
The company announced that its joint venture with Astad had secured a $43.1 million extension to its project management contract. The joint venture oversees construction of Doha Metro’s Green Line – Hill owns 80% stake in the joint venture.
The $59m contract deal was won by the joint venture in 2012 – a four-year deal to oversee Green Line’s phase 1. Now the latest extension gives a further two and a half year to the venture for completion of Green Line project in Doha. Upon completion, it will be 22 km long, have 11 stations and capacity to handle around 140,000 trips a day.
In Oman, the conditions are a bit different. As a consequence of a slower market in Oman, the company is planning to cut its overheads in the Sultanate. Mr. Richter commented in this regard, “We have seen a significant decrease in work from Oman and especially profitability.”
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