Property News · May 3, 2016

PwC buys construction claims firm as disputes rise in GCC


Big Four accountancy firm PwC has bought a Middle East consultancy that specialises in construction disputes.PwC has acquired HLP Consulting – a 24-strong practice with offices in Dubai, Abu Dhabi and Qatar serving the entire GCC market.HLP had been set up by former members of UK-based Trett Consulting in 2010. It was led by directors Mike Harding, Simon Lowe, Alastair Gray and Shaun Crawley, who all joined PwC this week.John Wilkinson, a senior partner in PwC’s Middle East Forensic Services business, said that it had been building its capital projects team in the Middle East for about five years, which provides with feasibility studies and can help with the financial aspect of project overruns, but often relied on other parts of its network for technical expertise.He said that the HLP Consulting deal would bring this regional technical knowledge, as well as a core claims consultancy business that advises on legal disputes.”With the declining oil price, everybody is looking at value from their projects. Projects are being put on hold for a period of time, some are being cancelled completely when obligations are entered into, and some are being continued but with more constrained finances around them. “All of those factors are leading to an increase in, if not disputes, then the potential for disputes. It had been relatively benign, but in a market which is undertaking as much infrastructure spend as the Middle East, there will always be a decent element of that type of business. As things get a little more constrained, the numbers of projects that are impacted increases.”Claims within the region can often take years to settle. Contractor Arabtec recently confirmed to The National that it is to recommence a Dh1.4 billion claim against Meydan after previously agreeing to try to find an amicable solution three years ago to a dispute that originally began in 2008 when its joint venture was removed from the project to build Meydan racecourse. Meanwhile, fit-out contractor Depa’s finance director Umar Saleem has said that he expects its long-running, Dh900 million dispute with New Doha International Airport (NDIA) to reach a conclusion early next year. “We have the next hearing in November and we expect the award some time early next year,” he said. Depa and its joint venture partner Lindner were removed from a project to fit out 17 lounges at NDIA in June 2012 and its project bonds were cashed, citing a lack of performance. The joint venture filed a claim against NDIA in September 2013, stating that its removal had been due to its unwillingness to accept less favourable contract terms. Both sides had threatened legal action, but Depa has said it has not been issued with a claim from NDIA.Mr Saleem said that it had already written down the full value of its contract with NDIA, so any compensation it receives from the claim will go straight to its bottom line. Mr Saleem said that more contract provisions, goodwill writedowns and other non-cash items were behind Depa filing a Dh265.5m loss it has just posted for 2015 compared to a Dh43.5m profit a year earlier. Turnover was 15 per cent lower at Dh1.64bn from Dh1.94bn.The provisions mainly related to unpaid bills in its Middle East contracting business.”We’ve just brought in a new CEO and we didn’t want to go into 2016 and beyond with all of these legacy provisions on old receivables in markets where we’ve decided not to operate any more like Egypt, Morocco [and] Jordan,” he said.mfahy@thenational.aeFollow The National’s Business section on Twitter

Source : thenational.ae
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