Govt may let IRs open in stages

Source : Straits Times - 18 Nov 2008

But operators must fulfil obligations; no change in their projected benefits to job scene, economy
THE Government is considering requests by both integrated resort (IR) operators for their openings to be made in stages, Senior Minister of State for Trade and Industry S. Iswaran told the House yesterday. Both operators will also be held to fulfilling their obligations as outlined when their bids for the projects in Sentosa and Marina Bay were submitted, he said. He added that the Government does not expect any change in the contribution that both projects will have towards the economy and job scene here.

Mr Iswaran was responding to questions from Non-Constituency MP Sylvia Lim and Nominated MP Eunice Olsen on when the IRs will fully open and whether the global financial crisis will have any impact on their ability to operate.

The recent financial crisis and the resulting credit crunch have affected several United States-based companies, including Las Vegas Sands, whose Marina Bay project here is slated to fully open next year.

Mr Iswaran noted that not only had the casino operator raised an additional US$2 billion (S$3 billion) in capital, but also its chairman and chief executive officer Sheldon Adelson had made a public declaration of his commitment to the Singapore project.

Although Sands had promised to complete the entire development by the end of next year, it has since submitted a proposal for progressive opening instead. This is now being considered by the Singapore Tourism Board and other agencies involved.

Mr Iswaran said that Resorts World at Sentosa, which is scheduled to open in 2010, also applied for a progressive opening, and this is being reviewed too. But he assured the House: ‘Even as we do so, our expectations remain that each development will open as an integrated resort and not just as a stand-alone casino.’

There will also be terms and conditions which the operators must abide by should their requests be approved, he added. Although a company’s financial capability and its ability to get credit were a factor in determining the award of the projects when the IR bids were first sought, Mr Iswaran reminded the House that ‘we are now in profoundly altered circumstances’. Still, he said both companies have assured the Government that their financing has been secured.

Mr Iswaran had already made it clear last week that the Government will not step in to bail out the IRs should their parent companies go under.But when asked yesterday if Singapore investment company Temasek Holdings will step in, he said: ‘I think that’s a question for Temasek. It’s a commercial company - they make their own decisions.’

Ms Olsen also queried him on whether the Government had relaxed its ruling on the gaming area restriction in allowing Marina Bay Sands to have 1,000 gaming tables instead of the 600 that were originally proposed. Mr Iswaran refuted any suggestion of a government concession.
The restriction has always been on the floor area for the casino - which has to be less than 3 per cent of the entire resort, he stressed. And that requirement remains unchanged. In response to Ms Lim and Ms Olsen’s questions on the benefits that Singapore stands to gain from both projects, Mr Iswaran said that the Trade and Industry Ministry is standing by its projections ‘for now’.

These projections are that there will be 20,000 jobs generated directly by the IRs, and a further 30,000 to 40,000 jobs created indirectly by their operations here. Projections that the IRs will contribute $5.4 billion to the economy were based on the projects being in a ’steady state’ in 2015 after they have been fully developed and open, he said. But Mr Iswaran added that whether that can be achieved in 2015 is something that the ministry will have to ’study and see’.