Genting says S’pore IR costs under control

Source : Business Times - 21 May 2008

Malaysian casino operator Genting does not expect further cost over-runs for the integrated resort (IR) it is building on Singapore’s resort island of Sentosa, the company’s chief executive said on Wednesday.

Resorts World at Sentosa, a wholly owned unit of the Singapore-listed arm, Genting International, is building the IR at a cost of up to $6 billion (US$4.4 billion), about $800 million, or 15 per cent, above its initial budget, due mainly to higher construction expenses.

‘At this point, we are staying at $6 billion. Concerns about cost over-runs for the project are unsubstantiated,’ Lim Kok Thay, Genting’s chairman and CEO, said on the sidelines of a tech conference.

‘Costs are under control despite high oil prices,’ he added.

Genting unveiled the higher price tag for the casino project last November and said it would cover the additional expenses through project financing at the resort level.

The raised budget covers the cost of six new attractions as well as improvements to transportation and access infrastructure, with higher building costs accounting for half of the increase.

Mr Lim said there was no need to raise any more funds for the project.

‘The recent financing we announced has catered for the increase in construction costs. All the financing are in place, there is no need for further financing,’ he said.

In April, Resorts World at Sentosa said it had obtained a $4 billion syndicated loan to fund the IR project.

In December last year, Genting International and sister company Star Cruises won the right to build and operate Singapore’s second IR resort.

The 49-hectare project will include a Universal Studios theme park, a giant oceanarium with 700,000 aquatic creatures, and six hotels with more than 1,800 rooms. The resort is scheduled to be completed in 2010.

Singapore’s first IR site, a 20.6-hectare piece of waterfront land at Marina Bay near the financial district, was awarded to Las Vegas Sands in May 2006.

The republic legalised casino gaming in 2005 as part of its ambitious plans to double visitor arrivals to 17 million by 2015. — REUTERS