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  Business Times 7 Nov 07
Cost of building Sentosa IR may climb to $6b
Resorts World factors in rising construction costs, new attractions, improved designs
By Uma Shankari

Channel NewsAsia 6 Nov 07
Resorts World at Sentosa adds new attractions

Today Online 7 Nov 07
ET joins Sentosa IR fun
Developer ups budget by $550m to provide more theme park offerings and cover higher constructions costs
Sheralyn Tay

Straits Times 7 Nov 07
Sentosa IR to cost $800m more, says Genting
Higher construction and labour costs and new attractions will bring the bill to $6b
By Arti Mulchand

Business Times 24 Oct 07
Genting seeking $3.2b loan for Sentosa resort

GENTING International plc, a unit of Asia's biggest casino operator by market value, is seeking to borrow a record S$3.2 billion to fund a casino resort in Singapore, three people with knowledge of the transaction said.

The overseas unit of Kuala Lumpur-based Genting Bhd is adding to S$2.17 billion raised in a rights offer in August, and S$450 million of convertible bonds it sold in April to partly fund the resort.

Genting International's loan will push lending to Asia's casino industry to about US$9.1 billion, more than double the total for last year, according to data compiled by Bloomberg. Lending to the region's industry is set to grow as countries including Japan consider joining Singapore in lifting bans on casinos.

'There are quite a few countries in Asia where gambling is banned,' said Harsh Agarwal, a credit analyst with Lehman Brothers. 'If more countries legalise gambling, we should see an increase in bank lending for casinos.'

Las Vegas Sands, the world's largest casino operator by market value, hired eight banks last month to arrange a loan of about S$5 billion for its Singapore gaming resort.

Genting International's loan will be a record for the Singapore-listed company. The gaming operator has yet to pick arrangers, said the people, who declined to be identified because the information is private.

Tan Hee Teck, chief executive officer of Resorts World at Sentosa Pte, Genting International's S$5.2 billion casino project in Singapore, didn't return calls made to his office yesterday.

The regulated gambling market in the Asia-Pacific region is expected to expand 15.7 per cent a year to US$30.3 billion in 2011, according to PricewaterhouseCoopers. The region will replace Europe, the Middle East and Africa as the second-biggest gaming market after the US by 2011, PwC says.

Genting International will be building the casino on Sentosa island, known for its golf courses and beaches. The resort will include South-east Asia's first Universal Studios theme park.

Singapore's government lifted a four-decade ban on casinos two years ago and issued licences to Genting International and Las Vegas Sands.

'Bankers will take a lot of comfort in that Genting does have a history in casinos,' Mr Agarwal said. - Bloomberg

Business Times 7 Nov 07
Cost of building Sentosa IR may climb to $6b
Resorts World factors in rising construction costs, new attractions, improved designs
By Uma Shankari

(SINGAPORE) The cost of the integrated resort (IR) on Sentosa could climb to as much as $6 billion - from an original $5.2 billion - as building costs escalate and more attractions are added.

Resorts World at Sentosa (RWS) yesterday said that it has revised its budget to $5.75 billion and made a further contingency provision of $250 million, taking the overall budget to some $6 billion.

$275 million of the confirmed $550 million budget increase can be attributed to new rides and attractions, improved hotel and resort designs and better transport and infrastructure. The other $275 million increase is due to rising construction costs, said Justin Tan, managing director of Genting International, which won the bid for the resort in December 2006.

The announcement by RWS comes after Marina Bay Sands said in August this year that its cost could escalate to $5.2 billion, from an original $5.05 billion.

Rising construction costs have affected developers island-wide. 'We have been able to lock in the prices of concrete and structural steel at very competitive prices,' said RWS senior director of projects Michael Chin. 'Labour costs and margins of contractors, however, have risen significantly.'

Developers have also reported that projects are being delayed because by a shortage of contractors. Despite this, RWS yesterday said that construction is on track for the resort's soft opening in early 2010.

More than 50 per cent of the overall excavation, piling and reclamation work has been completed and more than $600 million of construction contracts awarded, it said. Another $1 billion of contracts will be awarded by early 2008. Mr Tan does not expect the new contracts to hold up the project's completion. 'At this point in time, we are in negotiations with some of these contractors,' he said. 'They have not indicated that (possible delay) to us.' He also said that with the new attractions, plans for the resort are now final.

RWS yesterday announced six new attractions - two new rides at Universal Studios Singapore and four new performances that will be open to visitors free of charge.

Separately, Genting International reported a third-quarter loss because of an 'impairment' charge as a result of its acquisition of a UK casino group. Genting International lost $393.4 million in the three months ended Sept 30, compared with a profit of $86.9 million a year earlier.

Channel NewsAsia 6 Nov 07
Resorts World at Sentosa adds new attractions

SINGAPORE : Genting International is pumping an additional S$800 million to build the integrated resort at Sentosa.

This will push up the cost of Resorts World at Sentosa to S$6 billion - up 15 percent from the previous S$5.2 billion.

Higher costs of construction accounts for about half of the additional budget, but the amount also includes the cost for six new attractions in the resort.

These include two new roller coasters for Universal Studios.

Justin Tan, Managing Director, Genting International, said, "There will be three vacant plots of land in Universal where they can actually add in more attractions as we move along. Obviously we want to get more repeat visitors, so at this point in time, we are planning that every year, something new will come out in our attractions."

S$250 million has been included as contingency, in anticipation of increasing labour costs. - CNA/ms

Today Online 7 Nov 07
ET joins Sentosa IR fun
Developer ups budget by $550m to provide more theme park offerings and cover higher constructions costs
Sheralyn Tay

RESORTS World at Sentosa (RWS) has upped its budget from $5.2 billion to $5.75 billion — and not just in view of the rising construction costs.

The developer is bumping up its theme park offerings, with two new rides — one a rollercoaster, the other based on the hit movie ET (picture) — for its Universal Studios Theme Park. This brings the total number of rides to 24.

There will be four more free multimedia shows, on top of the three already announced such as a laser-and-water show designed by Emmy award winner Jeremy Railton.

These extras, as well as improvements to hotels and infrastructure, will take up half of the $550 million cost revision. The other half will go to cover the increased construction costs. On top of the $5.75-billion budget is another $250 million allotted for contingencies.

A ban by Indonesia on sand exports early this year, coupled with a buoyant property sector, has prompted the Government to release more sand from the national stockpile and diversify its sources.

About two months ago, Las Vegas Sands — which is developing the Marina Bay Sands integrated resort slated to open in 2009 — announced that it was "struggling" to stick to its budget and anticipated up to a 40-per-cent spike in its US$3.6-billion ($5.5 billion) projection.

Speaking via teleconference from Hong Kong yesterday, RWS chief executive Tan Hee Teck said: "With scarce resources, the cost escalation has been higher than anticipated."

Still, according to Mr Michael Chin, senior director of projects, RWS has managed to "lock in" the prices of concrete and structural steel at "very competitive prices". RWS and China's Jingye Construction Engineering Contract Company signed a $60-million contract in September for 23,000 tonnes of structural steel for work on the resort.

But while such costs have been manageable, Mr Chin noted, labour costs and margins of contractors have risen significantly. Still, Mr Justin Tan, managing director of Genting International, does not anticipate any further changes to the budget or the 2010 date for the soft launch.

"We are on track and in negotiation with contractors who have not indicated any delays to date," he said.

Mr Tan also said he was "very confident" about the growing Asian economy. With a growing middle-income market in China and India, RWS in Singapore will draw them over by being "a very unique and differentiated destination".

Three lots will be left vacant within the theme park to allow for later expansions and additions, he added.

Work on Universal Studios Singapore began last month and another $1 billion worth of building contracts will be awarded by early next year.

Meanwhile, Genting International has posted a third-quarter loss because of an "impairment" charge, Mr Tan said. The company lost $393.4 million, or 5.66 cents a share, in the quarter ended Sept 30, compared with a profit of $86.9 million, or 1.39 cents, a year earlier, the company said in a statement to the Singapore Exchange.

It expects a full-year loss including the charge, said Mr Tan.

Straits Times 7 Nov 07
Sentosa IR to cost $800m more, says Genting
Higher construction and labour costs and new attractions will bring the bill to $6b
By Arti Mulchand

THE price tag for Genting's Resorts World at Sentosa will be bigger than expected as a result of higher construction costs and additional attractions, such as a new roller coaster, being lined up.

Genting International now expects to spend $6 billion on the project, 15 per cent more than its original budget of $5.2 billion, said its managing director Justin Tan.

Of that extra $800 million, $275 million will go into the higher-than-expected construction costs; another $275 million will pay for the added attractions, with the remaining $250 million being put aside for contingencies.

The company explained that while it had locked down the prices for concrete and steel, labour costs and contractors' margins had shot up.

Mr Tan Hee Teck, the chief executive of Resorts World,said: 'If you look at Singapore today, there is $20 billion worth of construction going on. And because resources are scarce, the cost has escalated by more than we had anticipated.'

Resorts World is not alone in being stung by the changing economics of the construction industry. Soaring demand and the high prices of sand and steel have also hit building projects across the island.

Just two months ago, the other integrated resort, Marina Bay Sands, also disclosed that it was 'struggling...to stay within budget'.

Las Vegas Sands president William Weidner reckoned in August that the project could cost up to US$1.4 billion (S$2.03 billion) more than expected as a result of higher construction costs, as well as refinements to the design.

The executive director of the Singapore Contractors Association Limited, Mr Simon Lee, noted that contractors were dealing with close-to-full order books and were therefore being 'very selective' about the projects they were taking on.

Projects are thus attracting fewer tenderers, he added - not good news for Resorts World, which will award about $1 billion in jobs by early next year.

But Mr Tan still expects the resort to be ready for a soft opening in early 2010.

Construction is on track, with more than half the excavation, piling and reclamation works already done.

Asked about the new attractions being planned, Mr Tan said that two new rides would be put into the Universal Studios theme park, including a new roller coaster.

He added that four new multimedia shows would also be added, some designed by Jeremy Railton, who was behind the 2002 Winter Olympic Games ceremonies in Salt Lake City in the United States.

Money was being put into these and design improvements, he said, in anticipation of a 'bullish tourism outlook for Singapore and Asia in the next few years'.

Despite the higher budget, project returns to the resort are unlikely to be hit, the company said in its third-quarter results released yesterday.

It reported a loss of $393.4 million for the three months that ended on Sept 30, a reversal from the net profit of $86.9 million from a year earlier.
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