Check this out. Its presents a surprisingly refreshing
perspective of our IR bidding process. 8W is already dismissed as a
grab-bag and its seems that they have offered fresh ideas of
Melco-PBL as an equity partner.
If 8W wins this IR bid , it means Melco-PBL will be spending way
more than Burswood casino , the casino it paid for in Perth. It
will also mean spending on a more expensive project than Marina
Sands which it initially dropped out for lack of funds and
financial viability.
Gehry's The Sail also appears to have taken a beating in the
maintenance aspects...
On the table now is Sentosa , initially touted to be cheaper than
the Marina Bayfront IR but now has ballooned to nearly SGD 6
Billion dollar if 8W wins the bid. Can they pull it off?
=================================
Last resort (with casino) in Singapore
By Gary LaMoshi
Gambling stocks are on a roll. On Wall Street, the Dow Jones
Gambling Index is now tripling gains of the broad market index.
Harrah's, the world's largest gaming operator with 60 casinos, is
mulling a US$15 billion bid from a pair of private-equity firms.
The Las Vegas Strip has defied fears that growth would sputter in
the face of high fuel prices.
But the real excitement is in Asia. Steve Wynn opened his $1.2
billion Wynn Macau in September, and in November shares skyrocketed
to new highs for all three US players in China's gaming enclave.
Las Vegas Sands, which operates the Sands Macao, the first US-style
casino in the former Portuguese colony, reported a 39% rise in
third-quarter revenues.
Macau is on pace to surpass the Las Vegas Strip with gambling
revenue of $7 billion this year, and the party has barely started.
Next year, MGM Mirage premieres a joint-venture project with Pansy
Ho, daughter of Macau's gaming dean, Stanley Ho. On landfill
joining Macau's outer islands of Coloanne and Taipa, LVS will open
its flagship Venetian Macao, anchoring the new Cotai Strip of a
dozen more hotels and casinos, more than 1.2 million square feet
(111,500 square meters) of convention space, and another million
square feet (92,900 square meters) of retailing. In a recent
interview, Steve Wynn said, "Macau is in the path of a huge
avalanche" likely to overwhelm the region.
New kids on the block
With all this excitement about Asia, you'd think casino companies
would be fighting to get a piece of the action by - pardon the
expression - hook or by crook. In Macau, one of six gaming licenses
sold for $900 million in March.
But in Singapore, bidding for a casino license - guaranteed to be
one of only two in this crossroads of Asia for at least a decade -
has tempted only three groups you won't find in the Vegas casino
listings and that most US players have never heard of. The
underwhelming competition shows Singapore is doing something either
terribly wrong or very right.
Last year, Singaporean Prime Minister Lee Hsien Loong's government
made the controversial decision for limited casino liberalization.
To many, the move seemed out of character with the city-state's
straitlaced reputation. Lee, son of Singapore patriarch and current
Minister Mentor Lee Kuan Yew, was out to prove it wasn't his
father's Singapore anymore.
For Singaporeans, the decision was doubly surprising because,
rather than allowing a single casino as expected, the government
proposed two sites for so-called integrated resorts. Two casinos
would broaden appeal and sharpen offerings through the magic of
competition with only a marginal increase in social costs, the
government contended.
Bay adds Sands
The first site, Marina Bay near the downtown financial district,
attracted three Vegas heavyweights, LVS, Harrah's MGM Mirage - the
latter two partnered with government-controlled Singapore property
developers - plus Genting, best known for its Genting Highlands
resort in Malaysia. LVS got the nod for its US$3.65 billion triple
tower with 2,500 hotel rooms, a public park the size of an aircraft
carrier 50 stories in the air, and Southeast Asia's largest
convention center.
A decision on the second integrated resort site on Sentosa Island -
the name means tranquility - is due this month. But the only
interest came from Genting, which has the most to lose through
cannibalization from a casino next door; Kerzner International,
developer of Atlantis in the Bahamas; and Eighth Wonder, designer
of the New York, New York casino in Las Vegas, heading a grab-bag
group that includes Australia's top casino operator Publishing and
Broadcasting Ltd and partner Melco International of Macau (see An
offer they couldn't refuse, November 
.
"The three proposers who have submitted their proposals for the
integrated resort on Sentosa are three accomplished players, and we
look forward to announcing the successful proposer in early
December," Singapore Tourism Board integrated-resorts director
Margaret Teo said.
Steady dwindle
Still that's a far cry from the 19 respondents, representing more
than two dozen of the biggest names in gaming and leisure, that
expressed initial interest in Singapore's casinos. In some cases we
know what happened. Steve Wynn accused the government of trying to
micro-manage the process, though he now says he might try again if
Singapore opens the door to more casinos. As the Marina Bay winner,
LVS is barred from consideration. MGM Mirage's partnership deal
with CapitaLand for Marina Bay included an agreement not to bid for
Sentosa, so that the developer could team with Kerzner there.
"Harrah's was actually quite excited about pursuing Sentosa,"
Cornell-Nanyang Institute of Hospitality Management dean Dr Judy
Siguaw revealed. The company engaged her school to put on a special
public seminar to show its commitment to the community, Siguaw
said. "Of course, the Harrah's buyout has understandably thrown a
crimp into the Sentosa bid."
Among the rest, some may have been scared off by the size and scope
of the projects, grown far more costly than initial projections.
The Sands Marina Bay will be the most expensive casino ever built,
starting with land cost of more than US$800 million. The Sentosa
project, with land price half as high but 19.4 hectares to fill,
was originally forecast to cost just half to two-thirds as much as
a Marina Bay project. Instead, Sentosa proposals budgets more for
development than at the Sands Marina Bay.
A handful
"These are very large projects that require huge investments and
careful adherence to extremely detailed plans with long staying
power to deal with the large front-end costs," Singapore Management
University president Howard Hunter explained. "I think there are
only a handful of potential bidders with the capacity to meet the
requirements."
Genting's US$3.2 billion Resorts World at Sentosa proposal includes
a $1.6 billion Universal Studios theme park, plus an oceanarium - a
very big aquarium - a water amusement park, and an interactive
maritime museum, plus six hotels with 1,800 rooms, shopping,
tie-ins with its Star Cruises subsidiary, and design by postmodern
icon Michael Graves, whose resume includes work at Disney's Florida
properties. That's the least expensive proposal on the table.
Kerzner and CapitaLand propose Atlantis Sentosa, a US$3.3 billion
futuristic water world designed not by Kevin Costner but
architecture legend Frank Gehry. Features include glass-encased
sails wired for image projections, a water theme park, the world's
largest man-made coral reef, and a botanical garden, all mixing
live and robotic plants and animals.
Hunter said: "The Gehry design is stunning but, having been an
administrator for a long time, I wonder about engineering the HVAC
[heating, ventilation and air-conditioning] systems with all that
glass and also ask who is going to clean the mildew that will
accumulate on the glass in this tropical climate."
Harry's other island
Eighth Wonder's US$3.5 billion bid includes a laundry list of
attractions from a Deepak Chopra well-being and retreat center to a
soccer academy under Pele to another contender for the world's
largest man-made coral reef under Philippe "grandson of Jacques"
Cousteau with 10 hotels with 2,100 rooms. The centerpiece is a
man-made extinct volcano surrounded by a saltwater lake with 35
rides and attractions called Harry's Island, after Harry O'Brien,
the fictional founder of the resort, born in 1900 at Raffles
Hotel.
Harry also happens to be the western name Lee Kuan Yew adopted as a
student in London. Eighth Wonder chairman Mark Advent may or may
not know that but it hasn't escaped the notice of one local
blogger. Dr Huang Shoou Chyuan says the "cheap marketing ploy ...
reveals the people of Eighth Wonder for what they are - low-class
desperados!"
That may be harsh, but it does underscore that it's hardly the
Who's Who of the global gaming and leisure business stumping up for
Sentosa. "The big mistake was to limit the number of licenses to
two," Brewerkz microbrewery founder Devin Kimble believes. "It made
the odds so long that I think many other operators just didn't want
to put in such a huge effort for such a slight chance at winning a
place.
"In addition, Singapore has a very clear agenda for the IRs
[integrated resorts]. It really doesn't want gambling. The casinos
are in effect just a way to guarantee a return for investors to put
in a convention center and theme-park-type attraction. And this
takes a special type of operator.
"If Singapore had just opened the doors and said, 'Show us what you
got and what you want to spend,' the bidding would have been
frenzied."
The Poker Face of Wall Street author and former Malaysian resident
Aaron Brown thinks the problem is more localized. Referring to
Sentosa's previous Malay name, Pulau Belakang Mati, Brown said,
"With all the expansion in Asia, Backstabber's Island may not be a
winner. It's not physically nice, despite billions of [dollars in]
cosmetic surgery, access is poor, despite the new light rail, and
it's Singapore, which has both rigid regulation and peripheral
location."
Most international casino companies seem to agree with Brown that
there are better bets out there.
Gary LaMoshi has worked as a reporter, author and broadcast
producer in the US and Asia since the 1970s. Longtime editor of
investor rights advocate eRaider.com, he's also a contributor to
Slate and Salon.com, and a counselor for Writing Camp.
http://www.atimes.com/atimes/Southea.../HL02Ae01.html