Sands IR: The glitz, the glamour, the swelling cost

By Jasmine Yin, TODAY
29 August 2007

SINGAPORE: At US$3.6 billion (S$5.5 billion), it was touted as one of the costliest casino-resorts ever, out-glitzing even the newly-opened Venetian Macao.

Now, the development bill for the Marina Bay Sands integrated resort (IR) could swell further - by as much as US$1.44 billion.

A spike in the cost of building materials, sparked by the Indonesian sand ban in January, as well as refinements to development's design, could push up the tab by "20 to 40 per cent", Las Vegas Sands president and CEO William Weidner told the Singapore media visiting Macau on 28 August.

Said Mr Weidner: "My cost people keep on discussing concrete and some of the sand issues that you all face in Singapore. We're struggling, quite frankly, to stay within our budget."

"It's a very, very complicated and sophisticated building... as wonderful as the idea is, now that we try to execute it in concrete and steel, it's a bit of a challenge. But we'll get there. We’re looking for means and methods to construct it more efficiently."

Back in February, when construction on the IR began, the casino operator was hopeful the sand supply issue would be a "temporary glitch" and that the Singapore Government would find a long-term solution.

The Las Vegas-based operator meets regularly with the Republic's authorities. Said Mr Weidner: "There are several issues that still need to be resolved."

Some S$700 million worth of contracts have been awarded. A whopping S$1-billion contract to build the IR's three 50-storey hotel towers - which will go to a multi-national corporation - will be announced soon, revealed Marina Bay Sands' vice-president George Tanasijevich.

The IR is due to open in 2009 and already, talks are ongoing with organisers to host about 20 major events up to 2013, he added.

Sands was the first foreign player to enter Macau's gaming scene in 2004.

The US$265-million Macao Sands got its money back - and more - by raking in US$400 million in revenue within a year.

So, is Las Vegas Sands expecting its latest property - the US$2.4-billion Venetian Macao, touted as the world's second-largest building - to break even within 12 months? More like five years, Sands' billionaire chairman Sheldon Adelson told AFP.

More than 3,000 guests and 1,200 media turned up for Tuesday's star-studded opening of the Venetian Macao, which is modelled - on a larger scale - on Sands' The Venetian in Las Vegas, complete with canals, gondolas and a fake sky.

In addition to more than 850 gaming tables, there are 3,000 luxury suites, a 15,000-seat stadium and 350 shops. The new resort reportedly employs 5 per cent of the territory's workforce of 450,000.

In the crowd was Singapore Tourism Board deputy chairman and chief executive Lim Neo Chian, who described the new resort as "very impressive". He said: "By the time the Marina Bay Sands IR opens in Singapore, Las Vegas Sands will have invaluable experience and insight into the Asian market - enabling them to make Marina Bay Sands, which is very different in design to their two Macau resorts, an even better proposition."

The Venetian Macao is the first casino built on the Cotai Strip, a complex of hotels that will have more than 1 million sq ft of gambling space, 3 million sq ft of retail and almost 20,000 hotel rooms.

With the target being the huge numbers of nouveau riche gamblers who pour daily across the border from mainland China, Mr Weidner announced plans for a Las Vegas Sands ferry service from Macau to Hong Kong and Shenzhen on 28 August. A new terminal is being built near the Macau airport, as are 10 new ferries that will cast off between October and March.

Last year, gaming revenues in Macau totaled US$7.2 billion - overtaking the Las Vegas Strip for the first time. - TODAY/ym