Questions No. 864 & No. 872 of Notice Papers No. 281 & No. 284 of 2008
Questions
[864] To ask the Minister for Trade and Industry to what extent the financial turmoil in the United States may delay or undermine the opening of the two Integrated Resorts and whether the Government is considering alternatives if the operators are unable to deliver.
[872] To ask the Minister for Trade and Industry (a) when will the integrated resorts (IRs) be fully opened since they are reportedly only having a soft opening; (b) whether there are changes to the terms and conditions since the contract was awarded; (c) when does the Ministry expect its initial projection of the IRs' boost to our GDP to be achieved; and (d) whether the Ministry anticipates the financial crisis to affect the business of the IRs when they open.
Mr. Speaker Sir, I will take Ms. Sylvia Lim’s and Ms. Eunice Olsen’s questions on the Integrated Resorts (IRs) together.
The Integrated Resorts are commercial projects which take on the usual business risks and face the vagaries of the market. Consequently, they are likely to face challenges arising from the current economic environment and financial market situation.
As a result of the recent financial turmoil in the United States, several US-based companies have been adversely affected by the credit crunch. This has led to concerns about the financial health of the US-based Las Vegas Sands Corporation and any possible impact on its Singapore subsidiary - the Marina Bay Sands Integrated Resort. To address these concerns, Las Vegas Sands Corporation has embarked on a capital raising programme. Members would be aware that Mr. Sheldon Adelson, Chairman of the Las Vegas Sands Corporation, has publicly affirmed his commitment to the Marina Bay Sands project. We welcome Mr. Adelson’s strong commitment and look forward to his company doing what is necessary to see through the completion of the Marina Bay Sands project. The Singapore Tourism Board remains in dialogue with Marina Bay Sands and continues to work with them to facilitate the project’s completion.
When Las Vegas Sands Corporation won the bid for the Marina Bay IR, it committed to complete the entire development by the end of 2009. The project has made good progress to date, despite the resource constraints arising from a tight construction sector. The current financial turmoil has introduced additional challenges for the parent company of Marina Bay Sands. They have therefore proposed a progressive opening of their development – a request which is being carefully considered by Government agencies.
Resorts World at Sentosa, which is developing the IR on Sentosa, has also requested a progressive opening of their development. Our understanding is that this request arose from some physical on-site constraints that the company encountered when constructing the IR.
STB and other Government agencies are considering these requests by Marina Bay Sands and Resorts World at Sentosa with due reference to what they have committed as part of the Request for Proposal exercise. Even as we do so, our expectation remains that each development will open as an Integrated Resort, and not just as a stand-alone casino. If the requests are allowed, they will also be subject to various terms and conditions.
Ms. Olsen has also asked when the projected GDP boost would be achieved and if the IRs’ business will be affected by the financial turmoil. It would be fair to say that due to the global financial crisis and the slowdown already evident in our tourism sector, there may be some impact on the IRs’ business when they open. It is, however, premature to try to ascertain in quantitative terms what the exact impact will be, given the volatile economic conditions. What we do know is that both IRs remain optimistic that their product offerings will draw visitors from their target market segments. On the Government’s part, the STB will continue to work closely with both IRs and monitor the situation.