Developer ups budget by $550m to provide more theme park offerings and cover higher constructions costs
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.
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