Singapore govt will not bail out Marina Bay IR project
By Wong Siew Ying, Channel NewAsia | Posted: 12 November 2008 1322 hrs

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SINGAPORE: The Singapore government says it will not bail out the Marina Bay Sands integrated resort project in Singapore, which is being built by troubled United States gaming firm Las Vegas Sands.

And Senior Minister of State for Trade and Industry, S Iswaran, says Sands has also not requested for a bailout.

There have been concerns about whether Sands has the financial ability to finish the resort at Marina Bay, after it ran into financial difficulties.

Sands has been working to avoid defaulting on bank covenants and announced on Tuesday that it was raising some US$2 billion in capital.

Las Vegas Sands won the bid two years ago to build the Marina Bay integrated resort, one of Singapore's tourist magnets. The S$5.4 billion project, to be ready next year, is a commercial one from the start. That is why Singapore authorities will not bail it out should it fail.

There has been speculation, though, that government-linked companies may be interested. But Mr Iswaran made it clear that it is something for the companies themselves to decide.

"Government-linked companies are commercial enterprises. They have to make their own decisions on whether an investment makes sense for them or not. It's not for the government to tell them what to do," he said on the sidelines of an industry conference.

For now, construction work continues at the integrated resort. Sands said it has the money to see the project through, after raising over US$2 billion in capital.

"This fund-raising that Sands has done is an example of what they need to do in this environment in order to strengthen their balance sheet and be able to fund the relevant project. They have to do some prioritisation and that is what I think they are doing, and that is the right thing," said Mr Iswaran.

On the jobs front, Mr Iswaran said Marina Bay Sands has already started recruitment and there is no reason to think that a substantive portion of those jobs will be lost. However, some of them could be deferred due to delays in some elements of the project.

Mr Iswaran revealed that Sands has asked the Singapore Tourism Board to adjust the time-line for the construction of the resort. The request is being reviewed.

The government and Sands have a development agreement which sets out clear rights for both parties, including penalties for delays. But Mr Iswaran said the government will monitor the situation closely before deciding on exercising those rights.

In a statement late Wednesday, the Singapore Tourism Board (STB)said discussions are still ongoing. So it is unable to provide more details on Sands' proposal for a progressive opening starting of the integrated resort from the end of 2009.

The STB added that Las Vegas Sands expects to invest some US$500 million in additional equity in the Marina Bay project.

STB welcomes Sands' affirmation to focus its development activities and available capital on the completion of Marina Bay Sands.

- CNA/yt/ir