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Emanuel Graça Editor-in-Chief
emanuel.graca@
macaubusiness.com Make your mind up
THIS YEAR IS SET TO BE THE MOST IMPORTANT SO far, politically, for chief executive Fernando Chui Sai On. There are several events that will de nitely in uence how people judge his performance. One of Mr Chui’s main headaches will be
deciding which casino operator or operators will be given the green light to break ground in Cotai. Nobody is expecting further delays to this decision. After more than three years of postponements, the government needs to take a stand on this matter this year, for several reasons. Sands Cotai Central will nally open,
One of Fernando Chui Sai On’s main headaches for 2012 will be deciding which casino operator or operators will be given the green light to break ground in Cotai
ending the rst stage of the development of Cotai. As the construction work nishes, hun- dreds of construction workers will be out of a job and many subcontractors idle. There is a need for big new projects to keep them busy and avert social instability. The casino resort projects in Cotai still
awaiting government approval would do the trick. That is, unless of cials are expecting to use the laid-off construction workers and idle subcontractors to help build the light rail tran- sit system. Since the government has yet to present anything resembling a comprehensive employment policy, one can only guess. Keeping the building momentum going
in Cotai would also bene t Macau’s economic growth during a period of international nan- cial and economic uncertainty. Although growth in gross domestic prod-
uct is driven by gross gaming revenue, the con- struction of casino resorts is a big contributor to gross xed capital formation. It also pumps up inbound foreign direct investment. By failing to issue any casino construc-
tion permit in 2012, the government would be sending the wrong signal to casino operators and nanciers, since of cials have already in- dicated that all casino concessionaires will be allowed a foothold in Cotai. With no schedule announced yet for the renewal of the gaming concessions – or clea r procedure for going about it – such a failure would only rattle
an industry already facing a high degree of uncertainty. Such a failure would also detract from the government’s international credibil- ity, which is already suspect because it lacks a clear strategy and ip- ops in making policy for the gaming industry.
Grand nalists The only question remaining then is: which casino operators will be authorised to break ground in Cotai in 2012? It is unlikely that all projects awaiting approval will be given the thumbs-up this year. The simultaneous con- struction of four or more mega-developments would not be feasible. All contenders have sound reasons to go
rst. SJM Holdings Ltd. has built what is the city’s second-most recognisable landmark after the Ruins of Saint Paul’s – the Grand Lisboa. MGM China Holdings Ltd. can point out that the non-gaming expertise of its parent com- pany, MGM Resorts International, would bring added value to Cotai. Wynn Macau Ltd. may highlight that when its peninsula casino-hotel opened, it established new standards for the industry. Even Melco Crown Entertainment Ltd.,
already present in Cotai, can say to the govern- ment that when it acquired the majority stake in the Macau Studio City project it solved a tricky problem for of cials. It would be disap- pointed, to say the least, not to be authorised to undertake the project soon, gaming facili- ties and all. Adding more drama to the plot, Galaxy Entertainment Group Ltd. and Sands China Ltd. still have land in Cotai yet to be developed. Choosing which company should go rst
will be far from easy. Whatever the govern- ment’s choice, it will be criticised. The only way to blunt the criticism is to ensure that the decision is properly explained and that the process is open to scrutiny. The past practice of suddenly publishing casino land grant contracts in the of cial gazette without a word of expla- nation is no longer acceptable.
DECEMBER 2011
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