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The Macau Metro Monitor, May 6th, 2010


Sundart International Holdings Ltd., a major fitting-out contractor, said that a curb on foreign labor could lead to higher costs for casino operators building in Macau.  Sundart is in talks to negotiate with Galaxy Entertainment Group Ltd. to raise the value of its contract to fit out the company's HK$14.1 billion casino project by an estimated 10% or more as a result of the labor shortage, Chairman William Chan said Wednesday.  Sundart will need to increase pre-fabrication work in factories in mainland China to fulfill its obligations, said Chan, but this will require more planning and precise engineering, commanding a higher contract price.  The target size of Sundart's contract with Galaxy is HK$500 million-HK$600 million versus the estimated HK$1 billion in total it will cost to fit-out the company's Cotai project.

The proposal to limit nonresident labor causes "more headache," said Chan, "but this is not the first time we have faced this."  Macau is the most challenging operating environment for the contractor, which also does work in mainland China, Hong Kong and Qatar, said Chan.  Sundart is also bidding for work on Sands China's expansion project on Cotai, but the process of fitting-out the project is still in the "planning stage," said Chan.


Citing a number of analysts, the bulk of the gamblers at the two casinos are Singaporean citizens and permanent residents, who have to pay a S$100 ($72) daily or S$2,000 ($1,435) annual levy to play the tables.  A recent report by Bank of America-Merrill Lynch noted that they make up 50% to 60% of RWS' casino patrons.  Of this lot, nine in 10 pay the $100 levy for a 24-hour turn at the tables, with one in 10 forking out the $2,000 annual fee.  This could be a concern since local players are mostly gambling relatively small amounts, a contrast from the high-rolling Chinese officials and businessmen who flock to Macau, even if strict Singapore regulations have made it difficult for them to bring in these high rollers.

In the meantime, the Marina Bay Sands ran into an embarrassing series of glitches on its opening --delays, management shake-ups, staff woes, construction problems and now the latest salt to be rubbed into the wound – threats of legal action by organizers of the Inter-Pacific Bar Association (IPBA) Conference, the first event it hosted after opening on April 27.