Dec 8, 2006

Malaysia's Genting wins Singapore's second casino licence

SINGAPORE (AFP) - Singapore have named Malaysia's Genting International as winner of the city-state's second casino licence, laying a large bet the new development will boost its high-profile tourist industry.

"The successful proposal for the integrated resort on Sentosa is Genting International and Star Cruises," Deputy Prime Minister S. Jayakumar told reporters Friday.

He said they "submitted the most compelling proposal overall that best meets our economic and tourism objectives."

Genting and its sister company Star Cruises tied up with Universal Parks and Resorts of the United States for the project on Sentosa island, promising to invest more than five billion Singapore dollars (3.2 billion US).

Analysts said Genting's plan to build a Universal Studios theme park made it favourite to clinch the bid, which was judged largely on its tourism appeal.

Universal Studios theme parks already operate in Japan and the United States where they offer attractions including "Revenge of the Mummy -- The Ride" and "Terminator 2:3D".

The Genting team was up against two other bidders including Bahamas-based casino operator Kerzner International which joined forces with Southeast Asia's largest property group, CapitaLand of Singapore.

The third contender, privately-held Las Vegas firm Eighth Wonder, launched its bid with Australia's Publishing and Broadcasting Ltd and Hong Kong's Melco International Development Ltd, and with Isle of Capri Casinos Inc.

"All three bidders submitted high-quality proposals," Jayakumar said.

The Genting Group operates casinos near the Malaysian capital Kuala Lumpur.

Their proposed five billion dollar investment in the Sentosa project is roughly in line with that planned for Singapore's first casino development along Marina Bay near Singapore's commercial heart.

Singapore awarded that licence in May to Las Vegas Sands which proposed to strengthen the city's position as a top convention destination.

Genting International was one of the losing bidders for that project which is expected to open in 2009, closely followed by the Sentosa resort.

Analysts said Genting's chances were much better this time with its plans for the 49-hectare (121 acre) site on Sentosa, a tourist destination that already has hotels, golf courses, an aquarium and marina.

Along with its showpiece Universal park, Genting said it would build the world's largest oceanarium complete with a water park, maritime museum and six hotels offering more than 1,800 rooms.

"In particular, the proposal reflects our vision for the Sentosa integrated resort as a large-scale, family resort with its host of world-class family leisure attractions and other offerings," Jayakumar said.

He said the government intended the development to strengthen Sentosa's island resort offerings, adding that key attractions should draw "a large number of new visitors to Singapore" and extend their length of stay.

OCBC Investment Research analyst Winston Liew called it a close race.

"I think the Universal Studios proposal was the jewel but the other bits of the proposal were also very attractive," Liew said.

Another analyst, Sean Monaghan of Merrill Lynch, said the Genting bid looked very strong on paper.

"At the end of the day when you do a reality check, it came out as very, very compelling," he said.

Singapore and Malaysia have had an often stormy relationship since their split in 1965 but Jayakumar denied in a news conference that bilateral relations were a factor in the decision.

"I am sure that this will bolster the strong economic ties between the two countries," he added.

Minister for Trade and Industry Lim Hng Kiang said the Sentosa resort will add 0.8 percentage points to the city-state's growth rate and provide about 30,000 jobs by 2015.

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