When prospective bidders bought the 800+ pages and 2 CDs of the Singapore Government’s Request For Proposal (RFP) kit on 15 November, the model outlined was described as setting the global gold standard for casino development. That gold standard has come at too high a price for some, and a number of bidders have already pulled out of the race to build Singapore’s first integrated casino resort at Marina Bay, well before the 29 March 2006 deadline.

Just two days after buying the tender kit, the South African company Peermont Global announced it was withdrawing from the bidding process. The reason given was a thorough risk analysis, although it admitted that there would have been little chance of winning. Yesterday GuocoLand also pulled out after reviewing the Government guide lines and today Australian Tabcorp joined the ranks of those leaving the contest.

Estimated development costs, possibly being as high as US$3 billion or more for the Marina Bay development alone, are a prime reason for some companies withdrawing. Some analysts predict that of the 12 original groups submitting concepts only 5 would actually tender for the Marina Bay casino development. Another factor causing a rethink is some of the casino licence conditions to be imposed by the Singapore Government. The casino entry fee of about US$59 will deter much of the local market, negatively affecting potential returns. The spiraling costs of developing an integrated casino resort, where the casino must be a minor part of the project, has led the groups to believe that both their companies and their shareholders would be better served by withdrawing from the bidding process.

Tabcorp International has stated that its strategic growth would be constrained by the project, and that it would continue to pursue offshore expansion in other countries. Peermont Global previously confirmed that it would concentrate on expansion of its existing resorts in South Africa and Botswana as well as looking for further opportunities there and internationally. Global giants in the gaming industry, such as MGM Mirage and Harrah’s, are expected to have the best chance of developing Singapore’s first casino resort.
(E-12.09.05)

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