Genting to award us$ 335 million in Singaporean contracts

The contracts will be awarded April to June and will include reclamation work and the building of roads, the company said. The resort’s key feature will be a Universal Studios theme park bigger than the one in Los Angeles, and Genting said it plans to add four other attractions.

“Most of the projects would go to Singapore companies,’’ Lim Kok Thay, Genting’s chairman, said at a briefing in the city-state today, adding that they will create “economic spinoffs that will benefit numerous sectors of the economy.’’

Malaysia’s Genting, which won the bid in neighboring Singapore through its unit Genting International, expects the us$ 5.2 billion casino-resort to generate us$ 9.8 billion a year in tourist spending. Singapore wants to double visitors to 17 million by 2015 and triple tourism spending to us$ 19 billion.

Genting International said on March 27 it will buy the 25 percent stake in the Singapore project owned by Star Cruises Ltd. to help meet the city-state’s casino-licensing requirements. Star Cruises and Genting International had tied up with gaming billionaire Stanley Ho in a Macau casino-resort, where Ho would also invest in Star Cruises.

Genting International has also agreed to sell its stake in the Macau project, giving a clearer ownership structure for the Malaysian company’s developments in the two markets. Singapore’s Trade Minister Lim Hng Kiang said today the issue over Genting’s license in the city-state has been resolved.

Analysts including Winston Liew at OCBC Investment Research Pte said the issue over the gaming license will only matter in the advanced stage of the project’s development, when Genting is scheduled to receive the permit. “It’s status quo,’’ Liew said. “Depending on how the situation is at that point in time, the government will react accordingly, so nothing has changed.’’

The cost of the Singapore project prompted Moody’s Investors Service to cut Genting Bhd.’s debt rating by one level to Baa1, the third-lowest investment grade, from A3.

“The downgrade reflects Moody’s expectation that Genting’s financial position is expected to weaken in future years as it invests in the Sentosa gaming project,’’ Kaven Tsang, Moody’s analyst, said in a statement today.

Genting, with Las Vegas Sands Corp., the world’s biggest casino-operator by market value, won the bids last year to build two resorts in Singapore. The two projects, which will cost more than us$ 3 billion each, are among Singapore’s biggest developments.

Building costs in the city-state are projected to increase as much as 2 percent after neighboring Indonesia banned the export of sand, used as a construction material, in January. Building contracts could rise from us$ 10 billion in 2006 to us$ 12.5 billion this year, the government has said.

Singapore’s government will bear some of the burden of the cost increase for the Sentosa project, Lim said, without specifying the amount. “This is a very unusual development and it’s not equitable for the contractors to bear the full burden,’’ Lim said.

The government said April 9 it will subsidize as much as 75 percent of the cost increase in sand and granite for public projects. The two casino-resorts will add 2 million to 3 million more tourists to Singapore by 2010, bringing the city-state’s annual visitors to about 13 to 14 million, Lim said.