Miracle in the making
http://www.businessmirror.com.ph
The international gaming industry must be abuzz with news about the new Las Vegas-style entertainment city that is expected to start rising on the Philippine horizon before the third quarter of this year. What’s amazing is that the government expects the construction of this ambitious project to be almost entirely bankrolled by the biggest gaming investors of the world.
It expects to see this big project through not only without any cash outlay on its part but also without issuing any sovereign-loan guarantee on behalf of any project proponent.
We are talking, of course, of the $10-billion Entertainment City that will be built initially on 40 hectares of reclaimed land along the Manila Bay. Bets are being placed that when completed in less than three years, this “city” would be more fabulous, and therefore more attractive, than the other state-run projects in Macau or Singapore.
Officially named the Bagong Nayong Pilipino Manila Bay Integrated City, the project—the biggest ever to be undertaken under the aegis of the state-run Philippine Amusement and Gaming Corp. (Pagcor)—is designed to triple the national government’s income from Pagcor operations to $1.5 billion annually.
But more than that, it is expected to give the economy a big shot in the arm by generating an initial 250,000 jobs for the local work force and more than triple foreign tourist arrivals by showcasing the natural charm of the country.
Pagcor chairman and chief executive officer Efraim Genuino, who conceptualized the whole project, says that two separate groups have, so far, qualified to plunk in a total of about $4.5 billion to get the building of the “city” started as soon as possible. Both investors, Genuino says, are recognized by the Nevada Gaming Commission.
It was only in September last year when Pagcor issued the official terms of reference to those who may want to be licensed by Pagcor to participate in the project. The terms of reference, by the way, are also posted on its web site (pagcor.com.ph).
Genuino says the response to the Philippine invitation has been enthusiastic, although a few of the individual investors who attended the prebidding conference held in September indicated that the $1-billion minimum investment requirement was a bit steep for them.
Genuino said: “But it’s necessary to set the ante at this level, to keep out the small investors and accept only the ones with the financial muscle for this kind of undertaking. Otherwise, how else can we be competitive with Macau or Sigapore?”
According to the terms laid down by Pagcor, applicants must have both the financial capability and the well-established experience in the hotel and gaming businesses. Big financiers are also welcome, but they must team up with experienced, reputable gaming entities to qualify.
For starters, a proponent must commit to build “a total entertainment complex” with a minimum project cost of $1 billion.
Also, “each project proponent must have a minimum debt-equity ratio of 50-percent equity and 50-percent debt, in order to assure the project’s financial viability.”
In his talk to the prebid participants, Genuino pointed out that the Philippines’ location was its biggest asset, considering that it is only a few hours away from countries such as China, which has the biggest number of outbound tourists in the world today.
The Philippines, he added, has other added attractions compared with the other gaming meccas. “Macau can offer only its casinos, but the Philippines has much more—first-class beaches and golf courses, plus other exotic tourist adventures.”
Another condition listed in Pagcor’s terms of reference provides that locators in the entertainment city must hire 95 percent of their manpower requirements from the local labor force, and that their salaries be paid in United States dollars. “This is intended to slow down the exodus of local workers,” Pagcor spokesman Dodie King explained.
Under the terms of reference, each investor’s mandate is not merely to establish a hotel-casino but “a destination that will attract not just gaming enthusiasts but also business tourists and leisure travelers…the concept must be unique [in architectural design]…key components must include theaters, exhibition halls, museums, housing for casino employees and other tourist amenities.”
Genuino, who has an outstanding marketing background, is confident the Philippines is already succeeding in selling this concept to the world, which he says is the wave of the future.
“Construction should start before the third quarter of this year,” he adds.
| PAGCOR's Bagong Nayon Pilipino Entertainment City To The Point Emil Jurado Another project under the Arroyo administration—Pagcor’s Bagong Nayong Pilipino Entertainment City Manila in Bay City, the 120-hectare Roxas Boulevard reclamation—will be up in two years or so. It is Pagcor’s answer to the $98 billion global gaming and entertainment industry in Asia, now being monopolized by Macau, Singapore, South Korea, Thailand and Malaysia. To get a slice of the pie is more than the dream of Pagcor’s chairman and chief executive Ephraim Genuino, who conceptualized the project. The project, whose terms of reference have already been finalized after Asian, American and European gaming and entertainment giants showed keen interest, could cost from $10 billion to $15 billion. More than a venue for world-class gaming and entertainment, Genuino’s brainchild will have theme parks, luxury hotels, residential villages, convention and sports centers, shopping malls, golf course, a hospital district, state-of-the-art theaters, race tracks, gaming centers, waste management facility, marina and a boardwalk, a cultural center and of course, the Bagong Nayong Pilipino for tourists. This is a project I can support because gaming and entertainment is now the name of the game in fueling tourism. This has been observed in Macau, Singapore, Malaysia, South Korea and Thailand. I still believe that tourism is the country’s engine of growth. The project aims to provide more than 200,000 jobs and boost related industries and businesses, like hotel and hospitality. Pagcor now is the third biggest revenue-generating state-owned entity. With this project, Pagcor could well be the biggest income generator for government.
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