News Stop: Genting wins the Sentosa Integrated Resort Bid

The news is out and we got it wrong in predicting the winner for the Sentosa Integrated Resort (Casino) bid. Genting International-Star Cruises consortium wins the Sentosa Integrated Resort Bid. For the first time surprisingly in both bids, our government has made the wise decision of letting two companies with no links to government-linked companies (GLCs) to jumpstart the Integrated Resorts project. So, here is an aftermath analysis on why Genting (with a joint venture with Universal Studios) manage to beat the other two bidders for the Integrated Resort (casino) bid.

The Genting International wins the Sentosa integrated resort bid. The official note from the ministers is that Genting has put forward the most compelling proposal, by bringing in big brands such as Universal Studios and Dreamworks to Singapore. Of course, there are also political pressure associated with this bid. In their proposal, coming from excerpts from the ChannelNewsAsia website:

Its $5.2b Resorts World At Sentosa will leverage on international brand names like Universal Studios, which will design 16 new rides specially for the resort.

Besides the Universal Studios theme park, there will also be 3 other water-themed attractions including a surf pool.

Visitors will be able to observe some 700,000 fish species in one of the world’s largest oceanariums.

Genting’s proposal also includes six hotels and a spa with over 1,800 rooms for both leisure and business travellers.

There are a couple of reasons why Genting win if we go beyond the proposals, afterall, they were hailed as frontrunners from both bids:

• Diplomatic Relations with Malaysia: There is the street view that if Genting loses the bid in Singapore, there will be political strain between both countries. It might also make things difficult for Singapore investors and entrepreneurs to move into the south Johor’s development project. As we have said earlier, there were already political pressure exerted by the Malaysian leaders (Najib) on this project.
• Possibility of competition if they did not win: Another view is that if Genting did not win the bid, Malaysia might set up a casino in the south Johor project and hence we might face a difficult competitor. To ensure that Genting will not set up shop elsewhere, the best strategy is to see that Genting wins the bid in Sentosa. It will also facilitate the integration of Star Cruises and generate more tourism within the region.
• Big brands do count: Universal and Dreamworks make Genting a strong contender for their track record. From the very start, Singapore wanted these companies to set up shop in Singapore, particularly digital media in the recent years. The endorsement of Steven Spielberg proved to be an important turning point, as it would mean that Singapore can now harnass on this relationship to continue pushing itself as a media hub in the region.

In any case, now with both IRs decided, the next question is to see whether the government might want to open up more IRs in the future.