By Lim Wei Chean
THE Government has 'no intention' of bailing out the integrated resorts in Singapore should they fail, Senior Minister of State S. Iswaran said on Wednesday.
He was responding to media queries on whether the Government may step in to rescue the Marina Bay IR project, whose parent company, Las Vegas Sands, is facing cashflow problems due to the global economic downturn.
Las Vegas Sands auditor PriceWaterhouseCoopers said in a regulatory filing last week that the casino operator would not be able to meet lenders' requirements unless it cuts spending on developments, boosts earnings and raises more capital.
That sparked off fears the company would not be able to carry on with Singapore's first integrated project at Marina Bay. However, on Tuesday, the company said during its third quarter results earnings briefings that it would proceed to complete Marina Bay Sands as promised.
To do so, it is raising another $2 billion in capital and suspending projects in Macau and Las Vegas, as well as scaling back another casino project in Pennsylvania.
Speaking to reporters on the sidelines of the Carbon Forum Asia at Suntec Singapore on Wednesday morning, Mr Iswaran said Sands' announcement gave stakeholders here the 'assurance' that the company has enough resources to fund the project.
Asked if the Government would intervene if the project fails, he said: 'There has been no request for a Government bailout by Marina Bay Sands, and neither does the Government intend to do one.'
He added: 'It has always been a commercial project and the solutions to the challenges posed by the current economic environment, the financial market situation, lie in the commercial sector as well.'
To another question on whether a Government-linked company will bail out the IR, he said that such companies are 'commercial enterprises' which will 'have to make their own decisions' on whether an investment is viable or not.
[This is a poorly phrased answer. Yes the Govt is not considering bailing out Sands' IR because they are managing the situation well enough and they don't need to be bailed out. But the answer may well undermine the already weak sentiments about the development and Sands' efforts to manage the situation. The govt need not make any promise and in any other circumstances the answer would be a correct one, but in these times of fear and uncertainty, the govt should be trying to calm and reassure and to build up confidences, not tear them down.]