Parliament: IRs to pay fair market value for land allotted to them

Chee Hong Tat explains why no tender called for land awarded to MBS, RWS for expansion

It is a longstanding government policy to allocate land directly to investors when there are "substantial investments that can benefit our economy and workers", said Senior Minister of State for Trade and Industry Chee Hong Tat yesterday.

He made the point in Parliament when explaining the lack of a tender process for the land awarded to Singapore's two integrated resort (IR) operators for their expansion plans.

Marina Bay Sands (MBS) will pay $1.3 billion for a 33,000 sq m land parcel, equivalent to more than four football fields, he said. It will be the site of its upcoming fourth tower.

Resorts World Sentosa (RWS) has set aside a $1 billion budget to intensify its current land holdings and buy an additional 10,000 sq m of land, Mr Chee added.

The sums are based on fair market value and determined by Singapore's chief valuer according to market conditions and established valuation principles, he said.

Mr Chee was replying to Mr Gan Thiam Poh (Ang Mo Kio GRC) and Non-Constituency MP Daniel Goh, who had asked how land is allotted to the IRs for their plans.

Last month, the Government disclosed the duo's plans when announcing it was extending the exclusivity period for the casinos to operate until end-2030.

 
 
 

The direct allotment of land had been noted by assistant professor Lee Kah-Wee, an associate director of the National University of Singapore's master of urban planning programme.

Dr Lee, author of Las Vegas In Singapore, wrote on Facebook that the move was a rare form of "direct alienation", in which land was transferred to the IRs without undergoing land tender processes typically done in other sales of government land to private entities.

Mr Chee, elaborating on the policy, said it had been extended to both local and foreign companies across different industries.

The additional $9 billion investment pledged by the two IRs is expected to draw 500,000 more visitors to Singapore and contribute $500 million to the economy each year, he said. This will create up to 5,000 jobs and more business opportunities for Singapore firms.

Both IRs have been allowed to expand their gaming areas - by 2,000 sq m for MBS and 500 sq m for RWS - although they have yet to decide whether to do so.

If they do, the operators will pay extra costs that are to be decided by the chief valuer, he added.

Even if they exercise the option in full, the proportion of total floor areas used for gaming to non-gaming will fall to 2.3 per cent from today's 3 per cent, he said.

He also said the casinos contribute around two-thirds of the IRs' total revenue and make it commercially viable for them to offer non-gaming facilities as one integrated package.

Mr Chee, replying to associate professor Goh, said that without the option for the additional gaming areas, the operators may not find it viable to expand and build the new facilities, such as the theme park areas at RWS and an entertainment arena at MBS.

He added, quoting MBS chief executive George Tanasijevich: "The casino revenue generation is very important because it pays for things that sometimes cost money, sometimes have a very low return or are just very expensive."

 
A version of this article appeared in the print edition of The Straits Times on May 07, 2019, with the headline 'IRs to pay fair market value for land allotted to them'. Print Edition | Subscribe