Monday May 29, 2006

Casino lights, burning bright

business-times.asia1.com.sg :

Resorts with casinos mean bright lights - and plenty of them. And that spells good news for generating companies that win the contracts to supply the electricity. "The integrated resort (IR) accounts will be prize accounts," a power industry source said yesterday. They will be major accounts because electricity is a key input of resort operating costs.

Another source estimated that the two IRs - Marina Sands and another to be decided on Sentosa - will need well over 100 megawatts of electricity. To put this in perspective, a hotel like the Four Seasons needs about 2 MW, the source said. Given that generating capacity exceeds demand, they are likely to get competitive pricing. Overcapacity in generation here - which is expected to reach 10,500 MW by 2007-2008, or double peak demand of 5,100 MW - has helped keep prices down.

The Marina Bay IR awarded on Friday to Las Vegas Sands will comprise conference halls, performance venues, a luxury hotel and iconic tourist attractions, as well as gambling facilities, on a 20.6 hectare waterfront site. Singapore's other IR is also planned on a 49-hectare site on Sentosa, with international operators expected to submit bids by Oct 10. Now that the Marina site has been awarded, all the power retailers here will start bidding for the electricity account, sources say.

- As the Americans might say : "Burn, baby, burn!" Folks on the doomer side of the fence will say, of course, that the whole enterprise is, well, doomed. You could almost hear the chorus : "Discretionary spending? Tourism? Conferences? You gotta be kidding! Run for the hills already!!" But as a moderate, I say, that's fine (for now), as long as the dollars coming in from this exceed all the expenses, including that of all this electricity, and provided that there is no "trigger event", obviously <- the "ultimate disclaimer" :)

(2006-05-29 18:58:37 SGT) [Energy] Permalink

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