Singapore's glittering Autobahn, Part 2

Note: Wikiepedia pix shows the current causeway linking southern Singapore and Sentosa island. The other causeway, which connects northern Singapore and Malaysia, has been retarding the flow of water in the dirty Straits of Johor for more than eight decades.

It's great to read about the latest plan to improve traffic access to the tourist island of Sentosa from Singapore's mainland.

According to The Straits Times, the roads leading to Sentosa, VivoCity and HarbourFront will be widened to cater to an anticipated increase in traffic into the area. With one of Singapore's two integrated resorts opening on Sentosa and new condominiums to be built in the area by 2010, traffic is likely to go up by 30 per cent, said the Land Transport Authority yesterday.

The ST article didn't mention it, but earlier news reports had said that Genting International's Resorts World at Sentosa -- the developer of the integrated resort and casino on Sentosa -- had started work on the second bridge to link Sentosa and the mainland.

The second bridge is aimed at easing visitor traffic as over 15 million of them are expected to visit the Resort when it opens in early 2010 or 2011. The report said the 710-metre, 3-lane bridge will run parallel to the existing causeway which connects Sentosa to the mainland. And when completed in September 2009, both will be merged.

The latest roadwork and the new Sentosa bridge will be a great addition to the new transport blueprint unveiled by the government in the past two weeks. Apart from plans to improve the public transportation system, the government will build the North-South Expressway by 2020. Singapore's Autobahn will cost S$8 billion, or at a stggering S$381 million per km.

Many locals and foreigners will enjoy seamless travel from Sentosa to the rest of Singapore, thanks to the government's transportation blueprint.

But they will almost certainly hit a major road bump should they wish to cross over to the southern Malaysian city of Johor Baru. The two countries have not been able to work together to jointly build a bridge to replace the old and congested causeway. A new and wider overhead bridge, which will have many benefits, shouldn't cost more than S$1 billion each.

This is a rough estimate based on the two countries' construction bill of over RM2.4 billion (slightly more than S$1 billion based on today's exchange rate) to jointly build the longer Second Link bridge when bilateral ties were a lot warmer in the mid-1990s.

Malaysia's bill came up to more than RM1.2 billion. Singapore's portion was last reported to be about S$600 million.

A new bridge to ease the massive cross-border flow between Malaysia and Singapore makes good sense. ST had earlier estimated about 250,000 people enter Malaysia via the causeway every day. This works out to more than 90 million people each year, which is a staggering number as it is nearly 20 times the population of Singapore. The traffic volume at the causeway is 6 times higher than the projected number of visitors to Sentosa.

It will be ideal if one could travel from Sentosa all the way to Malaysia seamlessly one day via two wide bridges and the glittering S$8-billion Autobahn.

More expensive bets

Well, news that Genting International will incur a cost overrun of S$800m for its casino resort (Pix source: Genting International Proposal listed by Wikipedia) on Singapore's Sentosa Island due partly to higher construction expenses has not come as a surprise.

Genting International, a unit of the late Malaysian tycoon Lim Goh Tong's Genting Bhd, now expects to spend as much as S$6 billion to build the Sentosa casino, up 15 per cent from an earlier estimate of S$5.2 billion.

The Reuters report said the new budget for the casino, which includes a contingency provision of S$250 million, also covers the cost of six new attractions as well as improvements to transportation and access infrastructure.

Singapore is undergoing a construction boom due to the award of several large projects such as a new financial centre, the two casino resorts, several shopping malls and a slew of redevelopments of private apartments known as en-bloc deals in Singapore.

Similarly, Sophie's World reckons that cost overrun is expected for the other casino project -- Las Vegas Sands' 20.6-hectare piece of waterfront land at Marina Bay.

Apart from the tight construction market, Singapore is facing a higher import bill for sand and other building materials due to the ban on the sale of sand by neighbours Malaysia and Indonesia.

In addition, the construction job for the Marina Bay Sands project on the reclaimed land is likely to be way more complex than Genting's project. According to an engineer, a lot of big boulders were used in the reclamation of the land in the 1980s. This makes it more difficult to extricate the boulders for the foundation work. By the way, Sophie's World has never seen so many construction cranes on a single site!

So, will the two casino resort developers be able to complete the mammoth projects -- each resort will cost as much as the Circle Line subway system in Singapore -- by 2010 as planned?

Don't bet on it!

Mickey Mouse going to Malaysia?

This is an old story that just won't die, but not as old as Mickey Mouse (Image from Wikipedia)

According to Malaysian weekly The Edge, Walt Disney Co is looking to build a theme park on a 500-acre (202-hectare) site in southern Malaysia. The theme park will reportedly be sited at Bardar Nusajaya near the second link bridge in the Iskandar Development Region zone in Johor. The report said it would be ready in six years if a deal is signed.

The proposed Disneyland theme park and resort is slated to be bigger than Hong Kong Disneyland and about the size of Tokyo Disney Resort, the report said. Although the talks with Disney are progressing fast, discussions with other theme park operators, including Warner Bros Entertainment and MGM, have not ceased, the report said.

Will Mickey Mouse learn to speak Malay and appear at the theme park in Johor, which is next to Singapore?

Can Disney compete with the two integrated resorts and casinos that are coming up in Singapore? Las Vegas Sands and Genting International have gone full-steam ahead in building their resorts that are expected to be completed in 3-4 years. The casinos in Singapore are set to attract many gamblers and their families to Singapore. Casinos can help subsidise the rest of the resorts and theme park that are generally less profitable.

But any new theme park or resort in Malaysia won't have a casino. Unlike Singapore, Malaysia still has a ban on new casinos or gaming outlets since it granted the sole casino licence to the late Lim Goh Tong's Genting more than four decades ago.

Maybe there will still be room for Mickey Mouse in Malaysia as its concept is different from the two resorts in Singapore. But there are many problems at the Johor end.

Johor has the land and the resources to undercut Singapore but Malaysian planners simply lack the ability to execute their grand plans.

Johor has a long history of false starts in many overly ambitious projects -- Desaru, Waterfront City, a theme park by ex-UN Sec Gen, and even Universal Studios, which has since teamed up with Genting for the resort on Sentosa in Singapore.

The Iskandar Development Region is a grand plan but the government can't even resolve some basic problems in the state like proper city planning (Malaysia has since scrapped the proposed passport-free zones in Johor), crime, flooding and the failed attempt to jointly build a new bridge to replace the old causeway with Singapore.

So don't bet your last dollar that Mickey Mouse will finally learn to say "Selamat Datang ke Malaysia"*.

* Welcome to Malaysia in Malay

Cuti-Cuti Singapura*

(Pix: Singapore's main shopping thoroughfare Orchard Road during a Christmas light-up in 2005. Source: Wikipedia). *Cuti-Cuti means holiday in Malay. The title of this post is a little play on words on Malaysia's tourism drive called Cuti-Cuti Malaysia. Singapura is, of course, the Malay name of Singapore.

Will we ever see the reversal in the flow of tourists between Singapore and Malaysia?

Traditionally, more Singaporeans visit Malaysia than vice versa due to many reasons. One reason is the mighty Singapore dollar, which stretches the spending power of Singaporeans across the causeway at the current exchange rate of more than RM2.20 for each S$1. Apart from the strong Sing dollar, many Malaysians have been deterred from shopping in Singapore over the years due to the rapid development of its own shopping landscape.

But Singapore has come up with a creative way to target visitors from its closest neighbour, with a foreign exchange angle.

According to an advertisement and news reports, the Singapore Tourism Board (STB) said Malaysians could enjoy selected tourist destinations in Singapore at half price between May 25 and June 30.

The selected attractions include the Singapore Zoo, Sentosa island and even a ride on the big DHL balloon in the middle of the city, according to a full-page ad placed in Malaysian newspapers over the weekend.

STB Southern Malaysia area director Alfred Poon said Malaysians who wanted to take a ride on the Singapore River, for example, would pay RM12 (S$5.30) instead of S$12, according to The Star. To qualify for the offer, Malaysians will have to produce their passports with valid embarkation cards. Malaysians can either pay discounted fares in RM or the equivalent in S$.

The trick may just work in the short term. But in the longer term, Singapore and Malaysia must make it even easier for greater cross-border movement of people in order to generate more tourist activities on both sides of the causeway.

Will Singapore scrap the vehicle entry fee for Malaysian cars entering Singapore? Will Singapore eventually allow a less restrictive and direct bus service from Senai Airport in Johor to Singapore? Will Singapore and Malaysia scrap the toll rates at the causeway and the Second Link?

Will the proposed bullet train service between the Malaysian capital of Kuala Lumpur and Singapore take off? Will the proposed MRT network in the southern Malaysian city of Johor Baru be connected to Singapore?

Will budget airlines be allowed to compete freely with Singapore Airlines and Malaysia Airlines when the popular KL-Singapore route is liberalised next year?

Will yachts and ships be allowed to sail more freely between the two countries without being delayed by immigration checks in the middle of the seas by coast guards in patrol boats?

Apart from better infrastructure, both sides must improve immigration clearance at the causeway, the clogged artery linking Singapore and Malaysia.

And lastly, will Singapore and Malaysia jumpstart the bridge project to replace the ageing causeway?

Updated: Double joy for Goh Tong

Malaysian casino founder Lim Goh Tong (The Star pix) has plenty to celebrate although he now looks very frail. On Sunday, he celebrated his 90th birthday. Although he is now in a wheelchair, there is still plenty of public display of filial piety.

According to New Straits Times, second son Kok Thay, who is now the chief of the casino group, helped the father to receive a congratulatory call from Prime Minister Abdullah Ahmad Badawi. And his 28-year-old grandson Justin Leong, who is Genting’s youngest director, reportedly pledged to donate his salary to charity and receive a token pay of RM1 for one year as a tribute to the old man.

Another sweet piece of news to Goh Tong is the ground-breaking for the Singapore casino project, which was mired in controversy following the deal with Macau casino king Stanley Ho earlier this year. Genting held its ground-breaking ceremony at Sentosa today.

Singapore’s Minister for Trade and Industry Lim Hng Kiang reportedly said that the probity check over Genting's partnership with Stanley is no longer an issue. Regulatory alarm bell went off when Genting tied up with Stanley, who is apparently linked to the triads in Macau, in the Sentosa resort and casino project. Genting has since severed its link to Stanley in the Sentosa project. But probity check on any new casino project in Singapore is still needed going forward as the actual casino licence will only be issued when the integrated resort project is substantially completed.

Can the new Genting generation be as steady as the old man? The Stanley Ho episode shows that Genting’s younger generation will still need to tread carefully although its Singapore casino project is now back on track.

Singapore Images in 2006

Some images of 2006 captured by The Business Times of key business and political events in Singapore and business deals linked to Singapore entities overseas.

Big stakes, buoyant sentiment
By VINCENT WEE

2006 was a year of big numbers, big stakes and bullish sentiment. The resurgent economy brought waves of investment and optimism to our shores, but also winds of change. Meanwhile, those who strayed from the straight and narrow were brought to account as the law took its course.

One of Singapore's biggest financial scandals finally came to a conclusion when former China Aviation Oil head Chen Jiulin was jailed for four years and three months and fined $335,000 for insider trading. Likewise, former corporate poster boy Victor Tan, founder of Accord Customer Care Solutions, was jailed for four years and three months for his role in trying to cheat Nokia in 2003 and 2004. And former National Kidney Foundation boss TT Durai was charged under the Anti-Graft Act for having tried to deceive the NKF while he was its chief executive.

But a sense of stability prevailed when the ruling People's Action Party won 66.6 per cent of the vote in the May general election and was returned to power.

Big buys also made the news, led by Temasek Holdings' $6.5 billion purchase of an 11.55 per cent stake in Standard Chartered Bank from the family of the late Khoo Teck Puat, who was Singapore's richest man, and $3 billion spent on former Thai prime minister Thaksin Shinawatra's family stake in Shin Corp.

Apple's US$100 million payout for a licence to use Creative Technology's patent in its iPod ended legal disputes between them. The battle hit Creative's profits badly, but the settlement looks like a win-win result, and the local firm will focus more on making sound chips and accessories for Apple and other companies.

Waves of interest and winds of change from abroad came in through the course of the year. In May, Las Vegas Sands won the right to build Singapore's first integrated resort (IR) and casino at Marina Bay. And six months later, Asian gaming outfit Genting International/Star Cruises won the Sentosa bid. The year's foreign buzz culminated in the 16,000 visitors and delegates coming to Singapore during the International Monetary Fund and World Bank meetings in September.

The buoyant economic mood was infectious and spread to the property market, which finally got some reprieve from a decade of gloom when the luxury residential segment saw record prices, led by Marina Bay Residences which commanded up to $3,500 per sq ft in December.

Movements in the boardroom also created a stir. Robinson's chairman Michael Wong Pakshong was voted off the board at the company's annual general meeting, prompting the resignation of three other independent directors and sparking a debate on the role of independent directors. SingTel CEO Lee Hsien Yang surprised markets in July when he announced that he would step down after 12 years with the company.

Finally, the year closed with an ominous reminder of our vulnerability in the Information Age, when a post-Christmas quake off Taiwan damaged vital undersea cables and disrupted telecommunications in and out of Singapore and throughout East Asia.

March 27: Temasek hogs headlines
Singapore investment company Temasek Holdings spends almost $10 billion on two big buys. On March 27, it announces an estimated $6.5 billion purchase of Khoo Teck Puat's estate's 11.55 per cent stake in Standard Chartered. Earlier in January, Temasek paid $3 billion for Thai Prime Minister Thaksin Shinawatra's family stake in Shin Corporation. The Shin deal sparked unexpected events that eventually led to a military coup that ousted Mr Thaksin.

April 18: TT Durai charged with graft at NKF
Former National Kidney Foundation (NKF) chief TT Durai is slapped with two charges over alleged false claims with intent to deceive the foundation. The NKF fiasco has brought about unprecedented scrutiny of charitable organisations and their accountability.

May 6: PAP returned to power
The People's Action Party is returned to power with two-thirds of the valid vote at the general election. The closest fight is in Aljunied GRC, where the PAP wins 56.1 per cent of the vote in a contest with the Workers' Party. The opposition retains Hougang and Potong Pasir.

May 26 and Dec 8: Singapore hands out casino licences
Singapore awards two integrated resort and casino licences after a 40-year ban on casinos. The first licence, at Marina Bay, goes to Las Vegas Sands, controlled by Sheldon Adelson, who has roped in architect Moshe Safdie (top) for the project. The second, at Sentosa, goes to Malaysia's Genting group, controlled by Lim Kok Thay and family.

July 21: Lee Hsien Yang announces decision to step down
Lee Hsien Yang surprises the markets by announcing that he will step down as SingTel's chief executive officer after 12 years with the company. After a two-month global search, SingTel appointed its chief financial officer Chua Sock Koong as CEO.


Aug 23: Creative versus Apple
Apple agrees to pay US$100 million for a licence to use Creative Technology's patent in its iPod. And as part of the settlement, Creative, founded by Singapore businessman Sim Wong Hoo, joined the ''Made for iPod'' programme to produce accessories for Apple's mp3 player.


Dec 13: Irrational exuberance reigns at Marina Bay Residences
After a downturn that lasted a decade, the upper end of the property market rebounds. The best performer is Marina Bay Residences, where all 422 units were quickly sold at unprecedented prices of up to $3,500 per sq ft. Prices at the 99-year leasehold project, located near Las Vegas Sands' upcoming integrated resort and casino, even surpassed those of some units at the 999-year leasehold St Regis Residences in the Tanglin area.


Sept 10-20: IMF and World Bank meetings bring in 16,000 visitors
With a campaign of four million smiles, and tens of thousands of flowers lining the route to Suntec City convention centre, Singapore lays on a grand welcome for visitors and delegates to the IMF/World Bank annual meetings.

Sizzling Red Dot

A very useful map in The Straits Times of what's hot and what's not in the Singapore private residential property market.

Although only a small part of the island is currently in red to show the hot property interest, it won't take too long before the property fever spreads to the rest of the island.

The little red dot is definitely sizzling with the massive inflow of funds into property and private wealth sector. And the two upcoming integrated resorts and casinos -- Las Vegas Sands at Marina Bay and Genting-Universal at Sentosa -- will definitely add more sizzle to the island's already hot economy.

Singapore is definitely fast becoming Asia's Switzerland, or even more in the next five to ten years.

Genting Bags Sentosa Casino and Resort

(Picture Source: The Business Times, Singapore)

It didn't come as a surprise. Genting-Universal has bagged the integrated resort project with casino at Sentosa. Dad picked the IR winner again, as predicted in an earlier posting. Other postings on Sentosa IR race.

What came as a surprise was the revelation that Genting has a 30-year exclusivity arrangement with theme park giant Universal in Southeast Asia, which has a combined population size of 500 million people.

This means Universal cannot build another theme park in Indonesia, Thailand, the Philippines, or Malaysia, which has been courting Universal for some time, in the next three decades.

Big Singapore Tourism Bet

The Singapore tourism engine will be firing on all cylinders in the next few years as part of the plan to boost tourist arrivals to 17 million from 9 million in less than a decade. The 9-million mark was reached yesterday amidst much fanfare, according to the ST report today.


(Picture Source: The Straits Times, Singapore)

Dec 7, 2006 Tourism booms as arrivals hit nine million
By Krist Boo & Lim Wei Chean
BLEARY-EYED Russian tourist Elena Vladykina was taken aback by the orchid garlands and noisy drumming and dancing that greeted her on her 6am arrival at Changi Airport yesterday.

Then she realised she was being welcomed as Singapore's nine-millionth visitor -- a sweet ground-breaking number that caps a year of new records for Singapore's tourism industry. Last year, the island received 8.9 million visitors.

Yesterday, there was much to celebrate for the Singapore Tourism Board (STB), whose senior executives turned up at the airport to welcome Dr Vladykina, 29, after her 14-hour flight from Moscow. She was whisked off in a limousine with $35,000 worth of hotel, shopping and other vouchers.

It took Singapore just two years to leap from eight million to nine million visitors, said STB's assistant chief executive for leisure, Dr Chan Tat Hon.

The seven-millionth visitor was welcomed in 1995, but it took almost another 10 years before the eight-millionth showed up in 2004.

The tourism Singapore target now seems a tad conservative if the two integrated resorts and casinos -- Las Vegas Sands' Marina Bay and Sentosa -- can achieve their targets.

The next big news will be the decision on the winner of the Sentosa project -- widely expected to be made tomorrow -- to help achieve the Singapore tourism goal. All three bidders -- Genting-Universal, CapitaLand-Kerzner and Eighth Wonder -- have each promised to deliver more than 10 million extra visitors to Singapore.

And there is still last-minute lobbying, as seen in two letters published in ST today, by fans of the two front-runners for the Sentosa IR project -- Genting-Universal and CapitaLand-Kerzner.


A Genting win will benefit Singapore
I REFER to the articles, 'Harry's Island at cinemas worldwide?' (ST, Nov 30) and 'Free nightly show, says Eighth Wonder' (ST, Dec 1).

Having resided on both sides of the US continent for seven years, I wonder if Eighth Wonder or, for that matter, Kerzner-CapitaLand can attract the tourist numbers that Singapore wants.

Very often, visitors would want me to spend time with them at Disney or Universal Studios and, to a lesser extent, Six Flags or Sea World. Hardly anyone would care to visit Getty Center, Guggenheim, Atlantis or, for that matter, the Volcano at Las Vegas.

Most would want to have a fun day for themselves and their families at Disney and Universal Studios. Not many would want to get wet. Hardly anyone would want to gawk at architecture.

At Disney and Universal Studios, you can see their smiling faces, and feel their excitement. Universal Studios is a very recognisable name.

Genting's partner, Star Cruises, the third largest in the world, could use Singapore as a hub for their guests.

The other two contenders lack this and an attraction like Universal Studios. Can you imagine Universal Studios and the cruise business going to one of our immediate neighbours? Disney may or may not come in later.

If Genting wins, Singapore wins - if tourism is what Singapore values.

Lau Chee Kian

Go for the iconic, avoid the insipid
I REFER to the article, 'Sentosa IR race: Who will win?'' (The Sunday Times, Dec 3). I find the writer's take on which bidder will be selected to develop the Sentosa integrated resort very economical and safe.

No doubt, this approach has worked well in Singapore many times. It will give us a resort that is packed with features, economically optimised, comfortable to most, but insipid and hardly iconic.

The decision this time round is like no other. In our quest to be a truly global city and our search for the 'wow' factor, we can afford a little risk, trade a little function for aesthetics, economics for uniqueness, and familiarity for icons.

Hence, my choice would be Kerzner/CapitaLand's bid. Where else in Asia can one find another Frank Gehry work and a robotic wonderland?

This is not only 'magical' but will also appeal to a wider group of people and be more sustainable in the long run than a football school, a cooking school when we are hardly a culinary capital, a marine research institute far away from the ocean, maritime museum or another ultra-large hall.

To attract the tourist numbers the Singapore Tourism Board hopes to achieve, we need more than just the Sentosa IR.

We can have the 'usual' theme park at Marina East, collections of boutique hotels at the Southern Islands, celebrated chefs /restaurants doting the city and perhaps another Request for Proposal for the central promontory.

Let's see the Sentosa bid not as a single commercial decision, but with the perspective of recreating Singapore.

We need to seek for Sentosa what we could not have done in another site in Singapore, and bearing in mind that an offering like Frank Gehry's is available only this time round.

Ong Phui Luong

The Genting Story

Raffles Conversation in The Business Times, Singapore, today:

RISE OF THE GENTING SON
New Genting chief Lim Kok Thay tells EDDIE TOH why it is necessary for him to raise the ante since he took over control of the group from his father

LIM Kok Thay has clearly emerged from the shadow of his famous father, Lim Goh Tong, who founded the sole casino group in predominantly Muslim Malaysia four decades ago.

The younger Lim has shed his shy persona and is firmly in charge of the sprawling Genting group, which will make its biggest investment ever in Singapore should it clinch the licence to develop the second integrated resort with casino on Sentosa at a cost of more than $5 billion.

His new-found confidence is reflected in his markedly different management style from his 89-year-old father, who passed the baton to his second son four years ago. The younger Mr Lim is also ready to talk more about his family - one of the richest in Malaysia - whose wealth tops US$2 billion.

For a start, Mr Lim, 54, is less averse to resorting to borrowing to help the Genting group expand in the global arena, quite the opposite of his father, whose distaste for bank loans is well-known.

'He started from scratch and built a local business and gave us a good platform to springboard from,' the younger Mr Lim tells BT during a three-hour conversation in his Singapore office at Park Mall last week.

'Going global needs a different set of skills and mindset - one of which is more risk.'

'You need to gear up more. My father would be dead against not just over-gearing, even gearing,' he explains.

He quips: 'He's losing more sleep than I, worrying about my gearing!'

But Mr. Lim's company is nowhere near over-geared. Although borrowings of once debt-free KL-listed Genting Bhd have more than doubled to RM2.5 billion (S$1.1 billion) since he took over full control from his father, its gearing ratio is low at less than one-third of its shareholders' equity. The only exception is capital-intensive Star Cruises, which is still going through a rapid expansion phase.

Such is the confidence of the new casino kingpin, who learnt the ropes in the casino business quite early on. He was about 17 when his father clinched the casino licence against all odds in the mid-1960s.

Being closely involved with his father's business for the last three decades, he has naturally honed his business acumen. Like his father, Mr Lim is a visionary businessman with big business ideas and the same never-say-die trait.

He wants Genting to be one of the three gaming giants in terms of revenue with a global, rather than regional, footprint. 'We can achieve our vision even without Singapore. Of course, with Singapore, it becomes an even stronger network,' he declares.

A strong foundation in the family business has helped Mr Lim oversee Malaysia's most popular tourist destination ever since he graduated with a Bachelor of Science (Civil Engineering) from University of London in 1975. He obtained a management degree from Harvard Graduate Business School in 1979.

One of his early tasks was the migration of the casino from the basement of a small hotel to a bigger hotel at the Genting Highlands resort, which is located 58 km from the Malaysian capital.

The father of three doesn't hold back when discussing the fortunes of the group, which has a total market capitalisation exceeding RM50 billion, with assets in Malaysia, Singapore, Hong Kong and the United Kingdom.

They include the Malaysian casino and resort business under Resorts World; regional cruise business under Star Cruises; newly acquired UK gaming and casino business under Stanley Leisure and Maxims; Malaysian plantation under Asiatic Development; power generators in Malaysia, India and China; and oil and gas exploration ventures.

Two common themes are still present in all the group's new business considerations - high capital expenditure to ensure high barriers to entry, and an expected internal rate of return of at least 15 per cent for each business segment. Mr Lim says he won't look at projects that generate returns of less than 15 per cent.

One of his biggest bets was Star Cruises. He convinced his father to take the plunge into the cruise business in the early 1990s, instead of ploughing the group's earnings into their hotel business. The senior Lim agreed after they witnessed the tourism appeal of cruise liners in the Bahamas and Miami. The Lims felt more Asians would turn to cruises as a form of recreation as their income rose.

Their bet turned out to be correct. From an initial pair of small ships acquired from a troubled Swedish ferry operator, Star Cruises has emerged as the third largest cruise operator in the world with a combined fleet of 20 ships.

But the rapid expansion has come at a hefty cost. Star Cruises, which is listed in Hong Kong and quoted on Singapore's Clob International, has seen its borrowings balloon to nine times its Ebitda (earnings before interest, taxes, depreciation and amortization), according to rating agency Standard & Poor's.

S&P has given Star Cruises a BB- rating, which is considered junk status due to its risky credit profile. Ratings of BB and below are considered junk or risky to credit rating companies, which assign ratings of BBB and above to healthier borrowers.

Star Cruises' highly leveraged position has naturally raised questions about its ability to partner sister company Genting International for the Sentosa project, which will require fresh borrowings of at least $3 billion.

But Mr Lim is unperturbed, citing Star Cruises' continued ability to service its debts. High gearing is necessary to help the young company keep up with more established rivals such as Royal Caribbean and Carnival, he argues. 'I don't set the pace in the cruise business. If I don't follow I will be left far behind,' he says.

He is proud of the group's overall financial strength despite the borrowing weight on Star Cruises, saying that bankers are quite happy with the core business of the group.

For instance, Genting Bhd - the ultimate holding company of the conglomerate - is accorded a strong rating of BBB+ by S&P. 'All gaming companies are junk except Genting,' Mr Lim declares.

And Mr Lim pooh-poohs nagging perception that Genting is a third-rate resort owner in Malaysia. 'People say we are a Third World gaming facility but how come we have first-class rating?' he argues.

He is also banking on the group's impeccable track record to help clinch the Sentosa IR project. 'We believe we have presented an iconic bid,' he says, heaping praises on its world-class partners and renowned American architect Michael Graves.

Mr Lim believes he has two trump cards - the partnership with movie and theme park icon Universal Studios and DreamWorks, a movie animation company co-founded by legendary Hollywood director Steven Spielberg.

He says Genting would not have been able to team up with such big names if it had remained a domestic business. 'If you had not gone global, people like Universal and Spielberg will say: 'Who are you?'' he says.

Mr Lim says DreamWorks - responsible for blockbusters such as Madagascar, Shark Tale and Shrek 2 - will be a 'catalyst' in the Genting-Universal blueprint for the 49-ha Sentosa IR project.

In a statement to BT, DreamWorks disclosed that its digital animation studios - with a floor area of 1,400 square metres - will 'give visitors a peek 'behind the scenes' to learn how film animators are using state-of-the-art computer technology to create some of today's most popular films.'

More importantly, the new Genting chief feels that it will be a breeze for his consortium to make good the promise to deliver up to 10 million people to Sentosa to help Singapore exceed its tourism target of 17 million visitors by 2015. Under 10 million tourists visit Singapore currently.

'I don't think anyone else can boast about such actual numbers,' he says, adding, as an example, that Singapore will almost achieve its tourism target overnight should Genting and partners shift a mere 10 per cent of their current customer base to Singapore.

Genting, Stanley Leisure and Star Cruises catered to nearly 25 million local and foreign visitors last year - more than the 17 million tourists to Malaysia last year. Universal's theme parks in Orlando, Los Angeles, Japan and Spain collectively attracted more than 46 million visitors last year.

But Mr Lim is not interested in simply shifting the cards around. He says he wants to create a brand new world-class destination that will compete with the best resorts in the world for new visitors.

The odds are in his favour. Analysts have touted Genting as the front-runner for the Sentosa project despite stiff competition from CapitaLand-Kerzner and Eighth Wonder. Genting and CapitaLand both failed to clinch the Marina Bay IR project earlier this year.

Clinching Sentosa will definitely be a boost to Genting although it may affect its own highlands casino on the border of the Malaysian states of Selangor and Pahang, analysts say.

But it may be no bad thing if its highlands casino is affected. Perhaps mindful of the perennial call by some Muslim politicians to shut down the sole legal casino in the country, Mr Lim says the group plans to reduce its dependence on its Malaysian gaming business over time by constantly diversifying into other businesses.

Although he has played a key role in turning Genting into a global player, he still sticks to his father's simple philosophy in life. 'Reputation and trust are more important than money,' he says.

The new casino tycoon adds: 'We cannot create the wrong impression. Once we create the wrong impression, it will continue to haunt us.'

The savvy gambler

THE second son of Malaysian casino tycoon Lim Goh Tong readily admits that he is a gambler.

'Life is full of gambles but I'm not a hard-core gambler,' quipped Lim Kok Thay (right in the pix), who took over the helm of the Genting group following his father's retirement four years ago. Instead, the social gambler has turned the Malaysian gaming business into a fine art due to his passion for the business.

Kok Thay, 54, is the only child of the patriarch who has remained in the huge group. A relative in the group is Justin Leong, who is the son of Kok Thay's sister Siew Lian. Mr Leong is head of the group's strategic investments and corporate affairs.

Younger brother Chee Wah, who was once the joint managing director of Genting with their father in the early 1990s, is now running Hong Kong-listed property investment and financial services company VXL Capital.

Chee Wah apparently quit Genting due to differences with their father but Kok Thay dismisses the rumour, saying his brother preferred to dabble in other businesses.

Eldest brother Tee Keong quit as Genting director in the late 1990s. He was subsequently embroiled in a messy suit with two partners over personal stock market losses of over RM38 million (S$16.3 million).

There are also three girls in the family. One of them, Siew Kim, controls listed property company Metroplex, which has been mired in debt since the late 1990s. Genting did not bail out Metroplex despite the family ties.

Genting's success story must be partly attributed to Kok Thay although the empire was founded by his father four decades ago when he clinched a casino licence unexpectedly.

Analysts like the well-run and professionally managed company. The stock has breached RM30 from a low of RM6.40 during the stock market meltdown in 1998.

While Genting has taken correct bets under Kok Thay, his personal bets have been riskier. For example, Kok Thay gave out US$80 million in personal loans at a high interest rate to the Seneca Indian tribe to build a casino in Niagara Falls and acquired a substantial stake in troubled Malaysian lottery operator Mycom.

But Kok Thay is not taking any unnecessary risk with his listed group or its prized Malaysian casino licence, which has to be renewed quarterly by the Finance Ministry. He refuses to disclose the actual fee for each quarterly renewal of the licence but admits that it is now a 'substantial' amount.

But he does not see it as a hindrance, saying that it helps the group's cashflow to pay the government every three months instead of paying one big lump sum at the end of each year.

Nevertheless, he is constantly scouting for fresh businesses to help cut the group's over-dependence on the Malaysian gaming business, which generates two-thirds of its revenue.

'I gamble socially. But I only take calculated risks in business,' Kok Thay adds.

The Lim Family of Genting

In The Business Times, Singapore, today.

The savvy gambler


THE second son of Malaysian casino tycoon Lim Goh Tong (left in the pix from his autobiography) readily admits that he is a gambler.

'Life is full of gambles but I'm not a hard-core gambler,' quipped Lim Kok Thay (right in the pix), who took over the helm of the Genting group following his father's retirement four years ago. Instead, the social gambler has turned the Malaysian gaming business into a fine art due to his passion for the business.

Kok Thay, 54, is the only child of the patriarch who has remained in the huge group. A relative in the group is Justin Leong, who is the son of Kok Thay's sister Siew Lian. Mr Leong is head of the group's strategic investments and corporate affairs.

Younger brother Chee Wah, who was once the joint managing director of Genting with their father in the early 1990s, is now running Hong Kong-listed property investment and financial services company VXL Capital.

Chee Wah apparently quit Genting due to differences with their father but Kok Thay dismisses the rumour, saying his brother preferred to dabble in other businesses.

Eldest brother Tee Keong quit as Genting director in the late 1990s. He was subsequently embroiled in a messy suit with two partners over personal stock market losses of over RM38 million (S$16.3 million).

There are also three girls in the family. One of them, Siew Kim, controls listed property company Metroplex, which has been mired in debt since the late 1990s. Genting did not bail out Metroplex despite the family ties.

Genting's success story must be partly attributed to Kok Thay although the empire was founded by his father four decades ago when he clinched a casino licence unexpectedly.

Analysts like the well-run and professionally managed company. The stock has breached RM30 from a low of RM6.40 during the stock market meltdown in 1998.

While Genting has taken correct bets under Kok Thay, his personal bets have been riskier. For example, Kok Thay gave out US$80 million in personal loans at a high interest rate to the Seneca Indian tribe to build a casino in Niagara Falls and acquired a substantial stake in troubled Malaysian lottery operator Mycom.

But Kok Thay is not taking any unnecessary risk with his listed group or its prized Malaysian casino licence, which has to be renewed quarterly by the Finance Ministry. He refuses to disclose the actual fee for each quarterly renewal of the licence but admits that it is now a 'substantial' amount.

But he does not see it as a hindrance, saying that it helps the group's cashflow to pay the government every three months instead of paying one big lump sum at the end of each year. Nevertheless, he is constantly scouting for fresh businesses to help cut the group's over-dependence on the Malaysian gaming business, which generates two-thirds of its revenue. 'I gamble socially. But I only take calculated risks in business,' Kok Thay adds.