Pagcor firm on hotel prerequisite for Entertainment City investors | Inquirer Business

Pagcor firm on hotel prerequisite for Entertainment City investors

Gaming to comprise only 7.5% of project
By: - Business News Editor / @daxinq
/ 09:40 PM August 01, 2011

The state-owned Philippine Amusement and Gaming Corp. (Pagcor) is standing pat on its new policy requiring each major investor in its proposed Entertainment City project to put up a sizable hotel before they could be allowed to launch their gaming operations.

In an interview with the Inquirer, Pagcor vice president Francis Hernando stressed that the position of the state-run gaming agency—which he said was meant to aid the country’s tourism program—would remain despite objections from some quarters.

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“Pagcor’s position remains firm,” Hernando said, explaining that the new administration at the agency imposed the policy to ensure the quality of the undertaking, especially in terms of achieving the scale needed to draw in international tourists.

“The success or failure of Entertainment City hinges on the kind of development that investors put up,” he said. “It requires critical mass if they want to attract people from abroad.”

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The Entertainment City project was conceived by the previous Pagcor administration and, at one point, was estimated to be worth as much as $20 billion when all projected investments were tallied.

Hernando said no recent measure of the project’s total investment value has been tallied by the new administration, but opined that the $20 billion quoted by their predecessors at the gaming agency “may be on the high side.”

Last week, Leisure and Resorts World Corp. (LRWC) expressed hopes that it would reach a compromise with Pagcor over the 800-room hotel prerequisite for opening casino operations.

One alternative proposal from LRWC—the joint-venture partner of Belle Corp. in the “Belle Grande Manila Bay” casino project—is a higher toll on the local gaming market, company officials said.

Hernando said the agency has yet to receive a request from any of the four major investors in the project for flexibility on the new requirement, but stressed that the policy was a firm prerequisite, especially since casino operations would only make up a fraction of the project’s total space.

“Gaming will make up only 7.5 percent of Entertainment City’s total floor area,” Hernando said. “The other 92.5 percent will be for everything else, including hotels, residential areas, commercial developments and others.”

According to the official, the current Pagcor board inherited the provisional licenses the previous board granted to the project’s investors and decided to make the contracts “more measurable.”

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“We wanted to include some metrics,” Hernando said. “The licenses were very broad and we wanted to put some order [in them].”

The Pagcor official said that, despite the newly imposed policy, most investors have committed to stay within their proposed project timetables.

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TAGS: Entertainment City, Gaming and casino, hotels, Investments, Pagcor, Philippines
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