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Arthur Sim: There have been optimistic projections on Marina Bay Sands' (MBS) contribution to the economy. Are these achievable?

Sean Monaghan: One thing to keep in mind is that people often compare new projects to existing ones. The problem is that there hasn't been anything in Singapore similar in scale to the Marina Bay project. So people say, 'there isn't the demand'. But how can there be quantifiable demand for something that does not currently exist? An easy way to comprehend just how successful the Sands property is, is to look to Macau. Their temporary Sands Macau property has created a market which really hadn't been addressed before, and Sands has done the job beyond expectations.

Jonathan Galaviz: We expect the integrated resort (IR) at Marina Bay will make a substantial contribution the growth of Singapore's GDP in the coming years. It is likely that the IR's contribution to the GDP will be non-linear, particularly during the first three years of operation.

Factors that will contribute to this are events such as the grand opening, overall seasonality, and other patterns of regional macroeconomic performance. There is a strong possibility that the IR at Marina Bay can contribute one per cent of Singapore's GDP by 2010. This figure is broadly achievable, but primary economic performance at the IR must be very strong and the economic multiplier effect from the IR must be robust.

Warren Buckley: Given the impact of a 2,500-room hotel, the level of retail proposed, the gaming visitors and the positive impact from the MICE (meetings, incentives, conference and events) business, they could conceivably exceed the forecasted one per cent. Industry estimates suggest that the MICE visitor often spends two to three times what a leisure traveller would spend. But I would say that every MICE visitor is unique, and each convention or exhibition attracts a different crowd with a variety of spending power, and that diversity would help add to the breadth and depth of an already dynamic MICE industry in Singapore.

Lim Lan Yuan: The contribution of MBS is not only confined to MICE visitors. The entire development process - from planning and design, construction to management stages - will also provide positive contributions to the economy. In addition, on completion of the project, the attraction of tourists and other visitors to the gaming facilities and MICE visitors will further contribute to the economy.

Nicholas Mak: The economists who made these projections based it on certain assumptions and they have their reasons to do so. So far nobody has shown other projections. So we can accept this available projection. This extra boost to the GDP growth is not solely from MICE visitors, but could be contributed by construction, additional jobs and income generated, increase in foreign visitors and spending.

Business visitors generally spend more than other types of visitors. They make up about a quarter of visitor arrivals. But their total spending is about a third of tourism receipts. So an expected increase in MICE or business visitors would contribute to an increase in GDP.

Arthur: Las Vegas Sands has said it will employ 10,000 Singaporeans. Based on the number of foreigners in the service sector, how many Singaporeans do you expect will be employed? A further 20,000 jobs are expected to be created indirectly. What sector of the industry do you expect this to be in?

Jonathan: It is likely that at least 60 per cent of the staff directly employed at the IR will be a combination of either Singapore citizens or permanent residents. Due to the IR business model being new in Singapore, it is likely that a good amount of foreign talent that is already familiar with the IR industry will be required to work at the IR, at least in the early years. We believe the majority of the primary jobs created at the IR will be mid-level service related, primarily in the hotel and convention centre areas, not necessarily the casino gaming operations.

Industry sectors that are primarily service and outsource-driven should be the primary indirect beneficiaries of the economic activity at the IR. These services could include businesses such as large-scale commercial laundry outsourcing services and food and beverage suppliers, to name a few.

Lau Chuen Wei: As Singapore's unemployment rate continues to decline, workers will likely be even more selective about the jobs they accept. Already, the service sector suffers from a misperception that it is only for the lowly educated, for those who cannot find anything better and for those willing to take it on as a transient measure till something better comes along.

What is less known is that jobs in the service sector stretch over a wide spectrum. They include very challenging jobs that require quick thinking, strong interpersonal skills, initiative... They need people who are good with figures, people who are ready to think out of the box, people who have a good sense of detail and follow-through, people whom others can rely on. It also includes jobs that require people with the stamina to perform repetitive tasks with diligence, people who take pride in the seemingly mundane and tiresome tasks that are essential to making life experiences so much more pleasant for everyone. In short, the service industry requires people who care about others.

Training and re-training the current workforce is but one way to accomplish this.

The other, but just as important issue is finding the right people with the right attitudes in the first place. Skills can be trained. Attitudes have to be cultivated. And cultivation of such attitudes must begin early, not only when one leaves school and enters the workforce.

Whether there are sufficient Singaporeans who can fill these shoes is a very big question. If this can be accomplished, that would be ideal. If not, the doors may need to be opened to more foreigners who can help us offer a level of service that is among the highest in the world, as this will be what is required once the integrated resorts are up and running.

Lan Yuen: There are a variety of job opportunities from Sands, some of which are better performed by locals. These include jobs which do not require specialist skills. Another factor to be considered is the more costly wage package for foreign talent. Hence, Singaporeans stand a good chance of being employed.

Jobs are likely to be created in any industry associated with the establishment of an IR besides those that are tourism-related. They can include maintenance, security, human resource, printing, real estate...

Warren: A casino of this size with a 2,500-room hotel will want to employ a very large number of local Singaporeans. Dealers, croupiers as well as hotel staff will be well trained within a 'well-oiled' service culture with local knowledge and customs beneficial to the operator. I believe the IR will 'rewrite the book' on the service sector making it more attractive for local Singaporeans to be part of it.

Sean: The Marina Bay Sands is a massive catalyst for so many other hotel, leisure, residential, office, retail projects. These mega projects give other investors the confidence to say, 'Yes, I will bring forward my new development because my outlook for Singapore is simply better'. Louis Sailer: Perhaps we should first determine what these positions are and if they are positions Singaporeans are ready to take on. Equally important is if the current workforce is trained for them. Each position has to be a right fit for the individual Singaporean talent if they are expected to enjoy, excel and grow in their roles. If we know these positions now and what their requirements are, we can get the Singaporean workforce ready. Certainly, we can be optimistic that close to 10,000 Singaporeans would be employed by Las Vegas Sands.

Arthur: In terms of building and construction contracts, do you think Singapore firms will gain from MBS?

Lan Yuen: Singapore firms have accumulated valuable experience in constructing mega projects in the past and have the necessary expertise to do so. Even if overseas firms secured the contracts, they will need to rely on local contractors and suppliers for project delivery. It would not be correct to say that the trend is for construction jobs to go to foreign firms. Local firms have also secured a fair share of major construction jobs.

Wan Chee Hong: Singapore firms can still benefit from the spillover effects. I think international consortiums will be engaged as the management contractor as they have the financial resources to fulfil the performance bond requirement. The management contractor will in turn break down into smaller portions of sub-contracts where Singapore firms can participate.

Arthur: Do you expect Sands to have more non-equity partners? Will the involvement of City Developments mean that there could be more jobs for Singapore companies?

Nicholas: It is likely that there could be more non-equity partners. Whether there could be more jobs for Singaporean firms does not necessarily depend on whether City Developments is involved or not - although I think it could help. The decision lies with Sands and who it thinks is the most suitable party for the job. After all, Sands is answerable to its stakeholders.

Lan Yuen: It will depend on whether Sands has existing partners for other components of MBS. The involvement of City Developments is not likely to affect the decision on whether to engage foreign or local companies. The important factor is likely to depend on the nature and complexity of the jobs concerned.

Warren: I believe they will announce several ongoing equity partners. Sands may consider entering into a management contract for the hotel rooms and may even consider three separately themed hotels with separate management contracts with different hotel operators. Other non-equity contracts will be also announced for F&B outlets and entertainment concepts. The convention centre will obviously be operated by Sands as this is clearly their area of expertise.

Jonathan: In order for Sands to fully execute its plans, it will require various providers of strategic services in the areas of entertainment, museum management, nightclub management, and other aspects of the IR business model in which it may not have a core competitive competency.

Arthur: Building costs have increased lately. How will this impact the construction of MBS? If there are cost overruns, will this have any long-term impact on its viability?

Sean: This will be a highly competitive bidding process for the construction projects. When Sands put in its bid they used many consultants who would have acknowledged potential areas of risk such as rising construction costs. There would be buffers in their estimates to address such risks and I am sure the government would also have looked at this as well. Sands has enormous capacity to fund such a development.

Lan Yuen: Most building material prices - steel, iron ore, cement and possibly wages - are likely to rise following the anticipated recovery in the construction sector. This is similar to other costs which are expected to rise with the improved economic growth. Despite this, construction cost is only one component of the IR development. Also, Sands is likely to have already factored these cost increases into its bid proposal. If the development period can be contained or shortened, then the risk is reduced.

Chee Hong: Material costs have increased. But Sands can always budget for this as I believe contingencies have been allowed. On viability, Sands would have done their sums including calculating the pay-back period.

Nicholas: I don't think that the cost of construction would rise so much that it would stop the IR project. In the worst case scenario, it could extend the breakeven period slightly.

Arthur: What will the impact of rising interest rates be on MBS?

Sean: Short term interest rates have risen but the long end hasn't moved much. Sands has excellent capability to tap large investment banks, and it will arguably have the cheapest cost of capital of any casino company due to its size and prudent financial structure.

Jonathan: While interest rates are on the rise globally, it is likely that these increases are marginal in nature and will not substantially impact the financial profile of the project. Obviously such risk elements will be considered in full by global capital markets as Sands completes its financing package.

Lan Yuen: In general, rising interest rates will have an adverse impact on the financing costs of projects. The extent of the rate hike is critical. However, if Sands has alternative cheaper financing sources, the impact may be reduced.

Warren: Interest rates rise and fall with economic cycles and this is a business reality for all. With today's multitude of financing options and with Sands' clout, there surely would be enough ways to hedge any potential rise in costs.

Arthur: Based on average construction costs, how much will a development the size of MBS cost?

Lan Yuen: Based on the development cost of $3.8 billion and a gross floor area of 570,000 square metres, the construction cost will be about $6,700 psm. This is within the high-end range of construction cost for a five-star hotel with theatres, retail facilities... Of course, the cost of development will depend on the special features and complexity of the design and construction.

Chee Hong: Construction costs could perhaps be in the range of $3,000-$4,000 psm.

Arthur: Sands has committed to complete the MBS by 2009. Based on other large scale projects, how intensive do you expect the work schedule to be?

Jonathan: Completing a project of this magnitude, on reclaimed land, by 2009 will require a very intensive construction timeline and will likely require around-the-clock construction in order to finish 100 per cent of the project in the promised timeline. We believe that execution risk - completing the project on time - is the single largest risk factor for Sands.

Nicholas: In the end, the work schedule and completion time are man-made estimates. They could change over time, and this has happened very often in big, complicated projects.

Chee Hong: Sands can always stipulate the time for completion in the tender/negotiated contract with suppliers and contractors. It is up to tenderers to price this. And of course, contractors can work on shifts round the clock to meet deadlines.

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