November 13, 2006
High stakes for Packer in Singapore
SO DO James Packer and friends have the elusive "wow factor"?
The press attention devoted to the Packers suggests the Australian media thinks so, but in the next month it's not local editors his consortium needs to amaze but a faceless committee of Singapore bureaucrats.
They'll decide in December if they should hand Packer's Eighth Wonder consortium approval for a $5 billion super-casino in the buttoned-up island state, which they want to be a world-class draw to rival the Sydney Opera House for tourist dazzle and reinvent Singapore's staid image.
The plan Eighth Wonder submitted is studded with features designed to drop Singaporean jaws. But will a Deepak Chopra wellness centre and a Pele-endorsed soccer stadium be enough? And even before the bid's merits are assessed, Singaporeans can't decide whether Eighth Wonder has made a political faux pas, or at the least a wry joke at Singapore's expense.
The Packer consortium is calling its extravaganza Harry's Island, named, it says, for a mythical South Seas adventurer who's a little bit Indiana Jones, a little bit 007, a concept that in a modern-day Singapore famous for its illiberal limitations sounds a little like the set of an authoritarian Survivor reality show. "There will only be one Harry's Island," gushed Eighth Wonder's 45-year-old American supremo, Mark Advent, in unveiling the bid last week.
But regional watchers know that Harry's Island is hardly a new idea. That's what Singapore itself has been called for years, a sardonic nod to the Anglicised Christian name of its strongman Lee Kuan Yew. Harry is the moniker the octogenarian LKY ditched soon after his 1950s run for power because the Englishness of his birth name offended his emergent nationalism. Which is why Lee's critics still use it — because they think he doesn't much like it.
But the potential of the term, intended or otherwise, may not be lost on those deciding the Eighth Wonder casino tilt, and such an enormous project will almost certainly be signed off by the family most closely associated with modern Singapore. Whether it matters is a moot point; probably not, but it raises questions as to the advice Eighth Wonder received for its bid.
The Eighth Wonder backers want to transform Sentosa Island, a former Japanese World War II POW camp known in Malay as the "Island of Death from Behind" before Singapore decided that name was too grim so changed it to something suggesting tranquillity. Against stereotype, Singaporeans do have a sense of humour and generations of being politically browbeaten by the Lees have spawned a samizdat irony that the Packer plans must also overcome about Sentosa, that due to the lame amusement parks the Government planted there, Singaporeans regard it as "So Expensive Nothing To See Anyway". They also know Sentosa was a prison for LKY political rival Chia Thye Poh, first jailed without trial by Lee's regime in 1966, and second only to Nelson Mandela as the modern world's longest serving political prisoner on his release in 1998.
The Harry's Island concept imagines luxe hotels from the Starwood Group, a nightly show created by the guy who did the stylish Turin Winter Olympic ceremonies, halls designed by Miami firm Arquitectonica and marine management by the US Woods Hole Oceanographic Institute — all packaged by the team who built the "New York New York" casino in Las Vegas.
Eighth Wonder is regarded as the least favoured of three proposals, with serious "wow factor" competition to overcome. The centrepiece of a bid from Bahamanian-South African casino group Kerzner is a gee-whiz building designed by "starchitect" Frank Gehry, who did for the Spanish port city of Bilbao with his Guggenheim titanium masterpiece what Singaporeans hope a casino will do for their sterile city-state.
The Packer consortium doesn't have a local member, instead joining with the Melco group of the controversial Hong Kong-Macau casino operators, the Stanley Ho family. Kerzner has signed up the Singapore Government-controlled Capitaland as a partner. Its majority shareholder is Temasek Holdings, which is headed by Ho Ching, the wife of Singapore Prime Minister Lee Hsien Loong, "Harry" Lee's eldest son.
And then there is South-East Asia's only proven casino operator, Genting of Malaysia, which has joined with Universal Studios, with a proposal centred on a Hollywood theme park.
Packer's Publishing and Broadcasting Ltd's participation in Harry's Island seems defensive, particularly of the ageing Perth casino asset, Burswood, it bought in 2004. Perth is the Australian city best known by Singaporeans and Malaysia's and Indonesia's ethnic Chinese. Many Singaporeans have houses in Perth and offspring educated at its universities. South-East Asian fondness for the city is highly prized by Burswood.
But the Singapore Government, with manufacturing under pressure from cheaper rivals in booming China and India, is desperate to reinvent the island. It also doesn't like its local wealth leaking to Western Australia, and to Malaysia where Genting is in a similar position to PBL, needing to bid for Singapore's casino to hedge its existing revenue. A super-casino in Singapore could keep Singapore dollars on the island.
Singapore's tilt at the casino business is canny. The proposals are of such a size as to be spectacularly newsworthy while also putting pressure on regional rivals. With world-class attractions keeping gamers in the city-state while drawing fresh visitors, Burswood, Genting and Ho will need to upgrade simply to keep up. For companies like PBL, that means a big investment whether or not it wins next month's Singapore beauty contest.
Eric Ellis is South East Asia correspondent for Fortune Magazine.