Builder faces .5M daily penalty
The $4.1 billion Wynn Palace resort, now under construction on Macau’s Cotai Strip, may not open on June 25 as planned, according to a filing by Wynn Macau Ltd.
The resort’s grand opening was originally scheduled for March 25, then pushed back by 90 days. Now it looks like it will be delayed again, GGRAsia has reported. The builder, Leighton Holdings, which already lost out on a $38 million bonus due to the first delay, could be looking at a $1.5 million daily penalty if it fails to complete the project on time by the end of June.
In a note, Deutsche Bank Securities Inc. said it expects a “mid-third quarter 2016 opening” for Wynn Palace. “While the announced date remains June 25, we continue to feel more comfortable with a buffer for further delays in the model,” said analysts Carlo Santarelli and Danny Valoy.
There could be some legal wrangling between the operator and the general contractor if the resort doesn’t open as planned. In its March 31 filing, Wynn Macau noted that Leighton “has expressed its commitment to the completion of the project by the required date, but has advised us that they dispute our assessment of liquidated damages.”
It’s a massive project: when complete, the Wynn Palace will feature 1,700 hotel rooms, a lake with gondolas, a meeting space, a casino, a spa, restaurants and retail outlets. The resort will face competition from other resorts in the region including Galaxy Entertainment’s Phase II and Broadway expansions; Melco Crown Entertainment’s new Studio City, which opened in October; and other lavish resorts now under construction by Las Vegas Sands Corp. and MGM Resorts International.
