MBS expansion costs exceed estimates amid delays and challenges

The costs of the Marina Bay Sands expansion will surpass the estimated SG$4.5bn (US$3.32bn) due to inflation and market factors.

Singapore.- Las Vegas Sands Corp, the parent company of Marina Bay Sands (MBS), has revealed in its recent half-year report that it anticipates costs for the expansion of the Singaporean complex to significantly surpass the SGD4.5bn (US$3.32bn) estimated in its 2019 agreement with the government of Singapore.

The company says inflation, material and labour expenses and other factors have led to higher costs for work on the hotel expansion. Timeline disruptions caused by the Covid-19 pandemic prompted a supplementary agreement earlier this year, extending the project’s start and completion dates.

Las Vegas Sands Corp had spent around US$1.07bn up to June 30, including expenses for leasing the land for the project. The company says it remains committed to the project which includes an additional hotel tower with luxury accommodations, a rooftop attraction, convention facilities and a live entertainment arena.

However, Las Vegas Sands Corp was unable to deliver an updated construction cost estimate and schedule to lenders, temporarily halting further financial draws from the delayed draw term facility. The company clarified that significant spending related to the expansion project is unlikely before it delivers the documents to lenders.

Meanwhile, Marina Bay Sands has completed the development of over 850 hotel rooms in Towers 1 and 2. The newly configured rooms and suites are part of the US$1bn renovation project announced separately last February. Work is expected to conclude by the end of 2023.