Vol. XXII, No. 193 [ BusinessWorld Online ]
Monday, May 5, 2009 | MANILA, PHILIPPINES
DAVAO CITY — A Malaysian firm is proposing to rehabilitate and resume the operations of a mothballed casino resort in Samal Island.
Cleto B. Gales, Jr., Samal’s city administrator, said local officials met with Ekran Berhad Holdings Chairman Pek Khiing Ting and his son Michael Ting late March in Kota Kinabalu to discuss the company’s plans.
Ekran Berhad plans to link the $300-million Samal Island resort with its other hotels in the region, specifically the one in Kuching, Malaysia, Mr. Gales said.
The meeting was prompted by Ekran Berhad’s growing tax arrears, which has reached P30 million.
In the first quarter of the year, the foreign firm sent consultants to the resort to assess its condition.
In 2004, a study by the local government and the Department of Tourism estimated that around P200 million would be needed to revive the resort.
The local government had talked to several groups, including South Korean and American companies, and even the Philippine Amusement and Gaming Corp., but all three did not want to bear the costs.
The 300-room hotel and casino resort opened in December 1997 under an agreement with the Department of Tourism and the Philippine Tourism Authority. The resort, located at the 11,800-hectare Samal Island Tourism Estate Project, had golf-courses, a casino, condominiums, villas, and recreational facilities.
The resort closed in July 2000 as losses reportedly reached P2 million a month with the business slowed down by the Asian financial crisis of 1997.
Occupancy rates were pulled down by a dispute over a deal covering flights between the Philippines and Taiwan where most package tours came from, the lack of flights between Davao City and Kuala Lumpur, and the peace and order situation.
The company also complained over the lack of an access road to the resort, supposedly part of an agreement with the national government. There is a three-kilometer stretch of road to the resort that is a little "more than a trail," Mr. Gales said.
Ekran Berhad will jump-start operations by phases, he said.
Samal Mayor Aniano P. Antalan had told a local news program that Ekran Berhad would first try to refurbish and renovate 80 hotel rooms to test the waters.
____________________________________________________________________________________
