Osaka to Spend JPY25.5bn for Anti-Liquefaction Work on Integrated Resort Site
Summary:
- The updated figure is down 37.8% from the initially-announced cost of JPY41.0 billion
- The reduction in IR costs is due to several factors
- Osaka could face additional land improvement costs for future expansion
The local authorities of Osaka will prepare an estimated budget of JPY25.5 billion for anti-liquefaction work on the site where an integrated resort will be developed. The latest figure is down 37.8% from the original estimate of JPY41.0 billion.
The Osaka city and prefecture in partnership with the MGM-Orix consortium, will build a casino complex on the man-made Yumeshima Island in Osaka Bay.
Cost Adjustment Due to Multiple Factors
The Osaka authorities this week convened a meeting of experts to discuss the best methods to reduce liquefaction hazards on the land slated for Japan’s first integrated resort. It was announced during the meeting that the size of land to be subject for anti-liquefaction work will be reduced from 38 to 21 hectares. Furthermore, work will be carried out using a cement solidification method instead of the initially-agreed sand compaction pile system.
With these changes, the cost for the anti-liquefaction measure will be much lower compared to the previous estimate, and this will also likely lead to a significant reduction in the overall cost to Osaka authorities of all land remediation work required for the construction of the project which was previously estimated to reach JPY78.8 billion.
The latest development coincides with an earlier statement from MGM Resorts CEO and President Bill Hornbuckle that the integrated resort would occupy a much smaller floor area than what was laid out in the original plan. The MGM boss did not elaborate on the details of the changes but stated that the gross floor area could be potentially reduced by as much as 25%.
Hornbuckle also stated during a recent investment conference that piling work for the integrated resort could begin in spring 2024.
Osaka IR Expansion Would Involve Additional Costs
According to reports, the project could utilize another 6-hectare plot on the island for future expansion, with an additional 14 hectares slated for landscaping, parking, and other extra facilities. If the Osaka authorities and its private partners MGM and Orix proceed with this plan, it would entail an additional cost of JPY25.7 billion for land improvement works.
The US$10 billion integrated resort was initially scheduled to open in 2029, but the launch has been postponed a year later to 2030 due to delays in the approval process for the project.
David WalkerAuthor
David is our resident 'down under' contributor, letting us know what is going on in the southern hemisphere, he is also keen blackjack player
