Macau’s Galaxy Entertainment Group (GEG) has entered into a legally binding Letter of Intent with China Construction that will see the latter provide construction and related services for Galaxy Macau’s Phase 4 development at a cost of MOP$13.01 billion (US$1.63 billion).
According to information filed with the Hong Kong Stock Exchange overnight, China Construction – a subsidiary of China State Construction International Holdings Limited operating mainly in Macau – will provide “construction and related services including but not limited to management, temporary works, general facilities and attendance, application and management of labour quota; construction of basement box structure, structural carcass, link bridges; and construction and completion of all specialist work packages through nominated subcontractors/suppliers and/or direct contractors,” for Galaxy Macau Phase 4.
In signing the letter of intent, GEG and its own subsidiary, Galaxy Cotai Project, noted it was in the “best interests of the group” to commence construction of Phase 4 in order to maintain development targets and improve its competitive positioning in Macau’s gaming and hospitality market.
GEG is due to launch Phase 3 of Galaxy Macau in the second half of 2021, comprising 1,500 hotel rooms, the 16,000-seat Galaxy International Convention Center, 40,000 square meters of MICE space and additional gaming floor areas.
The company revealed overnight that it will pay China Construction based on a monthly valuation of work done properly, to be assessed by external professional consultants, while the construction company will issue GEG with a performance bond of MOP$245 million (US$30.7 million) “to guarantee China Construction’s due performance of the relevant contract services.”
The entire project will be funded by GEG’s internal resources with a construction timeline of 1,053 calendar days (a little under three years) from the date of commencement – said to be seven days after issuance of architect’s instruction.
“The Group has been proceeding with the development and expansion of the current footprint in Macau, and continuously reviewing and refining plans to ensure a world-class optimal development,” GEG said. “Cotai Phase 4 has been one of the key development projects that GEG [is proceeding with].
“In order to maintain the development targets and improving competitive positioning, it is in the best interests of the Group to commence the relevant construction works.”
The Chinese state-owned China State Construction International Holdings Limited has been involved in the development of previous phases of Galaxy Macau, as well as Wynn Palace, City of Dreams and Macau Tower among other developments.