CNMI

IPI pulls out stops for hotel completion

Imperial Pacific International is doubling down on its efforts to speed the construction of its long-delayed hotel, which will be a key factor in improving group cash flow.

The company, which is building an IR on the island of Saipan, is considering adding night shifts for its construction workers to get the project finished.

The hotel portion of the casino, which opened last year, will fail to meet an August deadline and the company has now reportedly asked for an extension until December.

Eric Poon, vice president for construction said in early July a possible second work shift is in discussions with its contractor Pacific Rim Contractors that will start after 7pm until midnight. “The exact date we still have to iron out with Pacific Rim because right now, we have to put the safety features needed especially at night before we put a date for the second (work) shift,” he said.

The project has been plagued by problems, mostly related to labour. It has faced a shortage of available workers on the island and its initial construction company ran into hot water for using illegal Chinese employees who had come in on tourist visas.

Poon said the lack of manpower was one of the main reasons for the resort’s delay. However, he said that over the last few months the situation has improved.

“For the past few months, IPI has significantly increased manpower, especially from IPI’s side as we have H2-B workers. It helped us a lot to put our schedule even further… Moving along I can say we are back to normal like the way we want it.” he said.

Construction now is focused on the resort hotel, the hotel tower, which includes the building facade and roof and external works.

The first phase of construction calls for a minimum of a 329-room four or five star luxury hotel, 14,140 square meters of gaming area, with 193 tables and 365 slot machines. While it waits for completion of the hotel, it’s putting up guests in 3 villas and 5 yachts, as well as in rooms in other local hotels.

The request for the construction extension will be the sixth amendment to the group’s casino license agreement and the patience of some lawmakers on the island is wearing thin.

Commonwealth Casino Commission Chair Juan Sablan told IPI that it should come up with a realistic deadline in its request for the extension.

Still, even without the hotel being open the company continues to generate an eyepopping level of revenue. For 2017, unaudited table game rolling hit $49 billion, although net profit fell by almost a third.

Imperial Pacific is not yet working with any junket operators, apart from a small Korean operation, and has been extending credit to its high rollers. This has resulted in a spike in gambling debts to HK$8.5 billion, up from HK$5.3 billion in 2016. Impairment losses came in at HK$4.75 billion, a nearly nine-fold increase on the HK$547 million the company booked in 2016.

Recently, the company filed 13 more lawsuits in an effort to recover $12.75 million in debts from Hong Kong and Chinese players. The customers allegedly owe a total of $19.1 million. The 13 customers allegedly took out loans ranging from $100,000 to $6.2 million, according to local media reports.

The biggest borrower is Wenlong Cui, a resident of Hong Kong, who allegedly made two loans for a total of $6.2 million and failed to pay $3,096,970. Cui took out a promissory note for $1 million in October last year and subsequently asked for the amount to be doubled. Cui defaulted on that loan, however in a second trip a month later he executed a second promissory note to borrow $2.2 million.

U.S. concerned at Chinese investor interest in CNMI

A ramp up of Chinese interest in the CNMI has caused concern amongst U.S. security officials, who see the island as a “strategic asset” for the U.S. military, according to a U.S.-China Economic and Security Review Commission report.

“Over the past four years, Chinese companies have ramped up their investments into the CNMI, a U.S. territory just north of Guam and a strategic asset for the U.S. military.” According to the report, current plans for two multi-million dollar resorts on the island of Tinian are located close to land leased by the U.S. Department of Defense.

The DOD has plans to redeploy 4,100 Marines from Okinawa, Japan, to Guam, a move that will require greater use of CNMI land for training and exercise purposes.

CNMI targets financial fraud

The CNMI government has announced the introduction of a bill aimed at preventing casino financial fraud.

The “Prevention of Fraudulent Misuse of Financial Instruments in Casino Gaming and Other Transactions Act,” aims to ensure that Saipan’s exclusive casino, Imperial Pacific Hotel & Resort will be protected from fraudulent misuse of financial instruments.

Senate President Arnold I. Palacios, who introduced the bill, noted that casinos in the U.S. have had a long history of dealing with financial fraud, and that the Saipan casino could be vulnerable to a variety of fraudulent activities such as counterfeit money, fake credit cards and other illegalities.