March 17, 2011
The long-awaited financing to back the construction of the Hong Kong-Zhuhai-Macau Bridge has been closed as a Rmb29.39 billion (US$4.45 billion) onshore deal with seven banks joining, reported Reuters-owned International Financing Review Asia, citing “banking sources”.
A day earlier the Macau government announced it was inviting tenders for work on creation of five new landfill sites in the Macau Special Administrative Region. One will link to an artificial island supporting the Macau landing point of the 38.4 kilometer long bridge.
The relevant landfill area, known as ‘Area A’ – is the largest of the five reclaim plots. It will cover 1.38 square kilometers and is due to be ready before 2016- the target date for the completion of the bridge – a structure that will span the Pearl River Delta. Arup, an engineering and consultancy firm involved in the design of the artificial island foundations, estimates the bridge could reduce travel times between Hong Kong and Macau/Zhuhai from as much as three hours (including currently a 75- to 90-minute ferry journey plus embarkation/disembarkation and immigration and customs clearance at each end) to half an hour. Currently such fast journey times are only achievable by helicopter. The 30-minute transit time quoted by Arup in relation to the bridge is probably a best case scenario. It may be dependent on the immigration processing policies of the three jurisdictions (HKSAR, Macau SAR and the People’s Republic of China) as applied to bridge users.
Union Gaming Research said in a note to investors that the bridge’s economic impact on the Macau gaming market was most likely to be felt in the mass segment.
“Like many of the other massive infrastructure projects in China (e.g. high-speed rail, light rail), the bridge should be a key component of expanding mass-market visitation to Macau,” stated the research note.
“In 2010, mass market revenues accounted for 28% of total gross gaming revenue (GGR) in Macau, down from 33% in 2009 due to outsized strength of the VIP segment last year. However, during 2010, mass market revenues grew nicely at +33% y/y, to MOP52.7bn (US$6.6bn), and have grown at a 25% CAGR [compound annual growth rate] since 2005. This compares to a 36% CAGR for the VIP segment,” it added.
