Macau – Two worlds colliding – LRT & Galaxy Macau Phase 2 Progress Photo

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Above photo shows the current state of construction of two major projects in Macau, one being in private hands, one being in public hands:

Ironically enough the same photo shows how two worlds collide that actually are very tightly interlinked with each other: The world of gambling and gaming, endless streams of revenues in the past years and a fast track project which is scheduled for completion this May. And then, the world of public project management in Macau, its actually endless pockets filled by tax money from the very same casino operators we just talked about, however none of the same pace-minded approach in construction: The LRT was recently called out for a 883 days delay.

Photo taken on February 9th 2015 by Max-Leonhard von Schaper

China – Huidong Mall Fire

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There had been a mall fire in Guangdong Province, China, leaving at least 17 people dead. Given the above photo and the description offered in the news article, it seems to be a very typical mall as operating throughout the country.

From my own experiences in China, as well as in Macau, fire safety both in prevention and in suppression is lacking far by European standards. A few examples:

  • Fire exit doors closed, locked or barricaded.
  • Emergency staircases used as storage or carpentry store.
  • Contractors that try to save money by conciously trying to circumvent existing regulation and installing inferior materials.

One can only hope that regulations and especially the implementation and control of the same are being tightened after the event above. Otherwise we might see a repeat within a short time.

Macau – Public Projects – Delay and Overspending

Project Name Budget Current Spending Start of Construction Scheduled Completion Current Announced Completion Delay
Macau Prison (EPM) – First Stage August 2010 August 2013 Unknown >1.5 years
LRT Macau – Phase I Line (Macau-Taipa Line) MOP7.5 billion MOP14.27 billion 2011 2014 September 9, 2017 883 Days
Taipa ferry terminal MOP 500 million MOP3.2 billion 2005 2009 End of 2014 / Not Realized 6 Years

Given recent news on the progress of Macau prison, I decided to collect a few of the most prominent public projects that face delay and overspending. As can be seen all projects are scheduled to complete within the next few years. How this is possible whereas even big projects such as Wynn or Sands’ The Parisian are announcing delays, is another story.

 

Macau – LRT Progress Photo – Depot Site

LRT Depot2

 

With reference to the online progress update and recent news on the Macau LRT, above photo shows the current state of the depot area of the LRT. On the left one can see the incoming pillars of the elevated track (without section elements) and in the middle one can see the starting points for what might become a train depot at some point of time.

Interestingly enough, on the detailed progress page of the LRT, it states that construction of the depot began in November 2011. That would be 3 years ago. Tendering had commenced in February 2012 with 16 companies submitting a bid in April the same year. Longest construction period as stated was 1015 days.

Assuming tender award the same day, i.e. April 11th 2012, then construction for the depot would have been completed on January 21st 2015. Given the above shown state it seems that construction has not commenced, hence leading to the assumption that we are at least one or two years away from any meaningful completion of the depot.

Now as we all know, a train track cannot be properly tested or commissioned without a depot, as one needs to feed in and feed out trains, maintain them, do the overnight parking, etc. Hence without an at least 75% completed depot, one cannot start any tests. Well, wait, 75% assumes that the trains can be driven by drivers. But the LRT Macau is a driverless system! Hence I assume that one would need a proper and fully functional depot for the systems testing.

That means we would be able to commence in February 2017 with testing of the track and depot. Given the complexity of driverless systems and the necessary operational and emergency testing, I would assume this phase to take between 6 months and 12 months. Hence opening of the LRT could be as far out as end of 2017.

Macau – 2014 in review (in figures and graphs)

Endyear2014 - Monthly Gross Gaming Revenue

 

2014 has ended and brought with it a change in Macau which waves are still hitting economy, politics and society. As can be seen in above graphic, monthly gross revenue of Games of Fortune in Macau decreased for the first time since 2010 in a continuous manner. All figures above are in million MOP.

The below graph will show that trend even more clearly with figures for each month next to its’ previous year’s month figure. Beware that the y-axis starts at 20 billion MOP.

EndYear - 2014-2013 Comparison

Another clear picture of the overall trend of declining gaming revenue can be seen in below graphic that compares the growth (or decline) of each month with its previous year corresponding month:

EndYear GrowthDecline

Despite the above decline however, there were more visitors coming to Macau especially in the last months of 2014:

EndYearVisitorGrowth

 

But is this increase in visitors actually beneficial for Macau? An analysis on the basis of spent gaming revenue per visitor shows that the first two quarters of 2014 were the top months since 2009, however the last two quarters (which had most visitors to Macau since 2008) yielded a lower average revenue per person than any quarter since Q1 2012.

EndYearRevenueperperson

Summarizing the above, Macau is facing tough challenges due to the breaking away of the VIP junket market as well as increased visitor numbers from second and third tier cities in China. Will 2015 bring an upwards swing or will the downward trend continue? The first few months and especially the Chinese New Year season will show where Macau is heading this year.

The sources for above information:

Macau: LRT without hope

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As expected, it was finally announced: The LRT project in Macau is hugely delayed. So huge that it actually will open at a minimum of 883 (!!!) days later. The obvious outcry followed:

As I can relate from my own personal experience of observing various LRT construction sites in Taipa, there is not a lot of progress on site. On most days in the past four months the sections close to the depot area were completely worker-less and since last year June I believe only four pillar-to-pillar connections have been built.

Come on GIT, building a metro is not hard. Hongkong did it, Guangzhou did it and even Delhi did it. But then again, project management in Macau has challenges of its own. Yet, personally speaking it seems no one is trying to tackle them in a proper manner to bring this project back on track.

Photo taken in July 2014, LRT site close to Galaxy Macau.