The $1.5-billion integrated resort project of Hong Kong-listed casino investor Landing International Development Ltd. (LIDL) could see further delays after President Rodrigo Duterte ordered the cancellation of its casino land lease deal with Nayong Pilipino Foundation (NPF).
Duterte’s order was issued on the same day LIDL held the groundbreaking ceremony of its multibillion-dollar casino resort in Philippine Amusement and Gaming Corporation’s (PAGCOR) Entertainment City.
Philippine Presidential Spokesperson Harry Roque announced the news on Tuesday, saying Duterte was furious about the decision of Nayong Pilipino executives to lease a government property for a “ridiculously long period of time of 70 years.”
“[Duterte] said he will have it cancelled as being grossly disadvantageous to the government,” Roque said at a press conference.
The Philippine president also terminated all NPF board members and management for striking a disadvantageous casino land lease deal, according to Roque.
“He therefore announced that he was sacking all members of the board, management of Nayong Pilipino. The papers formally terminating the entire management and entire board will be issued in due course,” Roque said, according to Rappler.
The issue on the casino land lease stemmed from the complaint of Duterte’s niece Maria Fema Duterte, who happened to be a member of the NPF board. The younger Duterte claimed the deal was anomalous since the lease contract favored the foreign group.
In June, government auditors expressed concerns over the legality of the land lease deal that LIDL had struck with its local partner, the Nayong Pilipino Foundation. The Philippine Commission on Audit (COA) was alarmed at the favorable terms that LIDL had reportedly secured, which were far lower than the lease prices paid by other Entertainment City operators.
Based on its estimates, COA warned that the Philippine government could lose as much as PHP26 billion (US$486.2 million) from the deal since LIDL would be underpaying the lease relative to the market value of the land at the nearby Solaire Resort and Casino.
While the press conference of Roque was taking place, senior executives of LIDL were busy popping the champagne for the ground breaking ceremony of their integrated resort project, NayonLanding.
LIDL Chief Operating Officer Jay Lee told reporters during a press conference that the target was to open the NayonLanding in 2022. The opening of the casino resort would be done in phases, with the theme park first to be rolled out before the hotel, food and beverage outlets, according to the executive.
The casinos in NayonLanding will open as soon as the five-year moratorium imposed by PAGCOR on casinos lapses. It would be recalled that the state regulator entered an agreement with existing integrated resorts and casinos in Entertainment City to give them five years to allow the industry to mature.
But it looks like LIDL may have to revise its timetable once they hear about President Duterte’s recent announcement.