By BOSORINA ROBBY
THE South Korean developer of the multi-million kina Port Moresby Casino Hotel was yesterday given a 10-day notice to show cause why its contract should not be terminated, The National reports.
Work came to a standstill at the end of last year as the developer, CMSS (PNG) Ltd, went abroad to raise funds.
CMSS signed a contract with the government in 2008 to finance, build and complete the project within two years.
However, there have been various delays and complaints in the past eight months regarding the project as some K22 million in landowner funds was invested in the project.
Reliable sources told The National last night that under the contract, CMSS was supposed to invest US$72.8 million (K164 million) as part of its equity for a 90% holding in the casino project, but that was disputed by CMSS last night saying “not US dollars”.
Two Kutubu oil landowner companies – Petroleum Resources Gobe (PRG) and Petroleum Resources Moran (PRM) invested K11 million each in the project – each for 5% equity.
PRG chairman Philip Kende confirmed their investment and complained of government’s inaction in co-ordinating and monitoring the project.
THE South Korean developer of the multi-million kina Port Moresby Casino Hotel was yesterday given a 10-day notice to show cause why its contract should not be terminated, The National reports.
Work came to a standstill at the end of last year as the developer, CMSS (PNG) Ltd, went abroad to raise funds.
CMSS signed a contract with the government in 2008 to finance, build and complete the project within two years.
However, there have been various delays and complaints in the past eight months regarding the project as some K22 million in landowner funds was invested in the project.
Reliable sources told The National last night that under the contract, CMSS was supposed to invest US$72.8 million (K164 million) as part of its equity for a 90% holding in the casino project, but that was disputed by CMSS last night saying “not US dollars”.
Two Kutubu oil landowner companies – Petroleum Resources Gobe (PRG) and Petroleum Resources Moran (PRM) invested K11 million each in the project – each for 5% equity.
PRG chairman Philip Kende confirmed their investment and complained of government’s inaction in co-ordinating and monitoring the project.
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| Petroleum Resources Gobe chairman Philip Kende at the Port Moresby Casino Hotel construction site yesterday. He is concerned about landowner investment in the project and wants a review of the agreement.-Nationalpic by YEHIURA HRIEWAZI |
He wants a complete review of the project agreement.
CMSS managing director and owner Jimmy Kim said yesterday he had written
his response to the show cause notice which would be delivered today
to the government.
It is understood he was also consulting his lawyers yesterday.
He complained bitterly about the government failing in its part as well and admitted the delay in the project.
“I am not running away, I will complete the project … “Yes, I admit there is delay, but work did not stop,” Kim said.
However, a visit to the site by The National yesterday afternoon proved otherwise.
Commerce and Industry Minister Charles Abel said his departmental head Steven Mera delivered the notice to Kim on Monday.
Abel said the developer should prove that it was still able to recommence and complete the project within the terms of the agreement.
He said one of the provisions was the time-frame for the completion of the project.
“The state injected prime land into this project.
“The developer’s obligation was to build the hotel within a specified time-frame.
“After 12 months, we are not seeing anything as outlined in the project agreement,” Abel said.
“As it is, the provisions allow us to terminate the project as we see fit, which we are doing now.”
He said the government was concerned about the interests of the Gobe and Moran landowners and other investors who had contributed capital.
Abel said so far, more than K33 million in investors’ funds had been spent on the project, while the state had contributed the land and related building board requirements plus a 10-year tax holiday.
He said should the developer fail to act on the notice, the state would terminate the agreement and publicly invite expressions of interest from other investors or consortiums capable of partnering with the state and shareholders to complete the project.
Abel revealed that there had already been unofficial expressions of interest should the CMSS fail to comply.
“It should cost roughly between K30 million and K60 million to carry on the work at the hotel site because the cost of materials has gone up and there is still a lot of work to do.”
The Mineral Resources Development Company, which is the custodian of landowner funds, has already engaged an architectural firm to conduct surveys on the unfinished building.
MRDC managing director Augustine Mano said last night the Krammer Group was engaged to check the structural integrity of the building and conduct quantity surveys to establish how much money had been spent on the building and how much more would be needed to complete it.
“We have engaged an independent professional firm who does the work so that will give us the comfort.”
Meanwhile, Abel is undecided on whether a casino will be part of the project at 4-Mile.
“The government is not in favour of the casino but we are not going to remove it.
“We will just ensure that it is managed under strict guidelines,’’ he said.
“The casino is not intended for the public, so restrictions will be put into place such as people may have to pay subscription fees or produce passports to enter.”
He said the focus was on the accommodation part of the project and its immediate completion to give investors a just return for their money.
“What I’m saying is, should we have a new agreement, the issue of the casino can be reviewed and decided by the new partners to either keep it or not.
“As yet, we have not applied for nor received a casino licence from the National Gaming and Control Board.
“The options are open,” he said.
It is understood he was also consulting his lawyers yesterday.
He complained bitterly about the government failing in its part as well and admitted the delay in the project.
“I am not running away, I will complete the project … “Yes, I admit there is delay, but work did not stop,” Kim said.
However, a visit to the site by The National yesterday afternoon proved otherwise.
Commerce and Industry Minister Charles Abel said his departmental head Steven Mera delivered the notice to Kim on Monday.
Abel said the developer should prove that it was still able to recommence and complete the project within the terms of the agreement.
He said one of the provisions was the time-frame for the completion of the project.
“The state injected prime land into this project.
“The developer’s obligation was to build the hotel within a specified time-frame.
“After 12 months, we are not seeing anything as outlined in the project agreement,” Abel said.
“As it is, the provisions allow us to terminate the project as we see fit, which we are doing now.”
He said the government was concerned about the interests of the Gobe and Moran landowners and other investors who had contributed capital.
Abel said so far, more than K33 million in investors’ funds had been spent on the project, while the state had contributed the land and related building board requirements plus a 10-year tax holiday.
He said should the developer fail to act on the notice, the state would terminate the agreement and publicly invite expressions of interest from other investors or consortiums capable of partnering with the state and shareholders to complete the project.
Abel revealed that there had already been unofficial expressions of interest should the CMSS fail to comply.
“It should cost roughly between K30 million and K60 million to carry on the work at the hotel site because the cost of materials has gone up and there is still a lot of work to do.”
The Mineral Resources Development Company, which is the custodian of landowner funds, has already engaged an architectural firm to conduct surveys on the unfinished building.
MRDC managing director Augustine Mano said last night the Krammer Group was engaged to check the structural integrity of the building and conduct quantity surveys to establish how much money had been spent on the building and how much more would be needed to complete it.
“We have engaged an independent professional firm who does the work so that will give us the comfort.”
Meanwhile, Abel is undecided on whether a casino will be part of the project at 4-Mile.
“The government is not in favour of the casino but we are not going to remove it.
“We will just ensure that it is managed under strict guidelines,’’ he said.
“The casino is not intended for the public, so restrictions will be put into place such as people may have to pay subscription fees or produce passports to enter.”
He said the focus was on the accommodation part of the project and its immediate completion to give investors a just return for their money.
“What I’m saying is, should we have a new agreement, the issue of the casino can be reviewed and decided by the new partners to either keep it or not.
“As yet, we have not applied for nor received a casino licence from the National Gaming and Control Board.
“The options are open,” he said.
any latest news about this article? is the hotel and casino finish already? do they have new investors? what happen to Jimmy Kim and CMSS, are they still the one in majority holder?
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