Imelda Saad, Channel NewsAsia 2 Sep 08;
Touted as the Singapore labour movement's first high-end resort for the working class, the S$45-million Palawan Beach Resort has been facing major delays.
The proposed 200-room resort, announced 3 years ago by then NTUC Secretary-General Lim Boon Heng, was to have been built on a 3-hectare plot of land, next to Palawan Beach at Sentosa , and to have opened its doors by March this year.
According to the Sentosa Master Plan, the site is zoned for Sports and Recreation use.
Channel NewsAsia understands that based on the concept for the site, the cost of leasing the land now has gone up considerably compared with initial estimates.
Other reasons cited for the delay include the skyrocketing costs of construction and material.
Construction costs in Singapore have gone up some 60 to 70 percent since 2005, and in the past 12 months alone, it has increased by almost 30 percent.
Based on the condominium plots at Sentosa Cove, the land value on Sentosa has risen between 3 and 3.7 times since 2005.
Nicholas Mak, director of Knight Frank, a real estate consultancy firm, said: "All the land on Sentosa are practically state land so the government will have to weigh the balance on whether to maximise the value of the state land by selling it at the highest possible price, or should they be selling some parcels of state land to certain organisations that may be developing a project that meets certain social needs, like for example the NTUC."
He added that the S$45 million budgeted for Palawan Beach Resort may now not be enough for the plans that were laid out.
A report by the labour movement's recreational arm said Palawan Beach Resort will boast state of the art facilities, including a luxurious spa and a mirage pool. Room rates were expected to average S$150, with discounts for union members.
However, to ensure the project is financially sustainable, the concept and business model are being reviewed. Areas being looked into include reducing the number of facilities at the resort, the room size or even the number of rooms.
Both NTUC Club and landlord Sentosa Development Corporation declined to be interviewed, although NTUC Club confirmed that talks between both parties are ongoing.
In a statement to Channel NewsAsia, it said the resort will serve its social mission of providing affordable social and recreational facilities, in a sustainable manner.
General-secretary of the Metal Industry Workers Union, Tan Chai Kun, said he is looking forward to the new resort and their members, especially those in the lower-income group, enjoying higher-end recreational facilities.
NTUC Club hopes to put the final touches on the project's concept by the end of the year and obtain the approval from authorities.
NTUC Club is the biggest local resort operator, managing three budget family-themed resorts, with two resorts located at Pasir Ris and one located at Sentosa .
- CNA/yt
