Australian gambling operator Silver Heritage announced its plans to boost the budget for the construction of its multi-million dollar Tiger Palace Resort Bhairahawa in Nepal. The gaming operator intends to allot the additional sum of A$18 million so that the project’s budget can reach A$70.3. Representatives of the Silver Heritage Group disclosed the operator is currently in the process of raising the additional funding, intended for the project’s completion.
The Silver Heritage Group had originally set aside the sum of A$52.3 million for its Tiger Palace Resort in Nepal. However, the construction of the integrated resort has already suffered several delays as became evident on February 1, 2017, when the Silver Heritage Group issued a warning that the project has suffered unexpected costs that exceeded what was originally planned.
The operator asked for suspension of its shares from trading, at least until further clarity could be provided. In a statement, issued yesterday, the Silver Heritage Group disclosed its stock will be on halt until further details on raising the additional funds can be given.
The governance of the Silver Heritage Group stated that the integrated casino resort had overrun the originally planned budget because of deviations from the initial plans for the construction of the casino and public amenity areas. The land improvements, the operator planned, were yet another reason for the project’s running over budget.
In addition, the Silver Heritage Group was plagued by various issues with costs that resulted from the local contractors. There were also delays on behalf of the Nepal Central Bank which was to grant its approval for raising the upper equity limit for the local operating units. All these factors affected the Silver Heritage Group’s ability to transfer additional funding into Nepal.
The Group’s governance also deemed the site reporting and the management of the Nepal project inefficient, which can be interpreted as yet another reason for the delays and budget overrun. Because of this, a new team of seasoned executives from Asia has been appointed. The new executive team is to be led by Adam Titus, who recently was involved with the development of the MGM integrated resorts in Okada Manila and Macau.
The Australia-listed gaming operator filed a report with the Australian Stock Exchange stating that the resort’s completion will be staged. The hospitality areas of the resort are to be completed by August 2017, while the construction of the remaining facilities is to be completed until November of the same year.
Silver Heritage’s Tiger Palace Resort Bhairahawa will be the first of its kind to open doors on the territory of Nepal. As it will be located near the border with India, the resort is expected to profit from the demand in this country where gambling is currently illegal. In fact, India is expected to have the biggest middle-class consumption on an annual basis in the world. The predictions of the Group are that the middle-class consumption in India alone will reach US$12.8 trillion by the year of 2030.
