Landmark ... Jul11

A proposal for a new casino on Bintan, an Indonesian island off the coast of Singapore, was shot down in Feb 2011 by Indonesian president Susilo.

His message was a stern warning to the Riau government, which was toying with the idea of legalizing gaming for the first time in Indonesia to attract tourists away from Singapore.

PT Wisata had, in Jan 2008, zoned Treasure Bay Bintan as an exclusive integrated tourism zone with permission to conduct certain licensed activities, including gaming. Wisata which is authorized by the Riau government to assign zones for certain licensed activities, has also zoned Treasure Bay Bintan for medical tourism, multimedia and IT hosting and other entertainment.

Under the zoning agreement, Wisata is entitled to a limited share of profits from Landmarks’ unit, Bintan Treasure Bay Pte Ltd, for specific plot of land in its development.

The company has already forked out rm760 million to acquire the land in Bintan island. It does not really have any strong core business apart from the Andaman Resorts in Langkawi.

According to its latest annual report, Landmarks is soldering on with its planned development in Bintan, which was stalled by the global financial crisis late 2008. In the two years that the project was stalled, Landmarks revised its development master plan for Treasure Bay Bintan and negotiated for favorable development rates and raw material costs.

Landmarks started site works in Bintan in 3Q2010 and is expected to spend most of 2011 putting the structures in place.

The 338ha tract in Bintan was revalued at S$242 million psm in 2008 following the zoning by Wisata and revisions to its master plan.

As the project to develop the resort gets off the grounds, industry observers are wondering when Landmarks will see returns from its Bintan venture.

Based on preliminary studies, Landmarks says its lifestyle hotel, resort and residential and commercial development projects in Treasure Bbay Bintan would cost about S$921 million to develop.

Nevertheless, a gaming license will be the biggest wildcard for Treasure Bay Bintan. It is believed that it is only a matter of time before the government of Indonesian endorses that granting a license for gaming operations in Indonesia would help to attract more visitors.