business daily 55
February 26,19, 2014 Friday April 2013
Macau
Utility asks govt for more money Macao Water says it’s being squeezed by the need to invest in better supply infrastructure Tony Lai
tony.lai@macaubusinessdaily.com
M
acao Water Supply Co Ltd has asked the government for more money for providing the city with water, even though the company made a profit of about 50 million patacas (US$6.25 million) last year. The government last increased the water supply fee it pays the company last year, by 5.92 percent. Macao Water executive director Felix Fan Xiaojun said yesterday that the company needed the money so it could invest 1 billion patacas or more in the water supply infrastructure. “We have made a formal application to the Macau government for an adjustment this year in our water supply
fee,” Mr Fan told reporters. “A fee increase would could help ease some of the financial pressure we are under that is due to the big investments we will make in future, such as laying new water mains and the third phase of expansion of the water treatment plant near the reservoir.” He declined to say how big an increase Macao Water had asked for. “From our point of view, we certainly want a large increase to relieve the financial pressure on us all in one go,” he said. Macao Water has been making money since 2009. Mr Fan said his company had made a profit of roughly
50 million patacas last year because of cost reductions and the increase in its water supply fee. In 2012 Macao Water made an after-tax profit of 49.42 million patacas, 12.6 percent less than the year before.
Striking a balance “We all have to ponder this issue: whether a company has to wait to incur an actual loss before the government acts,” Mr Fan said, drawing a parallel between his company and Reolian Public Transport Co Ltd. Reolian went bust after the government refused to increase the company’s fee
Healthy profit on Sniper’s Zhuhai deal M
acau Property Opportunities Fund Ltd says it has sold two properties in Zhuhai – APAC Logistics Centre and Cove Residence – for a combined total of 392 million yuan (511.58 million patacas, or US$65 million). The fund – managed by Sniper Capital Ltd – says it jointly acquired the sites for US$11 million in 2008. Since then, it has developed APAC Logistics Centre into a state-of-the-art logistics facility and Cove Residence into a 484-unit apartment complex. “The agreed sale price represents a 34 percent premium to the September 2013 valuation of the properties and generated a net profit of US$29 million – equivalent to an internal rate of return of 21 percent,” said
the fund in a statement. MPO chairman David Hinde added: “Our investment in APAC Logistics Centre and Cove Residence was driven by the belief that demand for well-located properties in the area would escalate as Macau and neighbouring Hengqin Island continued to grow rapidly. This divestment has allowed us to generate a significant return on investment for our shareholders.” M.G.
264% Net profit on property sale
for running some of the city’s bus services. “We understand the public will have opinions whenever there is an adjustment in the fees of public concessionaires,” Mr Fan said. “So we don’t hope to get any support from the public. But at least they are not against it.” He said the government had responded to Macao Water’s request for more money by asking for more information. He predicted that negotiations would be “arduous”, because the government had to balance its own interests against the interests of Macao Water and
the public. Business Daily invited the Maritime and Water Affairs Bureau to comment but the bureau had failed to reply by the time we went to press. Macao Water last asked or an increase in its water supply fee in May 2012.
Cost disconnect The company asked for 26.2 percent more. A year later the government, under pressure from the public, granted an increase of only 5.92 percent. That means he government now pays Macao Water 4.65 patacas per cubic metre of water it supplies the city with. A change in what the government pays the company for supplying the city with water does not necessarily mean any change in what the government charges consumers for using water. The Maritime and Water Affairs Bureau said last month it hoped to come up with a new water consumption tariff by the end of June. The bureau said big consumers such as casinos and hotels might have to pay 10 percent more. Mr Fan said Macao Water would spend between 1 billion patacas and 1.5 billion patacas in the next few years on improving the water supply infrastructure so it could keep abreast of consumption, which would increase by 2 percent to 3 percent this year. He said the increase in consumption was due to businesses, particularly casinos and hotels, turning on their taps as the number of visitors grew.
Macau hotel room numbers to near-double T he number of hotel rooms in Macau could nearly double if pending and applied for projects are completed. There were a total of 16 hotel projects under construction in Macau during the fourth quarter of 2013. These, together with 27 other projects being appraised by the government, could see the city have up to 25,600 more guestrooms and 18,250 parking places. The Land, Public Works and Transport Bureau released the latest figures this week. Macau had 29.3 million visitors last year served by a current inventory of about 28,000 rooms According to the data, the 16 hotel projects under construction in the fourth quarter of last year
will offer Macau a total of 9,600 guestrooms. Of these, nine schemes are on the Macau peninsula and will offer 1,030 guestrooms. Five hotel projects on Cotai will have a total of 7,500 guestrooms, while two on Taipa will add 1,060 more guestrooms to the territory. Just these 16 construction projects already underway will also increase the number of parking spaces in Macau by 9,710. Also in the fourth quarter of last year, there were 27 hotel development projects under appraisal. If approved, these could see Macau have an additional 16,000 guestrooms once all 43 construction projects are complete. S.F.