Wynn Palace opening delay costs contractor $38M in bonus

Wynn Palace opening delay costs contractor $38M in bonusLeighton, the contractor tapped by Las Vegas-based Wynn Palace Resorts for the Macau project, had already lost a bonus of $38 million after it told the casino operator that it won’t make the originally slated March 25 deadline for the $4.1 billion resort, Las Vegas Sun reported.

This bit of info was revealed by Wynn Palace CEO Steve Wynn on Monday, telling the news outlet that the contractor had “a 90-day completion bonus of $38 million” if they meet the deadline.

“As it happened, 10 days ago, they told us, ‘We’re not going to make the 25th,’ because they have hit some complications in installation. We had been using March 25 as the date, so I had to make another announcement (of the June 25 opening),” Wynn said, according to Las Vegas Sun.

Now, aside from the new deadline, Leighton also has to meet the construction benchmarks in December and January or risk paying the penalty.

“If they don’t make June 25, it’s a $1.5 million-a-day penalty,” the news outlet quoted Wynn saying.

In addition, Wynn said if the contractor failed to finish the first five floors by Dec. 24, they’ll have to pay $200,000 a day. Leighton must also finish the next 10 floors by Jan. 24 or it will have to pay $200,000 a day.

Still, the casino mogul doesn’t see any problem with this kind of adjustment.

“We weren’t delayed, but I got misled by my builder and not in a mean way,” he said, according to the report. “They just bumped into some problems. But the furniture has been ordered and the fountains have been tested.”

Back in November, Wynn announced that it is adding three more months to the opening date of the new Cotai resort. At the time, analysts said the delay could be attributed to the government’s slow pace when it comes to issuing permits and also due to a shortage of construction workers.

However, analysts believe the delay won’t make much of a difference since “two months of less revenue share gain will be partially offset by two months less of incremental operating costs.”

Steve Wynn’s new casino will feature a large lake with fountain display, a casino, spa, shops, food and drink outlets and a 1,700-room hotel, which the casino operator said will make it “the most extravagant, beautiful hotel in the world.”

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December 16, 2015: posted in News And Reviews No Comments

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