It is a cost overrun fact of marina bay sands

1. PROJECT COST
OVERRUN
Case Study: Marina Bay Sands
Hotel project in Singapore
Group 2
Navodi Peiris 120457
Tharindu Dodanwala 120339
Nischaya Sedai 120459
Kyaw Kyaw Paing 120423
Roman Man Shrestha 120294
Sai Saing Hlaing 120567

3. PROJECT DETAILS
– The client: Las Vegas Sands (LVS) Corporation
– Main contractor: SsangYong Engineering and Construction
– Architect: Moshe Safdie
– Location: Bayfront Subzone, Downtown Core, Singapore
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4. PROJECT DETAILS (CONTINUED)
– Project starting date: 26 May 2006
– Opening date: 27 April 2010 (soft opening), 23 June 2010
(official opening), 17 February 2011 (grand opening)
– Number of stories: 57
– Number of rooms: 2561
– Height: 207 m (679 ft.)
– Area: 249,843 sq. m.
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5. – Marina Bay Sands is the largest Integrated resort in
Singapore
– It was recognized as a “ Best Tall Building Asia &
Australasia Finalist” in the 2010 CTBUH Awards Program
– It has the best casino in Singapore
– It has a 50,000 sq. ft. art and science museum
– Also has a theatre, floating pavilions and 21 galleries
INTRODUCTION
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6. FACILITIES AND
SERVICES
–Sands park: Gardens,
Restaurants, Infinity edge pool,
Public observation deck
–Clubs
–Spa
–Fitness club
–Wonder Full: Light and
water shows
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7. Milestones of Marina Bay Sands
DATE MILESTONES
Dec, 2004 Singapore Government calls for Request-for-Concept for the first Integrated Resort (IR)
Apr, 2005 Government decides to proceed with the development of two IRs
Nov, 2005 Singapore Government calls for Request-For-Proposal for Marina Bay IR
May 26, 2006 Marina Bay Sands wins the bid for the first Integrated Resort in Singapore
Jul 8, 2009 Marina Bay Sands tops out the three hotel towers
Apr 27, 2010 Marina Bay Sands opens its doors: MICE, Casino and Hotel rooms (963 rooms)
Jun 23, 2010 Opening Celebrations: Sands Sky Park, remaining hotel rooms, Retail and F&B stalls
Sep 13, 2010 Official launch of The Shoppes at Marina Bay Sands
Nov 18, 2010 First fashion show on the Sands Sky Park: CHANEL Cruise 2010/2011
Nov 30, 2010 Sands Theatre debuts with River dance
Dec 18, 2010 Skating Rink opens with celebrated skater Michelle Kwan
Jan 14, 2011 Sands Expo & Convention Centre hosts Zee Cine Awards 2011 with over 8,000 guests
Jan 2011 Launch of Art Stage Singapore at Sands Expo and Convention Centre
Feb 17, 2011 Grand Opening: Art Science Museum and Wonderful Light and Water Show

8. COST ESTIMATION
– The price of the land: S$ 1.2 billion (560,000 𝑚2)
– Initial estimation: S$ 3.85 billion (S$ 5.05 billion
including the land price)
– Final project cost (including the land price): S$ 8
billion
– Deviation from the initial estimation: S$ 2.95 billion
– Cost overrun: 58.42 %
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9. WHAT IS COST OVERRUN?
It is the unexpected increase in cost due to an under
estimation of the actual cost during budgeting. This is
also known as budget overrun.
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10. REASONS FOR COST OVERRUN
– Construction delays
– Bankruptcy of subcontractors
– Heavy rainfall and labor shortages
– Revised construction drawings
– Increment in material cost
– Inflation in currency (around 5.5% at that time)
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11. IMPACTS OF THE COST OVERRUN
– LVS Cooperation almost went bankrupt
– Reduced profit for the contractor
– Bad reputation for the contractor
– The prices of the hotel rooms are high ( Varies between
S$500 to S$6500)
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12. ACTIONS TAKEN TO SOLVE THE PROBLEMS
Clients Actions;
– LVS chairman and chief executive officer Sheldon
Adelson had to meet with government officials and
reaffirm LVS’s commitment to the project.
– LVS had to concentrate its financial resources to Marine
Bay Sands project.
– Mr. Sheldon Adelson, the chief executive officer had to
invest additional S$ 1 billion of his own money on the
project.
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13. Contractors actions;
– Revising the schedule to optimize the cost
– Paying more attention to the project planning
– Constantly tracking and measuring the progress
– Check sub contractors capability before hiring
ACTIONS TAKEN TO SOLVE THE PROBLEMS
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14. – First quarter
– Net revenue of S$ 631 million
– Profit of S$ 315 million.
– Second quarter
– Net revenue of S$560.4 million,
– Profit of S$ 390 million.
– The management team expected to have a profit of S$ 1
billion per year.
FINANCIAL STATUS
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15. 2015 2016 2017
Net revenues (S$) 11,688 11,410 12,882
Operating expenses (S$) 8,847 8,917 9,420
Operating income (S$) 2,841 2,493 3,462
Net income (S$) 2,622 2,255 3,052
CURRENT FINANCIAL STATUS
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Note: All the values are in Singapore dollar millions
Table 1: Financial statement comparison (Source: LVS Annual Report 2017)

16. CURRENT FINANCIAL STATUS
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Table 2: High and low sales prices for the common stock (Source: LVS Annual Report 2017)
2016 High ($) Low ($)
1st quarter 54.80 34.88
2nd quarter 53.31 41.45
3rd quarter 58.65 42.29
4th quarter 63.38 53.07
2017
1st quarter 57.92 51.35
2nd quarter 66.22 55.18
3rd quarter 64.91 59.16
4th quarter 72.20 60.85
2018
1st quarter (till Feb 21st) 79.84 67.50

17. REFERENCES
– Bhagat, M. S. A., & Bhalerao, N. V. (2017). Study of Irrigation Project In View of
Cost and Time Overruns.
– IR (2017). ‘’ Historical data of Marine Bay Sands.” Retrieved from
http://www.hotelmanagement-network.com/projects/marinabaysands/ (Nov.10,
2018).
– AR (2018). “LVS Annual Report 2017.” Retrieved from
http://www.annualreports.com/Click/8975 (Nov. 12, 2018)
– MBS (2017). “Financial information about Marine Bay Sands.” Retrieved from
http://eresources.nlb.gov.sg/infopedia/articles/SIP_1607_2011-11-01.html (Nov.10,
2018).
– RMBS (2017). “ General information about Marine Bay Sands Resort” Retrieved
from https://en.wikipedia.org/wiki/Marina_Bay_Sands (Nov.10, 2018).
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18. THANK YOU!!!
Question?