Genting Highlands Malaysia Theme Park Struggling with Increased Construction Costs
Posted on: October 21, 2019, 11:41h.
Last updated on: October 21, 2019, 12:29h.
The under-construction Genting Highlands Malaysia outdoor theme park is likely to face cost overruns as the opening date gets set, according to a financial firm.
The prediction was announced on Monday by Maybank Investment Bank Bhd., which said the project will “incur more expenditures” than the expected $700 million. These were unexpected, the firm added in a memo quoted by GGRAsia.
The Genting Malaysia 26-acre theme park is to be built near Resorts World Genting. That is a large casino resort close to Kuala Lumpur.
Genting Malaysia expects to incur more capex to complete the outdoor theme park, in addition to the capex to date of approximately MYR3 billion [US$717 million], but has not quantified how much yet,” analyst Samuel Yin Shao Yang said in the memo.
When complete, the theme park will employ about 1,100 workers. Some 40 percent of them are already hired.
As envisioned, much of the theme park will open during Q3 of 2020. Twenty of the 25 rides are likely to be operating and tested by then.
It is expected that the 20 rides themes will relate to films associated with 20th Century Fox. The five other rides may use themes affiliated with studios beyond Fox. It remains unknown which films or characters may be highlighted.
Because non-Fox themes will be used, the theme park will not keep its prior name, 20th Century Fox World, Yin explained.
Portions of Fox were recently acquired by the Walt Disney Company. Disney would like to use Fox-themed attractions for its own parks.
Also, Disney generally does not like to associate its theme parks with gambling. Disney owns such globally recognized theme parks as Walt Disney World Resort, Disneyland Resort, and Disneyland Paris.
In July, litigation between Genting and Fox/Disney was settled. Court disputes began in November, when Genting sued Fox and Disney in California federal court for breach of contract. The lawsuit was for more than $1 billion.
Fox allegedly backed away from allowing Genting to use Fox’s brands for the park’s rides and attractions. The change of mind by Fox executives was allegedly because of pressure from Disney.
Fox countersued Genting in January for $46.4 million. The company claimed Genting missed key deadlines in the theme park’s opening.
In July, Genting Malaysia said it reached a settlement “fully resolving” the $1-billion lawsuit versus several entities of the Fox entertainment brand and the Walt Disney Co.
The deal for Disney to acquire Fox’s film and TV assets had been announced before the initial lawsuit. The acquisition formally took place in March for $71.3 billion.
Genting had claimed it spent $750 million on theme park construction, only to have Fox pull out of the agreement. Original details were spelled out in a 2013 licensing agreement.
The theme park initially was scheduled to open in 2016. That opening date kept changing.
Now, the theme park appears to be largely complete. “We understand that construction of the outdoor theme park was approximately 95 percent completed as [of] … July 2019,” a Maybank analyst said in a summertime memo.
Gambling Arrests in Malaysia
Breaking up illegal gambling operations in Malaysia appears to be a police priority. In August, police broke up an illicit online gaming operation which offered over 200 games, arresting 100 Chinese nationals near Kuala Lumpur.
Altogether, police apprehended 83 men and 17 women, as well as a local woman. They face illegal gambling and immigration charges.
In March, Kuala Lumpur police chief Commissioner Datuk Seri Mazlan Lazim announced that authorities are getting tough with illegal online gambling in the capital city of Malaysia.
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