Macau typhoon puts sharp focus on infrastructure delays in Asian casino hub

  • Scrutiny of Macau’s preparedness for future storms after Typhoon Hato disruption
  • Authorities accused of not getting infrastructure in place quickly enough in cash-rich state

It is a norm in politics not to worry about the stable doors until the horses are running down children in the street.

Melco volunteers work with police officers to clean up debris on the streets. Picture: Melco Resorts and Entertainment.
Melco volunteers work with police officers to clean up debris on the streets. The lack preparedness has come under the microscope recently. Picture: Melco Resorts and Entertainment.

For Macau this year that horse was a typhoon that tore through the ex-Portuguese colony leaving ten people dead, two casinos closed up, and half the city without running water or the electrics on.

Sitting in the estuary where the Pearl River hits the South China Sea, Macau is prone to the odd tropical storm.

But it is only now that the government is beginning to talk seriously about flood defences and storm proofing the city’s municipal services.

Not getting things done

The problem stems from a persistent lack of swift action on infrastructure displayed by successive governments – the current of which is still involved in a major corruption probe of the previous which has already put a number of people in jail. In 2013, for example, of the infrastructure projects the government committed to, only 40% were executed, it has been reported.

That missing 60% is in part due to underfunding on a huge scale.

Macau’s tax revenue comes in large part (as much as 80% some years) from the six major casino operators in the area.

Despite what appears to be a very small taxation pool this has generated a mean of $15 billion per year for the government over the last half-decade.

Cash rich, but time poor

The city operates with a fiscal reserve of around $55 billion which is invested carefully and generates a small income for its residents.

Money should not be an issue; but despite the vast amounts of cash available, only a reported 10% of the casino generated tax revenue has gone to upkeep and development of the infrastructure that serves the people of the city who work for and play at those casinos.

The recent typhoon has focused minds on some of the shortcomings of how that money has been invested so far, and what might be done in the future to improve things.

For example Macau’s new ferry terminal on which the ribbon was cut this year was supposed to open ten years ago in 2007, and for one-fifth of the final cost.

In the wake of the storms the government are making the right noises, talking about building a tidal wall and preparing new legislation that will make the funding of such projects more transparent.

But many locals remain skeptical that any real change is likely to come of it. “The government has been talking about it for decades, I guess the project would only be completed in the next decade,” said Harald Bruning, a Macau local.

Either way, surely the major casino operators, which have had to dig in their pockets to help out following the storms will be among those at the front of the queue, banging on the door of the government for some action on crucial infrastructure.

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