The Macau Jockey Club racetrack in Taipa
The Macau Jockey Club (MJC) was yesterday granted a 24-year concession in a surprise move that appears to have caught off-guard the company’s own director.
The government yesterday revealed that the MJC will be permitted to continue its “exclusive operation of horse racing” until August 31, 2042, but with strings attached.
Under a plan presented to the government, the company is to invest between MOP1.5 billion and MOP2 billion for the improvement of the site’s facilities and for the development of non-gambling activities. Lawmaker and a director of SJM Holdings, Angela Leong, said yesterday that the company’s diversification plans may include a riding school for children as well as a shopping center.
The details of the plan are expected to be revealed today in the government’s Official Gazette.
The government said that should the company fail to adequately invest in the facility, its concession would be suspended.
The new concession’s 24-year lifespan took many by surprise, including – possibly – the director of the Macau Horse Racing Company, Thomas Li, who told Ponto Final on the weekend about his confidence that a new concession would last “over two years.”
The agreement announced yesterday, around 12 times longer than that estimated by Li, was justified in a statement from Secretary for Economy and Finance Lionel Leong, who said that the concession would help to develop Macau as a world center of tourism and leisure.
“Everyone knows that there have always been losses in the past. We hope that with this large investment the company can reverse its financial situation and, more importantly, contribute to the Macau SAR Government with more non-gambling elements,” Lionel Leong said yesterday, according to Radio Macau.
The secretary refused to take questions from journalists on the matter.
The Macau Horse Racing Company has posted annual losses since 2004, accumulating a deficit exceeding MOP4 billion and debts amounting to MOP1.3 billion.
For this reason, economist and animal rights activist Albano Martins is doubtful that a MOP1.5 billion injection can be put to good use.
“It doesn’t make sense to invest MOP1.5 billion in a company that is [essentially] bankrupt,” he told the Times yesterday. “The company will need to pay off its debt with some of that money and after that, what remains [of it]?”
Moreover, Leong is also insisting that the company work to pay its outstanding tax obligation to the government sooner than previously thought. This will represent a further drain on the MOP2 billion injection.
Asked about the possible intentions behind the 24-year concession, Martins speculated that “the concession is for [MJC] to redevelop the land – I can only assume – for real estate purposes.”
“[But] the decision to grant the concession was, in political terms, a very unwise decision,” he added. “This is land that could be used for housing or schools. Nobody gives that sort of concession for a company that is broke. It is very strange. In terms of [socio-economic] cost-benefit, this decision is a disaster.
Martins thinks that the official terms of the concession, which according to Macau law must be published today in the Official Gazette, will outline the proportion of the Jockey Club site that can be utilized for non-horse-racing activities, such as real estate.
The silver lining for Martins is that he believes that the new deal with mark the final days of the company’s horse-racing activities.
“[Soon] they will not have any animals there, so I am very happy that this business is finishing. My only point [of concern] now is that of an economist.”
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