The chances of Galaxy Entertainment Group completing its Cotai resort, known as Galaxy Macau, by its self-declared first quarter 2011 deadline appear to be receding after the government slashed 1,000 non-resident workers from its Cotai workforce.
The government seems to have lost patience with Galaxy for allegedly not meeting its ‘one for one’ policy announced in April—i.e. one local construction worker for every non-resident used. The non-resident workers sent away in the past few days represent about a third of the workers on the Galaxy Macau site.
Wong Chi Hong, Coordinator of the Human Resources Office, disclosed the news at the Legislative Assembly yesterday. But privately Galaxy had known for some weeks that it had a potential problem. That was why despite the fact that publicly it was sticking with its Q1 2011 opening date, behind the scenes its marketing team was advising third parties of possible ‘adjustments’ to the timetable. Galaxy declined to comment to Asian Gaming Intelligence on the developments.
Galaxy is not the only operator hit by the ‘one for one’ policy. In mid-May, Sands China, the local unit of Las Vegas Sands Corp, said it needed 10,500 building workers in order to recommence its USD4.2 billion Macau project known as Cotai plots five and six (but in reality a massive resort in its own right costing almost twice as much as The Venetian Macao).
Yet a few weeks before LVS’s statement, the Macau government appeared to paint itself into a corner by announcing, under popular pressure from a noisy and street demonstrating lobby of the long term unemployed, that in future, construction projects would need to employ one local for every migrant worker brought on site. The problem is that during 2009 only 2,500 unemployed locals surveyed by Macau’s Labour Affairs Office (DSAL) said they were looking for jobs in construction.
Macau is now making noises about training locals to fill new construction jobs. Industry sources argue with some justification it’s a bit late to start thinking about that only weeks before a massive multi-billion US dollar project is scheduled to start. The overall and not entirely favourable impression is of a government making policy on the hoof, in knee-jerk response to populist pressure, rather than of a government planning strategically for the medium to long term.
It’s hard not to feel sympathy with Galaxy and the other gaming operators with construction projects on Cotai over the apparent capriciousness of the government.
Here’s what the Project Management Institute, an international advisory and training body with branches in Beijing, Hong Kong and Singapore, says on its website about the importance of strategic planning in construction.
“As the number of projects swell, the pool of credentialed [sic] talent is not keeping pace. In the Persian Gulf and China Sea regions alone—where entire cities are being built, seemingly overnight—a shortage of six million skilled project professionals is expected by 2013. Add to that the fact that, of the 20 million people participating in projects worldwide, just one million have professionally recognised formal training on how to best execute those projects. One thing becomes clear: The demand for skilled project managers is at a critically urgent level.”
The Macau government has known since 2002 that it planned an unprecedented expansion of the gaming industry both in terms of infrastructure and supporting services.
One rational response to this structural challenge for the economy would have been to set up a strategic construction education programme to update skills and training for local building workers or retrain local workers from other sectors so that they can take up better paid jobs during the construction boom.
Instead what the Macau government did was wait until the Macau casino building boom had been in full swing for five years before announcing on the eve of a US$4.2 billion construction project by Sands China that it was the responsibility of the private sector to somehow find local workers with the necessary training and skills (and motivation) to work in construction.
The former Portuguese administration must take some responsibility for the mess for its failure to train sufficient numbers of local Chinese as administrators and policy advisors prior to the return of Macau to Chinese sovereignty in 1999.
In case all this sounds like analyst hyperbole, here’s an exchange between the head of Macau’s Labour Affairs Bureau (DSAL) and a legislator as reported today by the Macau Daily Times.
“He [DSAL director Shuen Ka Hung] agreed with lawmaker Tsui Wai Kwan’s idea of establishing a vocational training council to enhance the organisation and implement an occupational skill testing system. Yet, he pointed out that training facilities for some of the occupations require a “huge investment” but not many people will enrol into those courses, and thus “the expected results cannot be achieved”.”
In other words, the official line from the government seems to be that such is the sense of self-entitlement of the local population that they wouldn’t take up construction and other retraining even it we offered it to them, so therefore we won’t bother.
It would be difficult to imagine such an attitude–especially among the Chinese, an ethnic group noted around the world for their industriousness–had it not been said in public with journalists present. It leads outside observers to wonder does Macau actually deserve a world class gaming industry? Or does it have one despite, rather than because of, the attitude of its people and government?
