Imperial Pacific International is facing further disruption at its unfinished Saipan property after new visa regulations further dried up the labor pool available to complete the long-delayed project.
The U.S. Department of State recently removed the Philippines from the list of qualifying countries for the U.S. H-2B worker visa program, along with the Dominican Republic and Ethiopia, due to concerns about overstaying.
The Northern Mariana islands are a U.S. commonwealth in the Pacific Ocean, with a permanent population of about 55,000. As a result, the islands are heavily dependent on imported labor, especially in the trades, such as masons, plumbers and carpenters.
There were a total of 844 H-2B visa holders working at the IPI construction site but that figure would be slashed by almost half with the departure of the workers from the Philippines, which has been a great source of skilled labour for both the CNMI and Guam due to their geographic proximity.
The State Department ban took effect on Jan. 19 and extends through to Jan. 18 next year. The decision, won’t affect workers who still have valid H-2B visas but they will no longer be eligible for an extension. There were already reports that petitions for Filipino nationals who were supposed to arrive to replace the workers that had expiring H-2B visas have been denied.
In February, the Department of Labour granted Imperial Pacific’s request for exemption from a requirement that 30 percent of its construction workers come from the U.S. However, that won’t make up for the lack of Filipino labour.
Granting the extension, CNMI Labor Secretary Vicky Benavente noted the difficulty in finding U.S. construction workers. Only about 1 percent of construction workers currently registered with the CNMI Department of Commerce are U.S. citizens.
Hong Kong-listed Imperial Pacific won the license to operate Saipan’s only casino in 2014, with the ambitious project launched amidst much optimism the island’s pristine beaches would pull in VIPs from China and Northern Asia. Early figures detailing monthly rolling volume at a temporary casino appeared to confirm the promise, though the company has since stopped monthly reporting after transferring to its new premises in 2017. Gross casino revenue in the first half of 2018, the most recent figures available, had dropped to HK$3.6 billion, compared with $7.3 billion in the comparable period a year earlier.
The resort has already faced numerous delays, blamed mostly on the disruption caused by Typhoon Soudelor in 2015 and labour issues, including an illegal hiring scandal involving one of its main contractors.
Scheduled to open in August 2017, the property has now been given an extension until February 2021.
Imperial Pacific Interim Chairman Mark Brown said IPI is trying to hire construction workers in South Korea and Taiwan, which are on the DHS list of H-2B eligible nations.
"We are going to be on target to get the project done on Feb. 28, 2021. We are working right now to finish the beachfront resort, the 15 villas and the pool area. We will finish those portions first for the VIPs. Then we will go back and finish the tower and the whole front," he told local media.
The company is also beginning to install a giant crystal dragon ceiling installation, for which they have brought in a team of technicians.
Brown returned to the company in October last year after stepping down as CEO in December. Since then, the company has seen a revolving door of executives, including Henry Cheang, who had been serving as both CEO and chairman of IPI since former chairman Marco Teng stepped down in August after only eight months in the position.
The State Department’s decision will not only further slowdown the construction of the flamboyantly-designed Imperial Pacific Resort, but also other tourism-related projects that are being developed.
CNMI officials say the worker shortage could affect the development of the islands, which were beginning to see economic gains after years of inactivity. The CNMI economy grew 28.2 percent in 2016 from 3.4 percent in 2015, while posting stable 25.1 percent growth in 2017. The rebound was driven mostly by increased tourism and casino revenues.
Gov. Ralph DLG Torres said it is now the time for Gregorio Kilili C. Sablan, the CNMI’s non-voting delegate to the U.S. Congress, to use his influence and connections with the Democratic Party-led House of Representatives in looking for a possible solution to the worker crisis. “All our construction workers are H-2Bs. Now that the Philippines is out, where do you expect our businesses to get the workers they need? I’m not sure how many workers are affected, but it is pushing us to even worse than where we are at.”
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