High stakes: $260 million cost blow out for Queen’s Wharf as project opening delayed again
The opening of the Queens Wharf casino and resort project has been delayed again with costs blowing out by at least $260 million.
The Queen's Wharf casino and resort development has been delayed again
Star Group said the Queen’s Wharf project was now expected to open sometime in the second half of 2023 because of rain delays in the construction. Its previous guidance was for mid-2023 and it was originally expected to open this year.
“Total project costs are expected to up about 10 per cent on prior guidance of $2.6 billion due to escalating construction material costs, labour shortages, supply chain challenges and the program delay as well as the inclusion of capital equipment related to open the integrated resort development,” Star said.
“Pre-opening and other operational costs would be in addition to this estimate.”
The company said it would fund the contributions through increased equity from project partners. The Star owns 50 per cent of the project while Hong Kong’s Chow Tai Fook and Far East Consortium own 25 per cent each.
Star said it was still in dispute with Multiplex over its claims on additional costs and time extensions and said the expected additional costs may be adjusted depending on the outcome of negotiations with the developer, which may include liquidated damages.
Earlier this week the State Government, which has been a strong supporter of the Queen’s Wharf development, said towers one and four of the project were at level 25 and towers two and three were at the 19th level.
Deputy Premier Steven Miles said about 1700 workers were on site and the link bridges that hold the Sky Deck would be in place.
Star said its Gold Coast joint venture was also exploring options for its 50 per cent stake in the Sheraton Grand Mirage resort.
The company has been through a disastrous year with damaging revelations about alleged money laundering at its Sydney casino. It was now preparing for an inquiry which includes public hearings into its operations in Queensland.
But in a rare bright spot it said its casinos on the Gold Coast and in Brisbane were operating above pre-Covid levels. The Star Gold Coast saw domestic revenue jump almost 50 per cent on pre-Covid levels as tourism recovered. Brisbane’s Treasury casino domestic revenue was up 13 per cent on pre-Covid levels.
It said it expected to finalise the $170 million sale of its Treasury assets in Brisbane in the first half of 2023.
Star said it expected normalised revenue for the 2022 year to be $1.53 billion.