China State Construction Engineering Corporation (CSCEC), a state-owned enterprise of the Chinese government whose subsidiary China Construction America (CCA) has some history of complicated casino resort construction dealings, has allegedly claimed that Queensland taxpayers could have been on the hook for $1.2 billion if the state government didn’t approve their $3 billion casino resort that is to be located on the Southport Spit near Gold Coast in Queensland, Australia.

CSCEC is part of the ASF Group, an ASX-listed company with plans to construct a casino resort with five hotel towers and a 5-hectare footprint. In a recent media statement, Gold Coast Integrated Resort emphasized that ASF Consortia, rather than ASF Group would deliver the project. The statement read in part: “It is expected that the Consortium members will include ASF Group, China State Construction Engineering Company, a Tier 1 casino operator, and at least one other Cornerstone Entity.”

In late 2016, Crown Resorts was identified as the casino operator. However, those plans may have changed with several unrelated developments in Crown’s business.

The project was originally slated for Wave Break Island, but development on the environmentally sensitive site was banned in 2015.

According to a report attributed to media outlet, The Australian, a prominent town planner from Gold Coast told the newspaper that about a year ago he was in talks with CSCEC in regard to another multi-billion dollar project in the area when a senior executive told him about the potential for CSCEC to make a legal claim over the planned development.

“We were in discussions over another matter and she said that when the rug was pulled on Wave Break Island they received legal advice they had an action against the state government for $1.2bn,” Southport planner Ross Heatley is reported to have said.

Some media reports seem to imply that the Chinese company’s position could have influenced the Queensland government’s decision some four months after the Wave Break Island was protected from large development, to allow the project to proceed at the Southport Spit site – but that is as yet unclear. On Friday CSCEC and the ASF Group, as well as the office of State Development Minister Anthony Lynham declined to comment but did not deny, according to a report on the US China News website today.

The ASF Consortium’s media statement of March 8, clarifying the differences between the “Group” and the “Consortia” may be in response to news stories indicating that consortium member, ASF Group has lost the lion’s share of $102m raised from investors, while CSCEC has a far-reaching balance sheet with annual profit in FY15 of nearly $10 billion and is one of the main proponents of the project.

International readers and industry observers may recall CSCEC subsidiary CCA was at the center of a dispute regarding the Baha Mar project in the Bahamas. The original developer faced delays, while each side blamed the other, that eventually resulted in the project going into receivership. Chow Tai Fook Enterprises eventually agreed to acquire a special investment vehicle created by Export-Import Bank of China that will deliver them ownership of the $4 billion resort once it is fully operational.

Baha Mar is expected to launch with a soft opening of their casino, a hotel, and supporting amenities on April 20, 2017.

Chow Tai Fook Enterprises is the parent company of Rosewood Hotels and Resorts, one of the hotel facilities originally planned for Baha Mar. The Rosewood component is not expected to open until 2018.

In a statement that echoes some of the controversy and complaints surrounding the Baha Mar debacle, Heatley has reportedly said that the Queensland government has not provided any details in regard to contracts with ASF Group. “The issue is, did the [previous] Newman government fail to put in the standard government clause voiding liability for costs incurred by private enterprise when bidding on government projects?

“It’s been impossible to get any briefs or any documents,” according to a statement published in US China News, but most likely originating with The Australian.

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