In recent developments concerning the Outer Harbour Ferry Terminal in Macau, the government has awarded Sociedade de Turismo e Diversões de Macau, S.A. (STDM) a new contract, diverging significantly from the previous agreement. This contract, effective for 60 months, introduces flexible profit-sharing terms and operational freedoms for STDM.
Previous Agreement Overview
Under the prior contract, which spanned 66 months from November 2018, STDM paid a fixed monthly amount to the government. This arrangement was structured with quarterly payments totaling MOP$1,800,800 (US$224,000). The government’s decision to tender the terminal’s operations was announced in February but subsequently awarded to STDM in May, under a new set of conditions.
New Contract Details
The recent contract affords STDM the authority to determine the terminal’s operating hours and the allocation of various facilities, including waiting rooms and berths. Unlike the previous fixed payment model, STDM is now obligated to share 18% of its pre-tax profits from the terminal with the government annually. Moreover, the contract mandates STDM to submit financial reports by March 31st each year, enhancing transparency.
Financial Implications
The shift from a fixed payment to a profit-sharing mechanism reflects a strategic change aimed at aligning the interests of STDM with the operational efficiency and profitability of the terminal. This model not only offers potential financial benefits to the government but also incentivizes STDM to optimize operations for mutual gain.
Governance and Control Measures
A notable inclusion in the new contract is a provision allowing the government to terminate the agreement if STDM’s cumulative share transfers exceed 50% of its total shares during the contract period. This safeguard ensures that the operational control remains within acceptable limits and prevents undue influence from external entities.
Stakeholder Dynamics
STDM, primarily controlled by an alliance led by Pansy Ho and including the Fok Foundation, holds a majority stake in Macau concessionaire SJM Resorts S.A. This background underscores the significant role of key stakeholders in shaping Macau’s ferry terminal operations and broader economic landscape.
The revised contract for the Outer Harbour Ferry Terminal in Macau marks a departure from fixed payments to profit-sharing, aiming to enhance operational efficiency and transparency. The agreement’s flexible terms and governance measures are designed to benefit both STDM and the government, fostering a sustainable and mutually beneficial partnership in Macau’s transport infrastructure sector.