The Bureau International des Expositions (BIE) has recently requested that the Osaka government halt the construction of MGM Resorts’ integrated resort project on Yumeshima Island for about six months during the 2025 World Expo. The Expo, which will take place on the adjacent land from April to October 2025, is a major global event that aims to showcase the best of Osaka and Japan. The BIE’s request is driven by concerns about noise, visual impact, and environmental issues arising from ongoing construction. Despite these concerns, local officials are considering rejecting the request due to potential contractual repercussions.
Concerns Raised by the BIE
The BIE’s request for a construction pause is rooted in several concerns about the impact of the MGM Resorts project on the World Expo experience. Primarily, the BIE is worried about the potential disruption caused by construction equipment, which may be visible to Expo attendees. Additionally, there are concerns about the noise generated by construction activities, which could disturb visitors and detract from the overall Expo experience. Environmental impacts, such as the potential deterioration of surrounding land, are also a significant consideration.
The World Expo 2025 Context
The World Expo 2025 is set to be a major event held on Yumeshima Island, right next to the MGM site. As one of the largest global exhibitions, the Expo is expected to draw millions of visitors. The proximity of the integrated resort project to the Expo site makes it crucial to ensure that construction does not interfere with the event’s smooth operation. The BIE’s concerns reflect the importance of maintaining a high-quality experience for Expo attendees, who will be exposed to both the event and the adjacent construction activities.
Current Status of MGM Resorts’ Project
MGM Resorts has been actively working on the 21-hectare Yumeshima site since late last year. The focus of the current construction phase is on land preparatory work, specifically addressing issues related to liquefaction to ensure a stable foundation. This preparatory work is scheduled to continue throughout the duration of the World Expo and is expected to be completed by April 2027 at an estimated cost of JPY 25.5 billion ($173 million). The integrated resort’s completion has already been delayed by a year to 2030, reflecting the complex nature of the project.
The signing of the Implementation Agreement for the Osaka IR in late September marked a significant milestone for the project. This agreement, between MGM Resorts International and local partner ORIX Corporation, formalizes the development process and sets the stage for future construction phases.
Local Government’s Position and Risks
The Osaka government faces a challenging decision regarding the BIE’s request. On one hand, accommodating the request could enhance the World Expo experience by reducing construction-related disruptions. On the other hand, halting construction carries significant risks, including the possibility of MGM Resorts triggering a contract clause that allows for the termination of the development agreement until September 2026.
Local officials, including Governor Yoshimura Hirofumi, are currently deliberating on the best approach. They must weigh the benefits of potentially improving the Expo experience against the economic and contractual risks associated with delaying the project. The possibility of project termination poses a substantial concern, given the scale and importance of the integrated resort development.
Potential Implications of the Pause
A six-month construction pause could have several implications for both the World Expo and the integrated resort project. For the Expo, reduced noise and visual disruptions could improve the visitor experience and contribute to the event’s success. However, the impact on the long-term development of the integrated resort could be severe. Delays in construction might affect project timelines and financial investments, potentially leading to broader economic consequences for both MGM Resorts and the local economy.
Finding a balanced solution that addresses the BIE’s concerns while safeguarding the ongoing development of the integrated resort is crucial. Local officials need to carefully consider how to manage construction activities to minimize disruptions without compromising the project’s progress.
The debate over the proposed construction pause for MGM Resorts’ integrated resort project highlights the complexities of managing large-scale developments alongside major global events. The BIE’s request reflects a concern for maintaining a high-quality experience for World Expo visitors, while local officials must navigate the risks associated with project delays and potential contract termination. The outcome of this decision will have significant implications for both the Expo and the future of Osaka’s integrated resort, underscoring the importance of strategic planning and effective stakeholder management in such high-profile projects.