Christmas Island to loose major earner

JAKARTA (JP): The owner of Christmas Island Resort has appealed to the Supreme Court in Western Australia to appoint any party except Casino Austria to manage the resort in order to save the property as well as hundreds of its employees.

A director of Christmas Island Resort PTY Ltd., the private firm which owns the resort, Herman Gani, said yesterday that his party was involved in a dispute with Casino Austria International, the publicly-listed firm which has been operating the resort since 1995.

"We understand if we are not allowed to manage the resort ourselves, but please assign some other party," said Gani, adding that Casino Austria is also involved in a dispute with a casino owner in Cairns.

He said that there have been management problems since Christmas Island Resort was opened in 1993.

"Just a year after Christmas Island Resort opened the management caused the resort to suffer losses," he said.

"By November last year we suffered losses of A$28 million (US$21.5 million). We expect to encounter losses of about A$2 million per month and if the situation is unchanged, we won't be standing by the end of this year."

According to Gani, Christmas Island, a small island in the Indian Ocean, could lose a major foreign exchange earner if the dispute is not settled immediately. The resort has become the biggest economic activity on the island, which boasts 2,100 residents and more than 200 million crabs.

"In addition to mismanagement we understand that the maintenance is also very poor. We are not blaming Casino Austria, but some of the company's executives are less capable of managing the resort," Gani said

He said that based on a contract signed in 1993, Casino Austria would operate Christmas Island Resort until 1998.

The 150-room resort is owned by Indonesian businessman Robby Sumampow and Australian businessman Frank Woodmore.

"We proposed terminating the contract in 1995," said Gani. "But Casino Austria will continue running the resort until there is a legal appointment. The trial that began last August will resume in March."

Casino Austria executive Allan Tan responded by saying that the owners were prepared to go to "any lengths" to drive out his company.

The Union of Christmas Island Workers, which has called for a government-appointed administrator to take over, has misunderstood the situation, Tan said as quoted by The West Australian on Wednesday.

Gani said that Sumampow had several firms dealing in property and hotel management in Jakarta, Surabaya (East Java) and Bali.

Among Sumampow's properties are Hotel Acacia in Central Jakarta, Darmo Bukit Golf in Surabaya and a planned shopping center for Denpasar, Bali.

The 137-square-kilometer Christmas Island, controlled by Australia, is situated about 3,000 kilometers north of Perth and 500 km south of Jakarta. Christmas Island Resort opened in November 1993 and has since become popular with Indonesians for its gambling, which is illegal in Indonesia.

Gani said that the resort recently hired 350 workers but that it has become less popular in recent years due to ineffective promotion. (icn)