BCDA maintains SEA Games deal above board amid COA findings

State-run Bases Conversion and Development Authority (BCDA) on Friday stood firm on the legality of its P12-billion deal for the construction of the National Government Administrative Center and facilities used in the 2019 Southeast Asian Games in New Clark City.

The Commission on Audit has flagged as disadvantageous to the government BCDA's joint venture deal with Malaysian firm MTD Capital Berhad as it supposedly made the government spend P1 billion more.

According to COA, the government spent P1 billion more because BCDA decided to incorporate the P8.5-billion construction of sports facilities and athlete's village with the initial P4.18-billion joint venture deal with MTD Capital Berhad.

In a statement in response to the COA report, BCDA cited the October 2018 legal opinion of the Office of the Government Corporate Counsel (OGCC) which states that development of sports facilities can be financed through Public Private Partnership (PPP) under the following modes:

• Build-Operate-Transfer;
• procurement;
• joint venture;
• lease;

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• concession; and
• disposition or divestment

“In view of the discussion above and the representations of BCDA, we confirm that the provisions of the executed JVA and the legal framework of the Project are in compliance with the existing laws, rules and regulations. BCDA can undertake the [NGAC] Project,  including the development of the Sports Facilities, using any of the above enumerated PPP frameworks,” the BCDA quoted OGCC as saying.

“Considering that the legal, financial and technical aspects of the Project should be taken as a whole, it is our opinion that the choice of modality or legal framework of the Project is part of the business prerogative of the BCDA in pursuance of its statutory mandate to develop and accelerate the sound and balanced conversion of Clark military reservations and its extensions,” it added.

COA earlier said BCDA cannot invoke business prerogative in the P12-billion deal because BCDA is not exempted from compliance with the requirements of the Procurement Law and the Act Authorizing the Financing, Construction, Operation and Maintenance of Infrastructure Projects by the Private Sector, and for Other Purposes (Republic Act 6957).

“The construction of the Sports Facilities was a procurement activity financed by public funds, and therefore, should have been subjected to more stringent requirements of RA 9184 and RA 6957, whichever is applicable,” COA said.

The original P4.18 billion deal only involved the construction of government buildings, commercial centers and residential housing.

Under the revised P12-billion joint venture deal, the BCDA will pay MTD Berhad P9.539 billion instead of P8.5 billion for the construction of sports facilities that were utilized during the 2019 SEA Games.

The P9.539 billion was broken down to: P8.5 billion for cost of sports facilities, P579 million payment for one-year financing cost and the remaining amount going to variation orders “made upon the recommendation of the Technical Delegates of the International Association of Athletic Federation (IAAF) and Federation Internationale de Natation (FINA), Philippine SEA Games Organizing Committee (PHISGOC) and Asian Development Bank.” —KBK/KG, GMA News