BCDA says SEA Games deal with Malaysian firm complied with laws

The Bases Conversion and Development Authority (BCDA) on Friday belied a report that its joint venture deal with a Malaysian firm to build sports facilities in the New Clark City in Capas, Tarlac was "questionable."

"The Office of the Government Corporate Counsel (OGCC), in its Opinion No. 182, s. 2018, confirmed that the 'provisions of the executed JVA (joint venture agreement) and the legal framework of the Project are in compliance with the existing laws, rules and regulations'," the BCDA said in a statement.

The agency made the statement as a report by Rappler said that an "informed source" claimed that the JVA between BCDA and MTD Capital Berhad yielded questions in a review done by the OGCC.

"The provisions in the construction of the sports facilities are very advantageous to the government because under the terms, BCDA will not pay a single centavo until the facilities are completed and accepted," it said.

"One of the payment options in the joint venture terms is to pay MTD P2.2 billion per year," it added.

However, to avoid payment of additional interest, the BCDA said the agency and the national government opted to pay in full upon completion and acceptance of the sports facilities as approved and reflected in the 2019 General Appropriations Act (GAA) passed by Congress.

The BCDA earlier said that the P9.5-billion budget for the sports facilities was funded under the GAA.

"This means that upon full payment and complete turnover to BCDA, BCDA will receive 100% share of the revenues. To date, BCDA has not made any payment to MTD," it said.

"MTD has undertaken the project through its own sources of financing. BCDA did not enter into any loan agreement and we did not borrow a single centavo for this development," it added.

Sought for comment, MTD Philippines president Isaac David agreed with the statement of the BCDA.

"[In] the stament, BCDA answered the Rappler report accurately. It's the truth and we agreed to it," David said in a text message.

The New Clark City is on track to becoming the country’s first smart, green, resilient and fully master-planned metropolis, according to the BCDA.

"This project was conceptualized and initiated during the Aquino administration, and was continued and fast-tracked by the Duterte government," it said.

"One of the key elements in getting this flagship project built in just 18 months since it broke ground in January 2018 was the transaction advisory services provided by the Asian Development Bank (ADB) all throughout the process," it added.

The Phase 1A of the New Clark City project, which includes sports facilities built for the upcoming SEA Games, was developed through a joint venture agreement between BCDA and Malaysian firm MTD Capital Berhad.

As to the mode in the development of the sports facilities, the BCDA said, citing the OGCC that “under the Philippine setting, there are six available PPP (public-private partnership) frameworks: Built-Operate-Transfer; Procurement; Joint Venture; Lease; Concession; and Disposition or Divestment

"Thus, BCDA can undertake the Project including the development of the Sports Facilities using any of the above enumerated PPP frameworks," it said.

"According to ADB, a joint venture was the best mode, to which the OGCC concurred," it added.

As to the cost, the BCDA said the unsolicited proposal of MTD underwent extensive evaluation.

"[The] BCDA and ADB were able to negotiate the project cost of sports facilities down by almost 50%. The proposal was also subjected to a competitive Swiss challenge," it said. —LDF, GMA News