EXPLAINER: Why is the NBI probing the 2019 SEA Games sports complex?

The National Bureau of Investigation (NBI) is set to subpoena several officials of the Philippine Southeast Asian Games Organizing Committee (PHISGOC) as it looks into alleged anomalies in the country’s hosting of the 2019 Southeast Asian Games.

Among the projects under scrutiny are the sports facilities built for the games at New Clark City in Capas, Tarlac.

But why is the NBI investigating the sports complex?

NBI Director Melvin Matibag said the agency would examine the allegedly anomalous procurement of projects connected to the SEA Games after receiving new information and documents involving PHISGOC.

Matibag also cited alleged irregularities in the construction of the sports complex.

“Bilyon-bilyon pala ’yung pumasok dito na pera na unliquidated. At mayroong private company rito na na-involve na binayaran ng P10 billion, at ang pagbabayad, insertions, through insertions sa GAA [General Appropriations Act],” Matibag said.

(Billions of pesos were supposedly poured into the project but remained unliquidated. He also said a private company involved in the project was paid P10 billion through budget insertions in the General Appropriations Act.)

The NBI director further alleged that the sports complex did not undergo the proper procurement process.

Senator Alan Peter Cayetano, who chaired PHISGOC at the time, denied wrongdoing. During the Senate impeachment proceedings against Vice President Sara Duterte, Cayetano described the NBI’s allegations as a “misfire.”

“When he said that the infrastructure had no bidding, first of all, the procurement law has many modes of procurement. So don’t make it appear to the public that just because there is no bidding, there is an anomaly,” Cayetano said in a mix of English and Filipino.

What happened before?

Covering about 9,450 hectares, New Clark City in Capas, Tarlac is a flagship project of the state-owned Bases Conversion and Development Authority (BCDA). It houses the National Government Administrative Center (NGAC) and the New Clark City Sports Hub.

“A sports stadium alone can take about four years to build, but infrastructure developer MTD Philippines, together with the Bases Conversion and Development Authority, was able to build a small city in just 18 months,” the New Clark City website said.

What did COA find?

However, the Commission on Audit (COA) said the BCDA’s arrangement to build the NGAC and the SEA Games facilities was “prejudicial” to the government’s interests.

State auditors said the BCDA added P8.5 billion for the construction of the sports facilities on top of its P4.18-billion joint venture agreement with Malaysian firm MTD Capital Berhad.

This brought the project cost to P12.695 billion. The cost of the sports complex, initially pegged at P8.5 billion, later rose to P9.535 billion because of financing charges, including interest, and variation costs.

“If only BCDA did not incorporate the construction of its sports facilities with the NGAC joint venture project, [...] the government will not entail additional expenses by paying interest or construction cost,” the COA said.

The COA said the sports facilities should have been pursued separately through a public-private partnership arrangement.

The BCDA, however, maintained that the deal had legal basis.

In 2020, the Ombudsman filed graft and malversation charges against then-BCDA president and current Public Works Secretary Vince Dizon, along with three others involved in the joint venture.

The Ombudsman said on July 16, however, that the charges against Dizon had been dismissed in 2021.

“Upon checking the records of this case, it appears that the case filed against Sec. Vince Dizon, etc. regarding the construction of the sports facilities for the 2019 SEA Games has been dismissed for insufficiency of evidence,” Assistant Ombudsman Mico Clavano said.

State auditors also flagged the financial performance of the complex. State auditors found that, from 2022 to 2023, the BCDA spent more on operating and maintaining the facilities than it earned from them. As of 2023, the sports complex had incurred losses of P15.58 million.

“Revenue from the current operations of the facilities is not sufficient to cover the cost to preserve the [New Clark City] sports complex, let alone the recovery of the construction cost of the project. If this continues, the government is burdened to shoulder the cost of maintenance of the facilities which could have been used for other programs and projects of the government,” the COA said.—Jean Mangaluz, with research from GMA DigiLab/MCG, GMA News