BCDA

Hontiveros seeks Senate probe into P9.5-B loan for 2019 SEA Games facilities

JC Gotinga
Hontiveros seeks Senate probe into P9.5-B loan for 2019 SEA Games facilities
What's the point in entering a joint venture with Malaysian firm MTD Capital Berhad, when it financed the project with a loan from a Philippine government bank? Senator Risa Hontiveros wants answers.

Senator Risa Hontiveros on Tuesday, November 10, called on the Senate to launch a legislative probe into a P9.5-billion loan allegedly “facilitated” by the Bases Conversion and Development Authority (BCDA) to build sports facilities at New Clark City for the 2019 Southeast Asian (SEA) Games.

The opposition senator questioned whether the BCDA entered into a “fake joint venture” with Malaysian firm MTD Capital Berhad, because MTD financed its share of the project with a P9.5-billion loan from the government-owned Development Bank of the Philippines, according to findings by Hontiveros’ office.

In effect, MTD did not actually put out any money for the supposed joint venture, Hontiveros said in a privilege speech on Tuesday afternoon.

Meanwhile, the BCDA would be paying MTD an aggregate P11.1 billion. In the 2019 national budget, the Department of Budget and Management (DBM) gave the BCDA P9.54 billion to may the Malaysian developer.

“Then what is this supposed joint venture for, when BCDA paid the amount to MTD using public funds appropriated in the 2019 national budget?” Hontiveros said.

The senator also urged the Senate to inquire whether the P9.5-billion loan secured by MTD Capital Berhad was a “behest loan” – one granted to firms favored by top government officials.

“Hindi kaya na naglabas agad ng loan ang DBP dahil nilakad ng BCDA? At ano ang collateral na inilabas para dito? Nasuri ba nang mabuti ang capitalization ng MTD at ang cash flow ng project?” Hontiveros said.

(Could it be that the DBP immediately granted a load because the BCDA facilitated it? What collateral was given for this? Were MTD’s capitalization and the project’s cash flow examined properly?)

The joint venture was signed in February 2018, and the following month, MTD already secured the loan from the DBP, Hontiveros pointed out.

“That’s very fast. Why can’t this be done for other government projects? And without the involvement of the BCDA, would this loan have been granted at such record speed?” she added.

Read Rappler’s 3-part investigation on this project:

In its 2019 Annual Audit Report, the Commission on Audit (COA) said the project should have been done under a build-transfer arrangement according to the Build-Operate-Transfer Law – not as a joint venture.

The COA added that the joint venture “was prejudicial to the interests of the government because, among others, the project should have gone through the more stringent public bidding requirements.”

Because of this, Hontiveros said it appears that the project was packaged as a joint venture to evade the rules on public bidding.

The Office of the Government Corporate Counsel (OGCC), at the time headed by Rudolf Jurado, also issued an opinion adverse to the project. Jurado, too, said the project should have been done in the build-transfer mode.

However, President Rodrigo Duterte later replaced Jurado with Elpidio Vega as OGCC chief. Under Vega, the OGCC reversed its opinion of the project, and declared the joint venture agreement as above-board.

Vega, BCDA president Vince Dizon, and MTD Capital Berhad director Isaac David now face graft and malversation complaints over the issue.

In her privilege speech, Hontiveros asked whether the sports facilities at New Clark City would end up becoming a “white elephant” – useless and costly to maintain?

Hontiveros seeks Senate probe into P9.5-B loan for 2019 SEA Games facilities

Senator Pia Cayetano took offense at this, and accused Hontiveros of politicizing a project that is much-deserved by Filipino athletes. Cayetano is the sister of Taguig-Pateros Representative Alan Peter Cayetano, who was among the top managers of the country’s hosting of the 2019 SEA Games.

Hontiveros said the issue was the possibility of corruption in the financing of the project, and she did not mean to discount the value of the project and its importance to athletes. – Rappler.com

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JC Gotinga

JC Gotinga often reports about the West Philippine Sea, the communist insurgency, and terrorism as he covers national defense and security for Rappler. He enjoys telling stories about his hometown, Pasig City. JC has worked with Al Jazeera, CNN Philippines, News5, and CBN Asia.