A prejudicial deal

"I have been smelling a rat for the longest time."


During the Southeast Asian Games hosted by the Philippines last year, I wrote about the questionable deal between the Bases Conversion Development Authority and a Malaysian firm called MTD Capital Berhad. I found this deal questionable and prejudicial to the interest of the government and taxpayers. Santa Banana, this joint venture cost us taxpayers billions of pesos!

Last October 5, during the budget hearings at the Senate on BCDA's P5.795-billion budget for 2021, Senator Nancy Binay called the attention of BCDA President Vince Dizon, who is now also with the Inter-Agency Task Force on the Management of Emerging Infectious Diseases, to the observation of the Commission on Audit that the deal with the Malaysian firm was prejudicial to the government.

When the COA first flagged this deal, I became curious and started making inquiries. I started to have many questions – did this amount to large-scale corruption?

Recall that Government Corporate Counsel Rudolf Philip Jurado was on record having a contract review dated January 30, 2018 regarding the draft of this joint venture. Jurado, incidentally, is my nephew.

The multi-billion-peso venture was intended for the construction of the National Government Administration Center at the New Clark City in Capas, Tarlac. This would serve as a back-up government office. There was also the construction of sports facilities that included a 20,000-seater athletic stadium, a 2,000-seater aquatic center and an athletic village to be used for the 2019 SEA Games.

Based on Jurado’s review of the joint venture agreement, the total contract price for the project of BCDA and MTD was P12.695 billion: P4.185 billion for the NGAC and P8.510 billion for the sports facilities.

Based on records, the alleged JVA constituted MTD’s cost of construction and BCDA’s 40 hectares out of the entire government land in Capas, Tarlac. As a lawyer, I know quite well that a JVA consists of the contribution of each partner. They will have a 50-50 share of all costs and profits.

This review must be hurdled by all Government-Owned and -Controlled Corporations when they enter into any deal or contract.

In his contract review, Jurado concluded that the construction of the sports facilities was actually a Build-and-Transfer scheme disguised as a joint venture agreement. Jurado said this should have undergone a public bidding process, my gulay!

He likewise opposed Section 8 of the JVA as it required the BCDA to reimburse the Malaysian firm all the expenses, which the latter could spend, in addition to receiving the share of the profits.

He directed the BCDA to revise Section 8 to comply with the applicable laws, and suggested that BCDA not reimburse MTD for construction costs.

Jurado, not convinced of the legality of the intended joint venture, did not issue the necessary Counsel’s Opinion that would have allowed BCDA to continue with the intended transaction.

And yet, on February 22, 2018, despite the absence of said Counsel’s Opinion, the BCDA still proceeded with the JVA with MTD. Santa Banana, worse, it appears that the deal actually had an insertion or a new provision, which granted MTD an additional amount of P2.490 billion described by the BCDA as “reasonable costs and returns” for the construction of the sports facilities.

My gulay, this means that the total contract price ballooned to P11 billion. The Malaysian company never had it so good! I also asked – what was in it for the BCDA?

My nephew was eventually removed as Government Corporate Counsel in May 2018.

On October 2, 2018, the new counsel, Elpidio Vega, took over and eventually issued a new legal opinion or contract review on behalf of BCDA, saying that the JVA was legal and above board. Just how the deal became this, I have no idea.

Note that the BCDA has given no answer. It has not yet responded to questions why it proceeded to execute the JVA despite the absence of the necessary counsel’s opinion.

Going back to the Senate hearing early this week, when Senator Binay questioned Vince Dizon on the COA report that the BCDA committed an act prejudicial to the government with this agreement, a GMA report said that Dizon proceeded with the JVA was because the Office of the Government Corporate Counsel, under Vega, had confirmed its legality.

This is where I smelled a rat again. How could they defend the deal as legal and above board? Perhaps Vega should explain himself. What made him reverse the opinion of his immediate predecessor?

Just for the record, there was no Malaysian money used in the JVA. The Malaysian firm was able to borrow P9.5 billion from the Development Bank of the Philippines. This is why I also earlier asked what the collateral was. And it did not even spend all of that in the project – where did the rest of the money go?

I urged the Ombudsman to look into this deal, but there was no response to this. I also urged the President to ask his own questions about this JVA, but he seems to have turned deaf. Why?

With pressing questions about this deal, how can he make us believe in his anti-corruption campaign?

The Senate should be asking Dizon more questions.

Topics: Southeast Asian Games , Bases Conversion Development Authority , MTD Capital Berhad , Vince Dizon , Nancy Binay , National Government Administration Center , New Clark City
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