BCDA denies onerous agreement with Malaysian firm

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(FILE PHOTO)

Metro Manila (CNN Philippines, November 22)— The Bases Conversion and Development Authority (BCDA) denied signing a loan with a Malaysian firm to fund the construction of sports facilities at the New Clark City.

This is in response to news reports indicating that the BCDA entered into a funding scheme with MTD Capital Berhad that would give the firm a ₱2.5 billion return and a 50-50 share in the income of the sports facilities that would be used for the Southeast Asian (SEA) Games. The firm is in charge of construction of the New Clark City Phase 1A project.

The BCDA claimed the MTD has been allowed to find its own sources of financing, independent of the Philippine government. It added that based on its agreement, the government will pay the firm in full to avoid accruing interest.

"One of the payment options in the joint venture terms is to pay AlloyMTD ₱2.2 billion per year; but to avoid paying more interest charges, the government opted to pay in full upon completion and acceptance of the sports facilities as approved and reflected in the 2019 General Appropriations Act," the BCDA said in a statement.

The government has earmarked a ₱9.5 billion budget for the facilities.

BCDA added that it has also yet to pay MTD for its services. Construction is still ongoing on SEA Games facilities.

"The developer has undertaken the project of building New Clark City Phase 1A through its own sources of financing. To this date, the government has not paid a single centavo to AlloyMTD," the BCDA said.

MTD Capital Berhad is a Malaysia-based investment holding company with interests in civil engineering, construction, infrastructure development, real estate and property development, among others.

According to its website, the company has also established an "active" presence overseas, with projects listed in different countries including Australia, Indonesia, India, Saudi Arabia, Sri Lanka, and the Philippines.

Senate Minority Leader Franklin Drilon mentioned the BCDA deal in an interview on local news network ANC. Online news site Rappler also ran the story.