OPINION: Kaldero ni Cayetano

When Rep. Joey Salceda described the kaldero for the SEA Games at Clark as “Imeldific”, he got it right.

Joey used another word: grandiose. In other words, out of touch with reality. Joey isn’t your run-of-the-mill politician. He simply can’t help telling the truth as he honestly sees it.

I guess the economist in Joey kicked in before the politician in him did when he answered my question, and then tried to backtrack. In economic terms, the country can’t afford to spend a centavo on grandiose projects with questionable long-term social benefits.

That seems to be what Speaker Alan Peter Cayetano cannot see. It is alright for us to host the SEA Games, but in a manner appropriate to our means. We might have been the richest country in ASEAN in the ‘60s, but no more.

As it turns out, the kaldero isn’t the only questionable thing. There are reports that an American rock group was hired at quite a handsome amount in terms of our depreciating pesos. Hopefully, that’s not so, but it wouldn’t be surprising.

A foreign consultant was also engaged to manage the opening ceremonies, as if there are no Filipinos capable to do that.

BCDA has apparently also entered into a deal with a Malaysian firm supposedly to bankroll the construction of the 20,000-seater athletic stadium, the 2,000-seater aquatic center, and an athletes’ village at Clark. But most of the SEA Games will be held elsewhere. Only swimming and athletics will be at the new Clark facilities.

 A joint venture firm was organized between MTD Capital Berhad, a Malaysian company and BCDA. The Malaysians are supposed to shoulder the entire construction cost of the project, with BCDA contributing 40 hectares of the project site as equity capital.

But according to BCDA, the Development Bank of the Philippines (DBP) lent P9.5 billion to the joint venture. That means that the Malaysians are financing the sports facilities using Philippine government money.  

BCDA would acquire ownership of the facilities by paying annual installments worth P2.2 billion for five years. The BCDA shall have paid P11.1 billion to the Malaysians by the last installment.

Furthermore, BCDA has committed to share 50 percent of its profit with the Malaysians for 25 years. Smells like a sweetheart deal.

But it is done. It is up to the ombudsman to look into the deal later.

More important now is to make sure the SEA games are staged well. There are problems with unhappy volunteers and they are still rushing construction of many venues. Shuttling the athletes in Christmas season Metro Manila traffic makes everything a nightmare.

Hopefully, our athletes win the most medals as host countries are expected to. But we have not prioritized the training of our athletes.

We have even failed to assure they get proper food and nutrition. As previous SEA Games golf medalist Gretchen Malalad complained, laging walang budget.  What little budget there is ends up in pockets of sports officials.

In any case, the economics of hosting international events is a losing venture. Only Los Angeles has been able to turn a profit, but only because it relied almost entirely on existing stadiums and other infrastructure rather than lavish new facilities.

But on the whole, an article in the website of the Council on Foreign Relations (CFR) noted that hosting the games leave many host countries with large debts and maintenance liabilities.

For example, after Rio de Janeiro’s hosting of the 2016 games, the city still struggles with debt incurred, and maintenance costs for abandoned facilities.

The 1976 Summer Olympics in Montreal was pretty bad too for the city’s taxpayers. The cost overruns for a new stadium resulted in some $1.5 billion in debt that took nearly three decades to pay off.

CFR also noted the creation of white elephants or expensive facilities that, “because of their size or specialized nature, have limited post-Olympics use. These often impose costs for years to come.”

Here are some of the cases CFR cited:

“Sydney’s Olympic stadium costs the city $30 million a year to maintain. Beijing’s famous “Bird’s Nest” stadium cost $460 million to build and requires $10 million a year to maintain, and sits mostly unused.

“Almost all of the facilities built for the 2004 Athens Olympics, whose costs contributed to the Greek debt crisis, are now derelict… Greece’s billions in Olympics debt helped bankrupt the country.”

Back in Rio, “the Olympic Park is closed, with most of its facilities overrun with waste and infested with insects and rodents. The nearly 4,000 apartments that made up the athlete’s village were meant to be converted into housing for citizens, but sit vacant.

“Government attempts to auction the venues to private owners have failed, leaving the city with a $14 million annual price tag for maintenance.”

BCDA plans to privatize the maintenance and operations of the sports complex right after the SEA Games. Vince Dizon, CEO of BCDA explained that privatization would make the complex well taken care of unlike government-run facilities that quickly deteriorate.

But will there be any private sector takers? Is there even a natural market for those facilities enough to pay off debt and upkeep?

As for the facilities becoming the permanent home for Filipino athletes under the Philippine Sports Commission, wouldn’t the PSC be saddled with depreciation and maintenance costs that the private managers will charge? PSC should be investing on development of athletes, not real estate.

The grandiosity goes beyond the kaldero. Building two sports facilities for just swimming and athletics cannot be justified by our SEA Games hosting obligation. There must be cheaper alternatives. Those are monuments to Cayetano’s bloated ego.

Pero nandyan na yan. The kaldero of Cayetano should teach us some lessons in making the right priorities. But I doubt it would. 

Boo Chanco’s e-mail address is [email protected]. Follow him on Twitter @boochanco