Baguio to terminate Discaya contract over unfinished tennis courts
BAGUIO CITY—The city government here has begun the process of terminating a contract awarded to a company owned by couple Pacifico “Curlee” and Cezarah “Sarah” Discaya in 2022, or three years before they were implicated in a public infrastructure kickback scheme now under investigation by the Independent Commission for Infrastructure (ICI).
Stephen Capuyan, deputy chief of the City Building and Architects Office (CBAO), said during the council session on Monday that his office has already issued St. Gerrard Construction (SGC), the Discaya-owned firm, a notice of termination and has given the company time to respond as part of due process before recommending final action.
According to Capuyan, SGC recently stated that it “has no more financial capacity to continue the project.”
He made the remarks during a council inquiry into the impact of the P110.067-million tennis court project on ongoing investigations linking multiple Discaya-owned construction firms to public works corruption and the cancellation of their builder licenses.
Once the contract is terminated, the city government will either bid out the remaining work or undertake repairs itself. Capuyan said the CBAO had initially negotiated with SGC to continue the project, which could have avoided rebidding, but progress has been hampered by bad weather and the Discayas’ legal troubles.
The city has paid most of the contract price, with only about P26 million being withheld for unfinished job and other repair work.
The city may use the remaining balance of the original contract and the performance bond to complete the work, city officials said.
The project involves renovating and upgrading the original 1970s-era tennis court and constructing a basement parking lot capable of accommodating up to 78 vehicles at Burnham Park’s Athletic Bowl. While the work is nearly finished, SGC has accumulated penalties for delays in the final stages, Capuyan said.
Design flaw
The termination notice was first issued in December last year and formally received by SGC in January.
In the following months, the company focused on correcting a design flaw that caused rainwater to flood parts of the structure. Multiple city sources claimed the error originated with government architects, and that “the contractor simply followed the work plan.”
SGC rebuilt and waterproofed a parking lot wall to prevent leaks affecting bathroom stalls and the pavement. It also retrofitted the tennis court flooring to channel rainwater to drains and coated the court with acrylic silica sand.
“We used to spend hours cleaning up pools of water that collected there,” said a city employee managing the facility in an Oct. 21 interview.
Audit observation
While still unfinished, tennis enthusiasts are allowed to play for free at three completed courts on the second level of the new complex. A pickleball court has also been installed one floor above the main courts. The first level is designed to accommodate retail space and a small restaurant.
The council inquiry on Monday was cut short for the second time due to a recent audit observation memorandum (AOM) issued by the Commission on Audit (COA) in Baguio. The AOM questioned “the authenticity and validity of the single largest completed contract (SLCC) submitted by the winning bidder, as well as the adequacy of the bids and awards committee’s postqualification procedures in verifying compliance with Republic Act No. 9184 (the government procurement law).”
The SLCC is required to show that a bidder has completed similar projects. According to the AOM, SGC submitted the SLCC of another Discaya firm, Pasig-based Alpha & Omega General Contractor and Development Corp., raising suspicions of “ineligible subcontractor arrangements” during the 2022 bidding process.
The AOM said the contract may have been awarded to a bidder whose technical expertise was not properly validated, potentially undermining the integrity, transparency, and competitiveness of the procurement process. The document was transmitted on Oct. 10 but has not been made public.
The city government has responded to the AOM and is awaiting the COA’s decision.
Before resigning from the ICI as adviser in late September, Mayor Benjamin Magalong directed the City Public Information Office to release a fact sheet on the tennis court project, emphasizing that no anomalies occurred during the bid, which involved nine other contractors, and that all procedures were properly followed.
At Monday’s council session, Capuyan assured the new tennis and pickleball courts “are usable” and capable of accommodating up to 100 players daily.
The city has not yet released official operational guidelines or fees for the courts, so residents continue to play for free.
