Irregularities and lack of foresight on the part of agencies headed by CM,L-G and OC chief are highlights of report Govt had little control over OC The CAG report has slammed the government for allowing Organising Committee to evolve from a government-owned body into an organisation effectively outside governmental control. Yet,it was being funded by the government as it could only earn negligible revenue. Games will be revenue neutral,a myth The CAG report claims that former OC chairman,Suresh Kalmadi,falsely projecting that the Commonwealth Games will be revenue neutral. In reality,the total committed revenues accounted to just Rs 682.06 crore and the net revenue actually realised by the OC was just Rs 173.96 crore. The OC could generate only Rs 375.16 crore as sponsorship revenue,out of which nearly 67 per cent was from government agencies or PSUs. No revenue has been received on account of merchandising and licensing rights. The OC managed to earn only Rs 39.17 crore as against the target of Rs 100 crore from tickets. Suresh Kalmadi as OC chief As per the May 2003 bid document,the President of Indian Olympic Association would only be the Vice-Chairman. But an updated bid document was prepared by the Indian Olympic Association. Former Sports Minister Sunil Dutt had raised a red flag over the issue on November 11,2004. He shot off a letter to the Prime Minister saying the significant changes with major structural and financial implications have been made in the Organising Committee without consultation or approval of the Ministry. The CAG has noted that they found substantial difference between the draft minutes of the Group of Minister meeting prepared by Sports ministry and those finalised by Cabinet Secretariat. By February 10,2005,the OC was registered as a society and Suresh Kalmadi was named as chairman. In our opinion,the decision of the PMO for appointing Kalmadi as the chairman of the OC facilitated the conversion of the originally envisaged government-owned OC into a body effectively outside governmental control, the report states. Irregularities in tendering of contracts With the status of a society,the Organising Committee had full freedom to set its own rules. The CAG has noted that the OC fully utilised this freedom. At least 107 contracts for Rs 310.68 crore were awarded on nomination basis without tendering. This included the much-debated Aerostat. The Italian firm K-events was hired by the OC merely on the basis of nomination from Wizcraft. Twenty-eight contracts for Rs 356.14 crore were awarded on the basis of single tenders. In many cases,by disqualifying all vendors,except one,on questionable grounds during evaluation. This example included contract for Village catering,TSR (Timing,Scoring and Results) and GMS (Games Management System). According to the CAG,14 contracts worth Rs 1,253 crore were awarded to vendors not fulfilling the eligibility criteria stipulated in their own tender document. These included contracts for overlays,waste management and image and look. Sports Marketing and Management for sponsorship Smam,an Australia-based firm,which also had branch in Singapore was to be responsible for garnering sponsorship for the OC. The CAG has noted that the contract to SMAM was essentially on single financial bid. More importantly,the audit body says,the decision was unduly influenced by the recommendations of Commonwealth Games Federation CEO Mike Hooper. The contractual provisions with SMAM were deficient and unduly favoured it. The contract was terminated by August 2010. There were no penal clauses in the contract against SMAM. High rates of props for ceremonies The OC had engaged Omung Kumar of Blue Lotus Productions as Art Director for Opening and Closing ceremonies and manufacturing the props. The proposal for appointment of Kumar was initiated on recommendation of Wizcraft. The props included vehicles of different categories,ownership for which was not transferred in OCs name. Further,props worth Rs 3 crore remained unused. Props worth Rs 2.38 crore were not received at all.
