CWG scam: Suresh Kalmadi to be in CBI custody for 8 days

The CBI had yesterday arrested Kalmadi,Lal and Prasad for allegedly awarding illegal contracts to a Swiss firm for Timing-Scoring-Result (TSR) system for the Games causing a loss of Rs 95 crore to the exchequer.

The agency had sought 14 days’ custody of 66-year-old Kalmadi and his associates contending they have to be interrogated to unearth the money trail in the scam.

However,the judge granted eight days to the CBI to question Kalmadi and the two other accused.

The agency had submitted that Kalmadi and his associates were not cooperating with the investigators and have been “evasive” in responding to questions.

“The behaviour of the accused so far has remained evasive and non-cooperative and they are not revealing the true facts and circumstances of the criminal conspiracy leading to the award of Timing-Scoring-Result (TSR) system contract to Swiss Timing in a wrongful manner,” the CBI alleged.

“Kalmadi as Chairman of the Organising Committee of CWG,Prasad as Joint Director General (Sport) and Lal as Deputy Director General (Procurement) during the relevant period were among the main functionaries and key personnel in OC.

“They were deeply involved and instrumental in allotment of the TSR contract to Swiss Timing in a preplanned and premeditated manner at exorbitant rates,thus causing wrongful loss to the government,” the agency claimed.

Kalmadi,a Congress MP from Pune,and the two other officials have been booked under section 120B (conspiracy) read with Section 420 (cheating) IPC and other relevant sections of Prevention of Corruption Act.

Kalmadi’s arrest has come weeks after his close aide and OC Secretary General Lalit Bhanot and Director General V K Verma were taken into custody in the same case.

Kalmadi,who was produced in court earlier in the afternoon,had a humiliating experience as he was being led into the premises.

A man from Madhya Pradesh hurled a slipper at the Pune MP outside the court building but failed to connect. He was identified as one Kapil Thakur and detained by the police.

Kalmadi was arrested on Monday for allegedly awarding the timing,scoring and result (TSR) contract for the Games to a Swiss company at an inflated price of Rs 141 crore in a “pre-planned” manner.

The CBI,which arrested Kalmadi at the end of several rounds of questioning,said the irregular contract had resulted in a loss of Rs 95 crore to the exchequer.

Kalmadi is alleged to have removed papers related to the ‘financial offer’ made by the Swiss firm,Swiss Timing,from the OC’s records. OC officials allegedly could not explain their disappearance.

Shortly after the arrest,Congress general secretary Janardhan Dwivedi announced the Pune MP had been suspended from the membership of the party.

Two other OC officials — Surjit Lal,who was then deputy director-general,procurement,and ASV Prasad,then joint director,sports — were also arrested yesterday for the alleged irregularities in the award of the TSR contract.

Statements of members of the Organising Committee who were part of the four-member evaluation panel constituted for analysing the bids of the TSR contract led to Kalmadi’s arrest. At the meeting,two members had favoured Swiss Timing/Omega,the winning bidder,and the other two had said the other bidder,MSL Software,was also eligible for the contract.

The CBI clinched their case against Kalmadi by recording the statements of the two members — who had said MSL was eligible — under Section 164 of the CrPc. The OC officials said they were “coerced and threatened’’ by the Chairman to favour the Swiss company’s bid. With this evidence under their belt,the CBI decided to go in for the arrest though the agency is yet to piece together the jigsaw of transactions and payments.

The CBI also felt the sudden appearance of two sub-contractors,after the contract was signed,pointed to corruption as outsourcing of contracts or any CWG works was strictly forbidden.

While the CBI has curiously calculated a loss of Rs 95 crore to the exchequer in the deal,OC officials estimate the TSR deal would have cost them an estimated Rs 50 crore had the tenders been floated by 2008,as originally scheduled.

However,once the contract was signed,Swiss Timing/Omega sub-contracted works worth Rs 23 crore to its Indian partner,Gem International,which,in turn,passed on the contractual work to the tune of Rs 13 crore to a Hyderabad-based firm,AKR Constructions.

The CBI now has evidence to show that AKR Constructions executed works to the tune of only a few lakh rupees and OC records show their workers were never allowed to enter CWG venues for security reasons. The CBI is examining if the money paid to the company was kickbacks. The owner of AKR Constructions,A Krishna Reddy,has been absconding for months.

During raids carried out earlier on the two sub-contractors,the CBI stumbled across another piece of incriminating evidence,probably linked to the TSR deal. There is evidence to show that a Rs 71-lakh payment was made by Gem International to Wizcraft,the event management company which handled the Opening and Closing Ceremonies of the 2010 Games.

Officials in the OC and the CBI confirmed this payment to ‘The Indian Express’ and said this too could be part of kickbacks paid for CWG contracts.

The Commonwealth Games Federation officials had announced in 2009 itself that the contract would go to the Swiss firm. Early bid documents and correspondence signed by OC General Secretary Lalit Bhanot,who had been arrested for the same contract,show this. Then began a round of confabulations,that in the view of the CBI,were clearly intended to provide a cover of legitimacy for the pre-selected firm “winning’’ the CWG bid.

Sujit Panigrahi,who was at one time the ADG (Technology) in the OC,had red-flagged the award of the contract to the Swiss firm in 2009. Panigrahi resigned in 2009.

CBI sources said investigations had established that the Expression of Interest (EOI) and Request for Proposal (RFP) in respect of the awarding of the TSR contract were issued in violation of laid down procedures,in order to suit Swiss Timing.

The RFP was changed three days after it was published,in a manner that helped Swiss Timing,as they were the only vendor who could meet the revised criteria. “The change in conditions was never communicated to other vendors by the OC. There is e-mail evidence to suggest that MSL wrote to the OC stating that the tender had been modified,and they were not made aware of the change,” said an official.

CBI has so far registered nine cases in its investigation of alleged CWG scams. Three of these cases are related to restoration work at two of the venues,two cases to the Queen Baton’s Relay,and one each to overlays,and the contracts to Swiss Timing and UK-based broadcast firm SIS Live.