Projects faulty,money wasted,favouritism rampant: CAG

The government auditor also faulted the government for not setting up a “single point of authority and accountability” and said there was “lack of clear governance structure,a multiplicity of coordination committees were created,disbanded and reconstituted at different points of time”.

Referring to the controversial appointment of Kalmadi,the CAG said,“The (CWG) bid document of May 2003 envisaged the OC as a ‘government-owned registered society’ with the Chairman of OC Executive Board (EB) being a government appointee,and the IOA President being only the EB Vice Chairman.”

However,“the OC was ultimately set up in February 2005 as a ‘non-government registered society’ with IOA President Suresh Kalmadi as the Chairman of the OC EB,” it pointed out.

The CAG said “despite serious objections” from then Sports Minister late Sunil Dutt,Kalmadi was “appointed as the OC Chairman,based on a PMO recommendation of December 2004”.

“This decision facilitated conversion of the originally envisaged government-owned OC into a body outside governmental control without commensurate accountability to government and concomitant controls to ensure propriety and transparency (despite full financial guarantee and funding from government).”

The auditor said attempts in 2007 by then Sports Minister Mani Shankar Aiyar and then Sports Secretary S K Arora with the PMO,the Group of Ministers and the Cabinet Secretariat,“highlighting the ineffective position of the Sports Ministry in exercising control over the OC,met with strong resistance from the Chairman OC,and were hence rendered unfruitful”.

The CAG found serious irregularities in award of contract for construction of the CWG residential complex to Emaar MGF.

It also says the streetscaping project carried out by Delhi government was ill-conceived,ill-planned; and caused wasteful expenditure of Rs 101 crore.

It pointed out the commitment of the central government in conjunction with the Delhi government in September 2003 to become parties to the Host City Contract (HCC) was “critical to the success of the IOA bid for Delhi” to host the Games.

“…thus,the Games became the property of the nation,rather than merely that of the IOA. This was,however,inadequately reflected in the subsequent construction of the

Organising Committee,” the CAG observed.

“In our opinion,the unique challenge of managing and monitoring the activities of multiple agencies for delivering the Games project should have been met by entrusting its stewardship to a single point of authority and accountability,with adequate mandate to ensure all deliverables in time,to cost and to specified quality standards.”

The CAG also noted that “in view of the government guarantee for meeting the cost of the Games,it was essential for such stewardship to be fully under government control. However,this model of management or financial control was not followed for the Games projects.”

The auditor said the change from ‘government-owned registered society’ to ‘non-government registered society’ with Kalmadi as Chairman of OC EB was “orchestrated through a sequence of events,commencing with a document titled as an

‘updated bid’ of December 2003 (which had no legal sanctity or relevance),indicating a changed structure.”

This ‘updated bid’,“surfaced only in September 2004,viz. 16 months after the IOA made its bid and 10 months after that bid had already been declared successful,” it said.

“In our opinion,the decision of the PMO for appointing Suresh 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 CAG said.

Detailing sequence of events,the CAG said Dutt had written to the Prime Minister on November 14,2004 expressing “surprise” at the resolution passed by the IOA appointing its President as Chairman of the OC.

“This was at variance with the decisions taken in the GoM meeting (of October 25,2004). He also stated the minutes of the GoM meeting,as issued by the Cabinet Secretariat and received in his office on November 10,2004,did not reflect the decisions taken in the meeting regarding various aspects of the Composition of the OC,” it said.

To a question,Deputy Comptroller and General Rekha Gupta said the auditor had not worked out accumulated losses or wasteful expenditure but said further audit will continue.

“Interestingly,we found substantial differences between the draft minutes of the GoM meeting prepared by the Minister of Youth and Sports and those finalised by the Cabinet Secretariat and forwarded to the PM,” the CAG said.

On December 6,2004,“a communication from the PMO stated that institutional arrangements had been evolved for the conduct of the CWG-2010,” the report said,adding that in this,Kalmadi was “indicated as the Chairman of the Organising Committee and the Executive Board”.

It also “communicated the Prime Minister’s direction that these institutional arrangements be considered in the next GoM meeting”,the CAG said.

The second GoM on January 14,2005 did not take a view regarding the governance structure but the third GoM on January 29,2005 “endorsed the views of the PMO and decided that the OC would be headed by Kalmadi”,it said.

The auditor noted that an “unwieldy 400-plus” general body of the OC was constituted “which was not envisaged in the bid document or the Host City Contract” and did not result in any significant benefit or value addition to the Games.

“The OC… functioned,in effect,as a parallel,non-governmental organisation,without commensurate accountability to government and concomitant controls to

ensure propriety and transparency (despite full financial guarantee and funding from government),” it said.

The CAG also roped in Delhi Chief Minister Sheila Dikshit,saying with her “active involvement” luminaries (street lights) were imported at “far higher cost” than the

domestic ones,leading to “avoidable extra expenditure of Rs 31.07 crore”.

The CAG said “no technical note” regarding reasons for use of imported luminaries along with cost-benefit analysis was found on record.

“Models of various companies of vastly different repute and of different price range were selected at the same level,without any record of techno-economic evaluation of options offered by different bidders,” it said.

“We also found that the procurement price of imported luminaries was far higher than the fair price computed on the basis of actual invoice price,” the auditor noted.

With regard to streetscaping and beautification of roads around CWG venues,it said a “wasteful expenditure” of Rs 101.02 crore was caused by the “ad hoc and arbitrary manner” of awarding contracts at an “exorbitant” average cost of Rs 4.8 crore per km.

“The project was consultant-driven,with the selection of consultants being arbitrary and non-transparent and without any common design guidelines and targeted budgetary estimates,” it said.

The CAG also termed as “ill-conceived” Delhi government’s decision to award a seven-year contract for Rs 99.81 crore to TETRA network,a professional mobile communication service essentially meant for emergency services.

With regard to broadcasting aspect of the CWG,the report said Prasar Bharti and government suffered “substantial loss” after contract was given for Rs 246 crore to SIS Live that gave a Rs 177.30 crore sub-contract to Zoom Communications,“which would have been ineligible for bidding”.

The awarding of work in NDMC after calling of design-based tenders resulted in an extra expenditure of Rs 6.66 crore as work was awarded to the bidder with higher unit rates for various items,the report said.

NDMC also awarded additional work of 18,445 km,incorrectly terming it as deviations to the original contract,the CAG said,adding. “We believe that this may lead to an estimated additional loss of Rs 6.13 crore.”

The CAG also faulted the planning of the CWG,saying there was a seven-year window which was “not appropriately utilised” and led to “cascading delays” in subsequent activities.