06 August 2011

Pin It

Read Complete CAG Report on XIX Common wealth Games 2010 Part Five

Read Complete CAG Report on XIX Common wealth Games 2010 Part Five

Prefabricated Structures at JLN StadiumOC paid rental - @Rs.4,250 per sqft
(Vendor-Pico Deepali Consortium)
CPWD paid rental -@1,645 per sqft
(Vendor – Deepali Designs & Exhibits )
Such excessive rental rate of pre-fabricated items was found in other clusters also. The excess expenditure on this account was to the tune of Rs.13.39 crore

OC hired 3120 water dispensers under overlays contracts, with rates ranging between Rs. 1,776 and Rs. 32,986 per unit. Excess expenditure (based on the lowest cost) worked out to Rs.3.82 crore.
This item was infructuous, since Coca Cola was required to provide adequate mineral water to all the venues during the entire period of the Games, under the sponsorship agreement. Further, Delhi Jal Board (DJB) also made arrangements for provision of drinking water at venues by setting up its own water kiosks for dispensing water, for
which an amount of Rs 0.26 crore was payable to the kiosk contractor.

In response to adverse media publicity, OC published a full page advertisement in
several national newspapers at a cost of Rs. 0.34 crore on 10-11 November 2010.
Among other aspects, the advertisement attempted to justify the prices of tissue rolls
as “per box of 100 rolls” and not per roll.
CAG found that the information in the advertisement was misleading.

Increased Scope of Work due to visit of President - In October 2009, DG-OC and
Chairman OC approved an additional payment of £ 10350 (Rs. 7.76 lakh) to JMW proposed by Shri Sanjay Mahindroo, DDG, purportedly due to increased scope of work on account of the visit of the President of India. In fact, this visit was known to the OC in May 2009 itself, well before the award of the contract to JMW.

Further, during execution of the work, OC hired certain extra items from JMW,
for which £ 2370 (Rs. 1.78 lakh) was purportedly paid in cash by Shri Mahindroo to JMW.

Trafalgar Square Function - OC scheduled a function at Trafalgar Square, London, which was later cancelled and JMW intimated about this cancellation. Subsequently, JMW raised a bill of £ 31000 (Rs. 23.25 lakh) for this event, claiming that they had already incurred these expenses. Curiously, this issue was dealt with directly by the Chairman
and SG. The instruction to work on this function was given from the Chairman's Secretariat, and the SG agreed to pay half this amount; ultimately £ 17811 (Rs. 13.36 lakh) was paid to JMW.

Extra expenditure of Rs. 14 lakh on account of travel booking of extra members (including Smt. Meera 56Kalmadi and Smt. Ranjan Mukherjee ) and relatives of baton bearers, who were not in the approved list
OC confirmed that the ticket in the name of Smt. Meera Kalmadi was booked by OC

Excess payments totalling £ 2084 (Rs. 1.56 lakh) on account of double
charging for two rooms, and a superior room beyond entitlement

One of the bidders (3 Dots Vision Ltd.) was not registered with the UK Registrar
of Companies; we also verified that the agency did not exist at its stated address

The credentials of AM Films UK Ltd. appear suspect, since the company
registration and VAT registration numbers indicated in its advance invoice
were false

The committee, consisting of Shri Jeychandran, JDG (F&A), Shri Mahindroo, DDG (TM) and Shri Sudhir Verma, DDG (Communications) which evaluated the quotes and selected AM Films UK Ltd at a total cost of £ 146,869 (Rs. 1.10 crore) and ecommended 100 per cent payment in advance, was different from the originally formed committee. The minutes of the committee meeting purportedly held at London on 23-24 October 2009 were signed by Shri Jeychandran, who was actually in Delhi on these dates and
processed the payment to AM Films Ltd.

AM Films Ltd. submitted an advance invoice for £ 146869 (Rs. 1.10 crore) on
23 October 2009. Approval was obtained by Shri Mahindroo from the Chairman and communicated to Shri Jeychandran by e-mail / fax and processed, the OC CA's certification of payment of foreign currency obtained, and funds transferred to AM Films Ltd – all on 24 October 2009 with undue haste by the OC

Even before the agency submitted three invoices for £ 100,625 (Rs. 75.47 lakh)
on 21st October 2009, the payments were processed and DG and Chairman's approval was obtained on 20 October 2009 itself; the payment was transferredto the account of AM Films UK Ltd. (and not AM Cars and Van Hire Ltd.) on 22 October 2009 . This payment included £ 49,803 (Rs. 37.35 lakh) for power generation purportedly required by SIS Live , but no correspondence with SIS-Live was documented.

A subsequent payment of £ 36,612 (Rs. 27.46 lakh) was made on 26 October 2009, on a proposal by Shri Mahindroo which was processed for payment by Shri Jeychandran after a “talk with the Chairman”.

Payment of £ 1275(Rs. 0.96 lakh) was also purportedly made in cash by Shri Mahindroo to AM Films for unrelated postage/ stationery services, which appears unusual.

A cash payment of £ 100,856 (Rs.75.64 lakh) was made by Shri Mahindroo,
purportedly for various services and works. There seems to be no reason for such large cash payments, except to avoid a transaction trail.

Shri Jeychandran and Shri Mahindroo drew advances of £ 65,000
(Rs. 48.75 lakh) each from the OC. Although they had submitted their adjustment bills in
December 2009 and February 2010 respectively, these had not yet been settled
Shri Bharat Bala Ganapathy was engaged in February 2009 as the Creative
Director on the recommendation of a panel of experts (including Shri Bharat
Bala himself) constituted by the GoM. From November 2009, he was appointed as “Creative Consultant”

Shri Bharat Bala also unilaterally determined his own remuneration:
He was paid a total of Rs. 3.09 crore till October 2010 (including an advance
payment of Rs. 0.25 crore).

OC favoured Spectak Productions by agreeing to take on the service tax
liability of Rs. 1.06 crore (when the RFP clearly indicated that the consultant was
to indicate costs inclusive of all taxes).

12 out of 17 contracts did not specify the liability for service tax; OC finally
bore the liability for service tax of Rs. 0.52 crore. In the case of Mr. Mark
Fisher, OC failed to deduct service tax of Rs. 1.23 lakh.

We are not clear about Shri Bharat Bala's role in Phase-II as Creative Consultant –
“advice and work for overall development of concept and theme”, when the creative
concepts had already been presented and an event management firm (Wizcraft)
appointed to deliver the ceremonies.

In our view, the event agency charges of Rs. 16.09 crore to Wizcraft were not
justified. OC's response that Wizcraft was providing BOQs, drawing up scope
of work, and sourcing vendors/ artists etc. is not tenable, since these
activities were undertaken by Shri Bharat Bala, Spectak Productions and
the other 17 consultants engaged by the OC.

OC appointed 17 other consultants for various ceremony-related activities for the
period February to December 2010; Rs. 6.12 crore had been paid till February 2011 to
these consultants. 16 out of these consultants were appointed on nomination
basis (largely on the advice of Mr. Ric Birch and Event Management Firm), with one
consultant appointed through limited tender.

We also found overpayments of Rs. 0.43 crore to Mr. Shepperd and Mr. Marenghi, as
well as an unexplained reduction in the scope of work of Mr. Andrew Garrod on 4
October 2010.

Theme Song –
Shri AR Rehman was engaged for composing and performing the theme song for the
Opening Ceremony. The theme song was launched on 28 August 2010 and the video
shoot completed only on 11 September 2010, as against the contractual date of 15
August 2010 for release at a press conference. This delay resulted in lack of adequate exposure and publicity for the theme song. No action could be taken for the delay, due to absence of penal provisions in the contract.

OC engaged Shri Ranjit Barot as music composer and director for a turnkey
solution for the opening and closing ceremonies at a total cost of Rs. 1.75 crore
plus taxes. Contrary to the Fast Track Committee's direction, OC did not obtain
the cost break-up for each sequence, nor did it constitute a negotiation committee.
Further, we noticed overpayment of Rs. 0.18 crore to Shri Barot; OC also incurred
expenditure of Rs. 0.73 crore for royalty and license fees for music (which should have
been borne by Shri Barot).

With the approval of GOM, OC engaged Mark Fisher Studio, London in October
2009 at a fee of USD 514,000 excluding taxes (Rs. 2.31 crore) for providing
architectural designs and drawings for a centre stage pavilion (band stand) in
the JLN Stadium for the opening ceremony.
Subsequently, Mr. Mark Fisher managed to get n his scope of work revised to cover
only “preliminary” designs and drawings”, rather than complete designs and drawings, and n revised terms for 100 per cent payment in advance.
When the GoM decided in December 2009 to dispense with the bandstand,
full payment had already been made;

We also found other instances of undue favour by the OC to PRG:
Irregular payment of € 225,000 (Rs. 1.37 crore) to PRG on account of damage to
equipment, although risk insurance for such eventualities was contractually
PRG's liability

Provision of 136 air flights free of cost, instead of 60 (as contractually stipulated).

Appointment of Shri Omung Kumar (Blue Lotus Productions)
as supplier of props for ceremonies
All these works were awarded without an approved list of props required.
The props included vehicles of different categories, ownership for which was not
transferred in OC's name. Further, props worth Rs. 3.09 crore for the closing ceremony
and Rs. 0.36 crore for the opening ceremony remained unutilized. In addition, props
worth Rs. 2.38 crore were not received at all.
We also noticed that the props procured from Blue Lotus Productions were exorbitantly
priced, as is illustrated below:
Podium (Rs.50000/- per piece)
Polo Circles (not used) - just a ply piececovered with cloth (Rs.13425/- per piece)
Ashok Chakra painted on cloth (4 metres diameter) (Rs. 150000/-)
Placard for each CGA (Rs.3521/- per piece)
Sugarcane Truck (Rs.10 lakh)
Chinese fan (Rs. 11,000 per piece)
Mobile flag holder - Used to hold the flags for all CGAs (Rs.2254/- per piece)
Garland with stand used as a show piece (Rs. 46833/- per piece)
Bangles for Namaste (Rs.22,950- per piece)
Chagada – Gujarati style (Rs. 2.5lakh)
Tiffin trays for dabbawalas (Rs.8,141/- per piece)
Milk Churn with Bicycle (Rs. 8,000 per set)
Small truck (Tata 407-1996 model) Rs.4.47 lakh
Car (Ambassador-2001 Model) Rs.3.45 lakh

Ground Protection and restoration FOP –
Rs. 2.02 crore as well as 16 rolls of ground cloth worth Rs. 0.20 crore, unutilised).
Rs. 7.26 crore for rolling out grass turf replacement for the Field of Play in the
stadium (where grass had initially been laid by CPWD at a cost of Rs. 0.40 crore).

The ground cloth contracts for the opening and closing ceremonies were
awarded on the basis of single responses to GeoFabrics, UK and Lalit Art Studio at costs of US$ 387,695
Lalit Art Studio supplied ground cloth of the wrong colour (white against
black and sand colour), but OC accepted the cloth.

The process of award of catering contracts for the Games Village took an unduly long 14 months from June 2009 to July 2010 (just 3 months before the Games) with delays at every stage

We found huge quantities of sports equipment lying unused at various locations
even after the Games had concluded
Out of 17 venues, equipment usage records of only 7 venues were received.
In these venues, sports equipment worth Rs 0.93 crore was lying fully unused
Sports equipment worth Rs 1.35 crore was lying unpacked in the ITPO store as of
November 2010

2 trampoline sets procured for gymnastics at a cost of Rs 0.11 crore were procured wastefully, as there was no trampoline event scheduled in the Games. These were lying packed in the IG Stadium store throughout the Games.

16 storage trolleys, which were neither in the list approved by MYAS nor
requested by the Sporting Federation, were procured at a cost of Rs. 0.25 crore
as part of aquatic equipment, but were never made available at the Dr. SPM
Aquatics Complex, the aquatics venue. Eight of these trolleys were kept at the
Games Village and the rest remained in the store.

Suggested Reading –
Read Complete CAG Report on XIX Common wealth Games 2010 Part One

Read Complete CAG Report on XIX Common wealth Games 2010 Part Two

Read Complete CAG Report on XIX Common wealth Games 2010 Part 3


Read Complete CAG Report on XIX Common wealth Games 2010 Part 4

Reality views by sm –
Saturday, August 06, 2011

Tags – CAG Report On Common Wealth Games 2010 Corruption Report CAG


Paritosh August 08, 2011  

can u pl give a bullet pointed consise mail to me on this?(and will u be interested to join my team of Nation wide research associates) Paritosh Vyas
National Co convener
BJP Communication cell