Games exposed

The Shunglu Committee reports on the CWG scam indict many agencies of the government for procedural violations.

THE ghosts of Commonwealth Games 2010 came back to haunt the Union government when the high-level committee (HLC) headed by V.K. Shunglu, instituted to probe the allegations of corruption in the Games in October last year, indicted many top government officials, including Delhi Chief Minister Sheila Dikshit, Lieutenant Governor of Delhi Tejendra Khanna and Solicitor General Gopal Subramaniam, apart from many officials of the Organising Committee.

Shunglu, a former Comptroller and Auditor General of India, was assisted in the committee by Shantanu Consul, a retired member in the Personnel Department. It prepared three detailed reports showing procedural flaws in organising the Games.

This has come as another embarrassment for the United Progressive Alliance (UPA) government at the Centre, which is already under attack for the corruption and irregularities in the 2G spectrum allocation.

First report

In the first report on irregularities in awarding broadcasting rights for the mega event, submitted on January 31, the panel recommended strict action against the then Chief Executive Officer of Prasar Bharati, B.S. Lalli, and former Director General (Doordarshan), Aruna Sharma. Lalli has since been suspended and Sharma sent back to her parent cadre.

The report said: Contracts were awarded by Prasar Bharati for various Host Broadcast activities without ensuring reasonableness of rates, overruling suggestions received. Prasar Bharati received and supported highly inflated bids. Most of the decisions to support and award the inflated bids were taken by Director General (Doordarshan) and the then Chief Executive Officer despite strong contrary views. The procedures and best practices in the selection of service providers were ignored or bypassed to favour certain entities. Superfluous legal advice was obtained on matters requiring management decisions and this can only be viewed as an attempt to foreclose the option of decisions based on sound financial and management principles.

Apart from this, the report said there had been deliberate delays in scheduling and that finally led to an emergency situation justifying spending above what was required. The report pointed to a nexus between the state-run Prasar Bharati and the private broadcasters SIS Live, a U.K.-based broadcasting firm that won broadcasting rights, and Zoom Communications, to which a major portion of the broadcasting was subcontracted. It also said that Prasar Bharati had promised to cover 10 of the 17 events itself and that only seven events had been proposed to be outsourced. Why most of the events were outsourced at a later stage was beyond recorded reasons, the report said. This, in turn, deprived Doordarshan, the state-run television channel, of substantial revenues.

It also said that Gopal Subramaniam helped make inappropriate changes in the contract between Prasar Bharati and SIS Live at the last moment and this led to the releasing of 60 per cent of the money before the event as against 30 per cent of Rs.246 crore mentioned in the original contract. This led to a loss of at least Rs.135 crore. The report further stated that the legal reference can be viewed as attempts to foreclose the options of financial and management scrutiny on merit of the issues in terms of the contract and instead use the legal advice to cover or justify the management, financial and ethical misdemeanour.

Gopal Subramaniam responded by telling a national daily that he had spent 23 hours on the above only with a view to bringing the parties together in a sensible understanding and that he had no pecuniary or professional interest at all in the matter.

The Information and Broadcasting Ministry, too, has mounted defence on the allegations and said that most of the decisions were taken by an oversight committee to prevent failures during the Games and they were not illegal, as the Shunglu report assumes.

Second report

The second report, which was submitted in the last week of March, says that much of the financial losses in the CWG Village, arguably the most important residential and practice site for the participants, were because of deliberate delays in decision-making, undue favours made to the project developer, Emaar MGF Constructions Pvt. Ltd, by the Delhi Development Authority (the nodal agency for the city's real estate development) and a bailout package' to the project developer for the losses incurred by it.

The report says: According to the Project Development Agreement signed on 14th September, 2007, DDA and Emaar MGF were to share the residential apartments in the ratio of 1:2. This was effectively changed to 1:0.63 with the decision to bail out the Project Developer through purchase of 333 apartments from Emaar MGF's share of the apartments. It should be noted that the Project Developer had asked for [Rs.] 321 crore as loan at normal rate of interest or purchase of 250 apartments. It was DDA's decision to purchase 333 apartments. The bailout package' was premeditated, suggestive of the outcome preceding the process. It further says the Lieutenant Governor of Delhi showed his readiness to bail out the private company, rendering losses to the state-run DDA.

The report says: According to DDA documents, the decision to adopt the PPP mode for developing the Commonwealth Games Village was taken keeping in view constraints of scale, time, quality, specifications and the need for 4,000 rooms during the Games period. Based on their recommendation, government approval for implementation of the project on a Public Private Partnership mode was granted. However, the PPP mode of execution, little understood by DDA, was distorted to such an extent by the Project Developer and DDA that it virtually ceased to be a PPP project. Instead it became a project implemented by DDA and constructed by the developer through a sub-contractor.

The report points out that such procedural problems are suspicious as they finally end up getting financial benefits to one party or the other and, thus, incurring huge losses to the state exchequer.

Third report

The third report of the Shunglu HLC enlists detailed procedural problems and delays in improving the city's infrastructure, a project that was a part of the CWG preparations. The Delhi government, headed by Sheila Dikshit, was complicit in all these procedural corruptions, the report says. The Delhi government, the Municipal Corporation of Delhi (MCD) and the New Delhi Municipal Council (NDMC) were in charge of 25 specific CWG projects relating to road transport, flyovers, foot-overbridges, streetscaping and tourist infrastructure. In all, the HLC identified 52 projects that were under construction before the CWG and involving an amount of Rs.7,156 crore. The HLC report scrutinises 19 of them involving an expenditure of Rs.3,054 crore.

The report says that deliberate delays led to the escalation of costs and benefited many people involved in the projects. It says: The design consultants were given very little time for preparation of design, estimates and bid documentation Barapullah Nala, Salimgarh by-pass. Tenders were invited and, at times, accepted even before AA&ES [administration approval and expenditure sanction] of the project; instead of specific prequalifications for high value projects, a general panel of prequalified contractors were allowed to bid. High value packages were split to enable existing prequalified contractors to bid. Arbitrary additions were made to the list of prequalified contractors. Four contractors captured 60% of PWD work by value, on their terms, to the detriment of economy and efficiency.

It further says: It is likely that the conduct of key members of Works Advisory Board, including its Chairman, was complicit in causing undue gain' to contractors.

In addition, the HLC reports say that the committee received complaints that a large number of candidates who were not qualified were appointed to various posts in the Organising Committee of the Commonwealth Games. It has been represented that several of these candidates are relatives of VIPs or friends of office-bearers of the Organising Committee. It has been stated that some have been given salaries disproportionate to their qualifications and experience, it says.

However, in its 19-page rebuttal, the Delhi government says that the Shunglu report is the product of paranoia and assumes that every policy bespoke of a grand construct of corruption.... It is not just full of contradictions and anomalies but has caused damage to the image of the government and political executives.

It also says the report did not give any opportunity to the Delhi government to rebut its observations, which are mostly speculative and presumptuous. What does one make of a report which begins by stating that even though, city infrastructure was adequate' for hosting the Commonwealth Games 2010 even in 2003, the Delhi government embarked on an ambitious programme to upgrade infrastructure at a considerable cost?' the Delhi government asked. But, even as it criticised the HLC report and asked many questions, it did not reply to the observations of the report.

The Shunglu report says that the delay in the execution of the projects, which were started way back in 2003-04, was caused deliberately to inflate costs in the remaining compressed time. The Delhi government asks: Who are the conspirators? Is it the elected government which faced an election in 2008, considering that election is always an unpredictable phenomenon for any elected government without any certainty of resumption of power? If the re-election of the ruling party was not certain, then was the delay done to benefit another government possibly to the opposition?

Despite the Union government promising stern action against those found guilty, the HLC reports have been criticised as being too speculative. Many observers believe that the roles of the Union Sports Ministry and that of the Organising Committee headed by Suresh Kalmadi were not properly investigated. And there is an opinion that it focussed more on procedural delays resulting in financial losses than on deliberate and large-scale corruption.

Notwithstanding the criticisms, the HLC reports contribute a lot to the understanding of the corrupt practices in the organisation of the CWG in India. Several projects done by the MCD, the NDMC, the DDA, the Public Works Department, the Central Public Works Department, the Ministries of Sports and Urban Development, the Games Organising Committee and the Government of India enterprise RITES, among others, are under the scanner of the enforcement, investigating and vigilance agencies for alleged financial irregularities.

The Central Vigilance Commission is inquiring into over 30 complaints relating to the corruption in the Games-related works. The Central Bureau of Investigation (CBI) has registered four first information reports (FIRs) naming some of the close aides of Kalmadi for alleged criminal conspiracy and financial irregularities in executing the contracts. The CBI has also questioned Kalmadi and Organising Committee Secretary-General Lalit Bhanot, among others, in connection with the cases. Now it remains to be seen how the UPA government acts against those proven guilty, as was promised by Prime Minister Manmohan Singh.