The Comptroller and Auditor General (CAG) which is probing the accounts of the scam tainted Commonwealth Games Organizing Committee (OC) has in its preliminary investigation found that a top official of the CWG Federation had influenced in awarding of contract to a foreign consortium at an exorbitant rate. This had resulted in a loss of Rs 29 crore to the exchequer.
Not only was the selection of the consultant “doubtful” the CAG has observed that the entire contract value of Rs 29 crore was “unreasonable.”
The CAG has come across evidence of “visible patronage” of Mike Hooper, chief executive officer, Commonwealth Games Federation in influencing the contract given to the consortium of Events Knowledge Services (EKS) and Ernst & Young Private Limited. The said consortium was awarded the contract of Games Planning and Project Management. According to CAG, Hooper intervened in OC’s attempt to reduce the contract value by Rs 11.66 crore. Because of Hooper’s interference OC failed to reduce the final contract value resulting in avoidable expenditure of Rs 11.66 crore.
Irregularities in the selection of consortium
· Games Planning and Project Management consultancy given to a consortium which did not had any prior experience of handling Asian Games, Commonwealth Games or Olympics.
· Mike Hooper, chief executive officer, Commonwealth Games Federation influenced OC to increase the contract value by Rs 11.06 crore.
Routing payment to a firm with which OC had not signed any contract
· At the behest of the selected consortium, OC routed payments amounting to Rs 4.9 crore to a firm with which it had not signed any contract.
This is not all. CAG found unusual instance of OC transferring payments to a based company with which it had not signed any contract. According to the audit agency, soon after the OC signed the contract, one of the consortium member – EKS -- incorporated a new company in called Events Knowledge Services Private Limited and request OC to route payments through the firm. The OC forwarded payments worth Rs 4.9 crore to a company with which it had not signed any contract. The CAG has noted that the “unusual practice of forwarding payments to a company other than the contracted one raises further doubts about the transparency of the contract.”
The audit agency has also found irregularities in selecting the consortium. According to the original Expression of Interest published by the OC, one of the prequalification criteria for selecting consultants was the experience of Asian Games/ Commonwealth Games or Olympics. But the consortium that was finally selected did not have any prior experience of handling CWG, Asian Games or Olympics. The CAG found that the OC tweaked the prequalification criteria to intentionally facilitate EKS and its partner to bag the contract.
The audit team found that OC did not carry out any proper tendering for the said contract. Despite many reminders OC failed to produce tender documents of the said contract to the audit team. CAG notes that not only the selection of the said firm appears dubious and the contract value excessive, there was also conflict of interest in the way in was awarded.
Further, the Comptroller and Auditor General (CAG), in its ongoing investigation of OC’s account have come across another example of the games organization’s brazen loot of the exchequer. CAG found evidence of how the OC top bosses not only signed contract with the same foreign firm twice at an exorbitant price but also, for some inexplicable reason, allowed the firm’s staffers to draw their salaries for the better part of the ten month contract without even coming to Delhi. This fraudulent payment on the part of the OC resulted in loss of Rs 5.7 crore to the Indian government.
The auditors during their probe found that OC hired Greg Bowman as consultant for handling the sports presentation programme for CWG (the format in which medals are to be presented to winners and how it should be showcased to the spectators and broadcast audiences) in October 2009 at a cost of Rs 80.23 lakh. OC entered into a second contract with a company M/S Great Big Event Private Limited (GBE) for Rs 2.3 crore on January 2010 to assist Bowman.
One of the irregularities that CAG came across was the conflict of interest in the award of contract. Bowman was also the managing and creative director of the firm GBE Private Limited.
CAG found that the OC on September 2010, after working with the firm for seven months, entered into another agreement with it at an exorbitant fee of Rs 3.88 crore without terminating the earlier contract. This was over and above the Rs 1.47 crore that the OC paid to the firm for the seven month period before termination of contract.
Also, as per the agreement GBE was to provide nine personnel to come to for the entire term of the contract (ten months) to assist Bowman. CAG revealed that one member of the firm, Kim Campbell did not come to for seven months but was allowed by OC to draw her salary amounting to Rs 3.42 lakh for this period. Some other staff were also allowed to draw salary despite their absence resulting in fraudulent payment to the tune of Rs 40.7 lakh as salaries.