The government’s top legal officer has told the government that it should not have released Rs 230 crore to the four foreign private firms, for whom top diplomats had sought clearance of all dues.
The Commonwealth Games organizing committee had released Rs 230 crore to these firms even before the government could have started investigations against them.
Solicitor General Gopal Subramanium, who has questioned the way contracts were awarded to the four firms, termed the payment of around Rs 230 crore as "wrong and a loss to the national exchequer."
The Solicitor General also expressed surprise at the method adopted to award contracts to these companies and has questioned the basis on which the payments have been released to them so far.
Once their role in the CWG scam became apparent, the Sports ministry decided to withhold the remaining Rs 420 crore and issued a direction to the organizing committee.
In the meantime, diplomats of the countries, where these companies are based, wrote to the Central government for immediate release of the funds stating that the contracts were fair and as per international norms.
The ministry sought an opinion from the law ministry on whether pending payments can be released or not.
The law ministry told the sports ministry last week not to release the pending payment of around Rs 420 crore to the four private firms which had bagged the lucrative contracts for overlays projects during the Commonwealth Games held in the Delhi last October.
Subramanium also said that the money should not be released till the investigating agencies give a clearance. The ministry has sent the file back to the sports ministry after
endorsing the Solicitor General's opinion.
The overlays worth Rs 650 crore included supply of tents, marquees, prefabricated units, portable toilets, containers, security fences, furniture, public display LED boards, floor finishes, material handling equipment, gensets, cabling, UPS, air-conditioners, lighting, civil construction, athletic exercise equipment and grandstands.
“Since the allegations of favouritism in the award of contracts are too serious to be ignored and exorbitant prices appear to have been quoted by these companies, therefore the question of release of money does not arise,” Subramanium said in his opinion.
The Solicitor General has also drawn the ministry's attention to the ongoing CBI probe into the matter and has supported the investigative agency's stand that no financial movement should take place at this juncture.