Why did govt keep mum on flawed contract with Oz firm? | delhi | Hindustan Times
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Why did govt keep mum on flawed contract with Oz firm?

The Commonwealth Games Organizing Committee (OC) might have tried to restore some of its credibility on Thursday by terminating its contract with the Singapore based Sports Marketing and Management (SMAM), the firm responsible for negotiating and procuring sponsorship contract for the games.

delhi Updated: Aug 06, 2010 00:41 IST
Moushumi Das Gupta

The Commonwealth Games Organizing Committee (OC) might have tried to restore some of its credibility on Thursday by terminating its contract with the Singapore based Sports Marketing and Management (SMAM), the firm responsible for negotiating and procuring sponsorship contract for the games.

But there is a feeling among many within the government that the action is too little too late. OC had signed the contract with SMAM way back in 2007 knowing fully well that the agreement signed heavily favoured the firm.

“Why did nobody object to the flawed agreement back then,” said an official involved in Games preparations.

Sources said that OC had called for tenders for engaging consultants for procuring sponsorships in 2006. After SMAM was finalized as the bidder, the OC Executive Board had appointed a four member committee headed by the then Delhi government secretary OP Kelkar to examine the terms and condition of the agreement.

“The committee had met thrice to discuss the contract agreement and found it to be perfect. It then recommended the contract proposal to the executive board,” said a source.

In mid 2007, the Kelkar committee put the contract proposal before the 15 member Executive Board headed by OC chairman Suresh Kalmadi, which went through the proposal and approved it.

“How come so many top notch officials and bureaucrats failed to notice that the contract had clauses for commission that was very high?” asked a source. “The contract had clauses according to which SMAM would be given commission for sponsorships coming from PSUs as well. Why?”

It was the flawed contract agreement that the OC signed with SMAM that has ensured that despite the latter failing to deliver, it will get upto 22 percent commission from sponsorship it did not procure.