Did Commonwealth Games Organising Committee (OC) overstate its revenue projections? The Comptroller and Auditor General (CAG), the government’s statutory auditor, thinks so.
According to sources, the CAG has raised serious questions over revenue projections presented by the OC.
The OC could fall short of its expected revenues of Rs 1,780 crore by as much as Rs 450 crore.
The CAG, which came out with an evaluation study a report on the preparedness of XIXth Commonwealth Games found major slips on revenue projections the OC had made.
The 70 page report, compiled over three months last year, evaluated the committee’s preparedness in seven key areas, and it reserved a large portion of its alarm for a chapter titled “Financial Management”.
Noting that the OC had nearly doubled its projected revenue, from an initial figure of Rs 900 crore, the CAG team concluded that the “available documentation could not satisfy us of the soundness of the increased estimate”.
According the report, the revenue estimates of the OC more than doubled from Rs 900 crore in August 2007 to Rs 1,780 crore in July 2008 primarily on the basis of increase in Rs 450 crore as sponsorship revenue.
The OC has estimated that it would earn Rs 960 crore as sponsorship revenues, but deals for about Rs 450 crore were yet to be finalised till a few months ago.
“Steps for generating sponsorship and other revenue should be further expedited as the window of opportunity is shrinking fast,” CAG noted in its report that was submitted to the Prime Minister’s Office.
In all likelihood, it now appears, that OC would not end up making a surplus from the games.
The estimated surplus, as presented by OC to CAG, dropped sharply from Rs 205 crore in 2003 to Rs 133 crore in 2007 to no surplus in 2008.
The cost of hosting the games has been pegged at Rs 12,888 crore. Development of venues would cost Rs 5,214 crore, while city infrastructure development would involve an outgo of Rs 4,450 crore.
The operational cost of OC is pegged at Rs 1,628 crore.