More than 70 per cent of the production work related to Commonwealth Games 2010 was outsourced in violation of the contract, a claim which national broadcaster Prasar Bharati failed to counter.
"I don't know anything about sub-contracting," Prasar Bharati chief executive officer BS Lalli said on Monday at a press briefing called to claim that there was no violation in the Games broadcast deal with UK based SIS Live.
Government sources, however, said that works amounting to R177 crore of the total contract with SIS Live of R246 crore was outsourced to Zoom Communication, an Indian company.
The contract was for producing the programme on high definition, for which Doordarshan did not have technical expertise.
This was not allowed in the contract signed by Prasar Bharati with SIS Live but still it was allowed, sources said. It meant bigger profit for the SIS Live that envisaged when the contract was signed cost of production was reduced.
In what appears clear violation of laid down procedure, the Prasar Bharati Corporation introduced new clauses — to terminate the agreement and liquidation damages — after the information and broadcasting ministry approved the request for qualification. The clauses were introduced without ministry's approval.
Introduction of the termination clause allowed SIS Live to threaten a walkout just before the Games as there was delay in handing over the venues to the company for installing broadcast equipment, forcing Prasar Bharati to agree to their demand to pay more money before the start of the games.
Instead of 40 per cent that was to be paid before the start of the games, Prasar Bharati paid 60 per cent. The remaining 40 per cent is yet to be paid and there is a 10 per cent performance guarantee that has been furnished by SIS Live.
Lalli rejected the allegations and said whatever payment has been made till date is according to schedule which has been approved at the highest level.
"The selection of the entity was made with the approval of the competent authority — the minister for information and broadcasting,” Lalli said at a joint press conference with Doordarshan director general Aruna Sharma.
Sources said that on many issues ministry was not informed.
Clarifying on the alleged service tax and income tax evasion by SIS Live, Lalli said due payment of service tax is the legal responsibility of the entity and not of Prasar Bharti.
The income tax department has written to Prasar Bharati asking to cut R29 crore as tax from the final payment to SIS Live. "Whatever the I-T department has directed would be carried out in letter and spirit," he said.
On reports that Prasar Bharati defied finance wing while finalising the contract, Lalli said it was not true as the finance wing was only supposed to make suggestions and give advice, which was not binding