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CWG scam: In Suresh Kalmadi’s world, contracts were gifts for friends

Posted by on August 6, 2011 0 Comment

The audit report on the Commonwealth Games has criticised the way in which Organising Committee headed by Suresh Kalmadi handed out contracts for various projects related to the Games.

While the Comptroller and Auditor-General job of unearthing the maze behind these contracts was rendered difficult in the absence of a proper documentation, it found there were numerous instances of single tendering, award on `nomination’ basis, conferment of contracts to ineligible vendors, inconsistent use of restrictive pre-qualification conditions to limit competition to favour particular vendors, inadequate time for bidding, cancellation and re-tendering of contracts, and inexplicable delays in finalisation of these deals.

The organising committee’s structure was such that it was divided into 34 functional areas, with each group tasked with a special category of work. CAG, during the course of its scrutiny, stumbled upon the fact that the job of processing certain sensitive and crucial contracts was entrusted “in an arbitrary and adhoc manner” to certain officials closely associated with Kalmadi.

“Such officials had no role or linkages with the concerned functional area to which these activities pertained,” the report observes in the chapter on `internal controls and decision-making within OC.’

“Such action leads to the inescapable conclusion that this was done to facilitate approval of contracts and cases without the required due diligence and scrutiny of the prescribed authorities. It also ensured that the train of decisionmaking and accountability was difficult to establish. Many of these cases also involved impropriety, irregularity and lack of transparency,” the CAG report said.

The audit watchdog’s attempts to find the fate of the contracts dished out by the OC were hamstrung by the absence of proper documentation.

“The state of documentation in the OC was so inadequate that we were unable to derive assurance as to either their authenticity, or their completeness. In particular, documentation with regard to contracting for goods and services was extremely poor. Even the instructions issued by the CEO in November, 2009, for proper filling and documentation were ignored. Thus, accountability for decisions and acts of omission and commission cannot be easily ascertained. It also made the process of decisionmaking non-transparent,” the CAG reported laments.

The audit team failed to come across any contracts register prepared by the OC. “Our scrutiny is thus limited to contracts/agreements/work orders about which we could gather information. Incidentally, although the secretary general, who is the authorised signatory for all the contracts, furnished a list of only 326 contracts, we gathered information on 458 contracts. This is also unlikely to be exhaustive,” the reports points out.

From early 2010, the CAG team came across the practice of `bunching’ high-value contracts. This process gained momentum in the second and third quarters of last year. Out of the 458 contracts for Rs 1,551 cr, on which they could gather information, 428 contracts worth Rs 1,356.55 cr were finalised only in 2010.

Of these, 410 contracts, whose value came to Rs 1,292 cr (82%) were signed in the second and third quarters. These included such major contracts as overlays (Rs 630.23 cr), catering (Rs 131.59 cr), technology contracts (Rs 118.74 cr) and ticketing agency (Rs 14 cr). Economic Times

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