CAG drags PMO in CWG mess

In its voluminous report on the October 2010 mega sporting event, the CAG found "irregularities", "favouritism" and "bias" in award of contracts for various projects like construction and development of Games venues and Village, infrastructure development and beautification in Delhi and broadcasting rights.

The government auditor also faulted the government for not setting up a "single point of authority and accountability" and said there was "lack of clear governance structure, a multiplicity of coordination committees were created, disbanded and reconstituted at different points of time." Referring to the controversial appointment of Kalmadi, the CAG said, "The (CWG) bid document of May 2003 envisaged the OC as a 'government-owned registered society' with the Chairman of OC Executive Board (EB) being a government appointee, and the IOA President being only the EB Vice Chairman."

However, "the OC was ultimately set up in February 2005 as a 'non-government registered society' with the IOA President Shri Suresh Kalmadi as the Chairman of the OC EB," it pointed out.

The CAG said "despite serious objections" from the then Sports Minister late Sunil Dutt, Kalmadi was "appointed as the OC Chairman, based on a PMO recommendation of December 2004.

"This decision facilitated conversion of the originally envisaged government-owned OC into a body outside governmental control without commensurate accoutability to government and concomitant controls to ensure propriety and transparency (despite full financial guarantee and funding from government)." The auditor said attempts in 2007 by then Sports Minister Mani Shankar Aiyar and then Sports Secretary S K Arora with the PMO, the Group of Ministers and the Cabinet Secretariat, "highlighting the ineffective position of the Sports Ministry in exercising control over the OC, met with strong resistance from the Chairman OC, and were hence rendered unfruitful."

It pointed out that the commitment of the central government in conjunction with Delhi government in Sept 2003 to become parties to the Host City Contract (HCC) was "critical to the success of the IOA bid for Delhi" to host the Games.

"...thus, the Games became the property of the nation, rather than merely that of the IOA. This was, however, inadequately reflected in the subsequent construction of the Organising Committee," the CAG observed.

"In our opinion, the unique challenge of managing and monitoring the activities of multiple agencies for delivering the Games project should have been met by entrusting its stewardship to a single point of authority and accountability, with adequate mandate to ensure all deliverables in time, to cost and to specified quality standards.

The CAG also noted that "in view of the government guarantee for meeting the cost of the Games, it was essential for such stewardship to be fully under government control. However, this model of management or financial control was not followed for the Games project."

The auditor said the change from 'government-owned registered society' to 'non-government registered society' with Kalmadi as Chairman of OC EB was "orchestrated through a sequence of events, commencing with a document titled as an 'updated bid' of December 2003 (which had no legal sanctity or relevance), indicating a changed structure."

This 'updated bid', "surfaced only in September 2004, viz. 16 months after the IOA made its bid and 10 months after that bid had already been declared successful," it said.
"In our opinion, the decision of the PMO for appointing Shri Suresh Kalmadi as the Chairman of the OC facilitated the conversion of the originally envisaged government-owned OC into a body effectively outside governmental control," the CAG said.

Detailing sequence of events, the CAG said Dutt had written to the Prime Minister on November 14, 2004 expressing "surprise" at the resolution passed by the IOA appointing its President as Chairman of the OC.

"This was at variance with the decisions taken in the GoM meeting (of October 25,2004). He also stated that the minutes of the GoM meeting, as issued by the Cabinet Secretariat and received in his office on November 10, 2004, did not reflect the decisions taken in the meeting regarding various aspects of the Composition of the OC," it said.

To a question, Deputy Comptroller and General Rekha Gupta said the auditor had not worked out accumulated losses or wasteful expenditure but said further audit will continue.

"Interestingly, we found substantial differences between the draft minutes of the GoM meeting prepared by the Minister of Youth and Sports and those finalised by the Cabinet Secretariat and forwarded to the PM," the CAG said.

On December 6, 2004, "a communication from the PMO stated that institutional arrangements had been evolved for the conduct of the CWG-2010," the report said, adding that in this, Kalmadi was "indicated as the Chairman of the Organising Committee and the Executive Board."

It also "communicated the Prime Minister's direction that these institutional arrangements be considered in the next GoM meeting", the CAG said.

The second GoM on January 14, 2005 did not take a view regarding the governance structure but the third GoM on January 29, 2005 "endorsed the views of the PMO and decided that the OC would be headed by Shri Kalmadi", it said.

The auditor noted that an "unwieldy 400-plus" general body of the OC was constituted "which was not envisaged in the bid document or the Host City Contract" and did not result in any significant benefit or value addition to the Games.

"The OC... functioned, in effect, as a parallel, non-governmental organisation, without commensurate accountability to government and concomitant controls to ensure propriety and transparency (despite full financial guarantee and funding from government)," it said.

The CAG also roped in Delhi Chief Minister Sheila Dikshit, saying with her "active involvement" luminaries (street lights) were imported at "far higher cost" than the domestic ones, leading to "avoidable extra expenditure of Rs 31.07 crore".