Aug 6, 2011

Read Complete CAG Report on XIX Common wealth Games 2010 Part 3

Read Complete CAG Report on XIX Common wealth Games 2010 Part 3

The Comptroller and Auditor General (CAG) report on Commonwealth Games has been tabled in Parliament.

Sports –

There were several deficiencies in the procurement of sports equipment,
such as not following global tendering procedures, purchases on single tender
basis, and deficient assessment of requirements.

The procedures followed for hiring Mr. Greg Bowman and his company,
Great Big Events (GBE), for a multiplicity of contracts relating to sports
presentation ceremonies were questionable.

One contract was, in effect, de-activated in September 2010, and re-awarded at exorbitant rates to GBE.
CAG also noticed fraudulent payments to GBE for false claims of personnel assignments
(when they did not even visit India).

Games Branding –

CAG found the exorbitant cost of Rs. 10 crore for the GNS contract was
due to a decision to go in for outsourcing (as against the internally developed
option used at Melbourne-CWG 2006) and also on account of flawed tendering
procedures (with re-tendering) resulting in award on a single financial bid to
Infostrada Sports.

GNS failed to perform satisfactorily during the Games, as the
Games news content was inaccessible from 5 to 8 October 2010 and was rectified
subsequently using makeshift arrangements.

The selection of the “Games Look Provider” for preparing banners was
marked by a cluster-based approach (as in the case of overlays).

Further, on the pretext of urgency, a snap bidding process was used. As in the case of the venue overlays contracts, OC allowed several ineligible vendors to bid, while
disqualifications were made on a selective basis.

We also found the same vendor quoting different prices for the same items across clusters

CAG found serious deficiencies in the award of the workforce consultancy
contract to a consortium of E&Y and EKS.

The tendering process was clearly tailored to favour EKS. There were several deficiencies in the contractual clauses, which tended to favour the interests of the consultant, as well as in the execution of the contract.

major deficiencies in certain functional areas included the following:

492 persons who had not received security clearance were incorrectly listed
in the data for the Integrated Security System, which indicated that the
accreditation system was not followed strictly.

1.5 lakh lanyards at a cost of Rs. 0.68 crore were procured with an
inexplicable fire retardant requirement of 800 degrees Celsius.

Contracts for venue cleaning services were awarded irregularly, using a
cluster-based approach, to just two contractors.

Restrictive eligibility criteria were applied in a biased manner. 8 out of 9 packages went to A2Z Maintenance and Engineering Services, which was also engaged by OC for
office automation services.

We found that the appointment of Consulting Engineering Services (CES) as
the main design consultant for the five main stadia was seriously flawed.
The performance of CES in almost all the venue consultancy contracts was abysmal.

We found serious deficiencies in the award of the contract for laying of synthetic athletic track surfaces by CPWD to Shiv Naresh Sports Pvt. Ltd. The restrictive tendering conditions resulted in a situation where the awarded rates were much higher than comparative rates quoted for similar works.

We found deficiencies in the selection and performance of Architect Bureau-GSA Group Consortium as design consultant for the archery competition venue, training venues and refurbishment work.

The main contractor hired for Shivaji Stadium was a foreign
company, China Railway Shisiju Group Corporation (CRSGC), when it is apparent
from the conditions of the NIT, that such was not the intention. Shivaji Stadium
could not be completed in time for the Games and the completed hockey pitch in
the stadium has an East-West orientation, as against the required North-South

Simplex Project Ltd. was engaged as the main contractor for the works at
Talkatora Indoor Stadium on a single bid basis; we are unable to derive assurance
that the best price was determined for the work in a competitive market.
The quality of construction was also found deficient by CTE,CVC.

In the case of Thyagaraj Stadium, we found several instances of adoption of
higher cost items for estimation/execution from among multiple options, and also
numerous instances of specifying a single brand or “equivalent”, thus favouring
these brands, with consequential reduced competition and increased costs.

We also found multiple forms of power back up – a solar power generator unit, and a
duel fuel gas turbine with add-on Vapour Absorption Machine (VAM). The
expenditure of Rs. 22.41 crore on the turbine and the VAM is largely infructuous, as
it would be highly expensive to generate power from this unit post the Games.

JMI was selected as a training venue for Rugby 7s and table tennis.
We found that the Rugby 7s field, developed at a cost of Rs. 2.11 crore, was being
converted back into a cricket field, which defeats the objective of creation of state of the art sporting infrastructure. Further, Rs. 2.58 crore was diverted for creation of sporting facilities for other disciplines (basket ball, lawn tennis, volley ball, hockey/football etc).

Delhi University and its affiliated colleges were designated as the competition venues for Rugby 7s and training venues for netball, boxing, rugby 7s, athletics and women's wrestling. We found that the legacy plan for training venues at individual colleges, covering the optimum utilisation of developed infrastructure as also arrangements for their regular maintenance and upkeep, is still pending.

We found serious irregularities in the award of the contract for construction of
the residential complex in PPP mode to Emaar MGF Constructions Pvt. Ltd.

There were a series of misrepresentations and accommodations at the RFQ and RFP
stage that resulted in Emaar MGF Constructions Pvt. Ltd, which was not qualified
in terms of the PQ criteria, emerging as an eligible (and successful) bidder through
the consortium route.

In response to the RFP, two bids were received from Emaar MGF
Constructions Pvt. Ltd and DLF Ltd. While DLF's conditional bid was summarily
rejected without any interaction or negotiation, DDA chose to engage in a prolonged correspondence with its financial consultants, legal advisors and Emaar MGF Constructions Pvt. Ltd to find solutions to address the deficiencies in its proposal. Finally, only Emaar MGF Constructions Pvt. Ltd was declared technically qualified, and was awarded the contract on the basis of a single financial bid, thus denying DDA the benefit of financial competition.

The execution of the residential complex project was also plagued by
several irregularities and deficiencies.
The FAR constructed by the project developer substantially exceeded not only the sanctioned plan, but also the maximum permissible FAR under the Master Plan for Delhi – 2021. Emaar MGF also illegally constructed 17 additional dwelling units in the basement meant for parking. DDA allowed several financial concessions to Emaar MGF, including revision of milestones and delayed / non-levy of liquidated damages. Against the stipulated deadline of 1 April 2010, the residential flats were handed over to DDA between June and August 2010 and that too in incomplete condition.

The Central Building Research Institute, Roorkee (CBRI) was appointed by
DDA as the third party independent quality inspection agency for the residential
complex only after most of the foundation work was executed. CBRI pointed out
serious lapses in construction work through thirteen reports between June 2008
and October 2010.

CBRI concluded that on seeing the permeability of the concrete and
the corrosion of reinforcing steel, it gave an impression that the service life of these
towers could not be more than 20 years, unless substantial expenditure was
incurred on repair and retrofitting. DDA did not take adequate action on these
reports, as the deficiencies continued to recur in CBRI's successive reports.

The selection of Sportina Payce Infrastructure Ltd. as the main contractor for the
practice areas was manipulated to ensure that Sportina Payce Construction
(India) Pvt Ltd. (a different entity) pre-qualified and the successful bidder for the
project was different from the pre-qualified consortium.
Subsequently, due to poor performance, the contract was terminated, and re-awarded.

The selection of GL Litmus Events Pvt. Ltd. as the contractor for delivering
temporary structures (overlays) for the international zone and other areas was
equally flawed.

The successful bidder was entirely different from the pre-qualified
entity, and the foreign entity with relevant expertise was not part of the successful
bidding entity.

Further, for a contract of Rs. 41.38 crore, the bulk of the material for
which was to be imported, the value assessed at the Indian customs was only Rs.
5.32 crore

Delhi Jal Board (DJB) constructed a 1 MGD Water Treatment Plant (WTP) for
the Games Village, Akshardham Temple and surrounding areas at a cost of Rs.
35.20 crore. We found that the need for a separate 1 MGD was not clearly
established and the plant was over-designed with expensive membrane filtration
technology. Further, the tendering process was flawed and irregular, with undue
and inexplicable delays. The bid evaluation was tailored to favour award of the
work to a single bidder.

The WTP is currently shut down and its requirement on a legacy basis is questionable.

DDA also purchased four 1250 KVA each generating sets with excessive
and undue redundancy, which are now lying idle. Plans to shift two of these sets to
DDA Headquarters (VIkas Sadan) appear unreasonable, as Vikas Sadan's current
load is just 1230 KVA.

Suggested Reading –
Read Complete CAG Report on XIX Common wealth Games 2010 Part One

Read Complete CAG Report on XIX Common wealth Games 2010 Part Two

Reality views by sm –
Friday, August 05, 2011

Tags – CAG Report On Common Wealth Games 2010 Corruption Report CAG

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