Aug 6, 2011

Read Complete CAG Report on XIX Common wealth Games 2010 Part 4

Read Complete CAG Report on XIX Common wealth Games 2010 Part 4

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

Streetscaping and Beautification of Roads around CWG Venues

in our view, the street-scaping and beautification project was ill-conceived
and ill-planned

Streetscaping and beautification works at exorbitant average awarded costs
of Rs. 4.8 crore/ km (compared to NHAI's estimated cost of Rs. 9.5 crore / km for
constructing a four-lane national highway or Indian Railways' estimated cost of
about Rs. 4.1 crore/km for constructing railway track) were awarded and executed
in an ad hoc and arbitrary manner, with wasteful expenditure of Rs. 101.02 crore.

The consultants were given a free hand to draw up designs and estimates for the packages allotted to them. This resulted in adoption of richer specifications in an arbitrary and inconsistent manner in different packages. We also found adoption of higher rates/ short recovery, and other deficiencies in contract management. Third Party Quality Control failed to provide adequate assurance on the specifications and materials
used in the works.

Records show the decision on use of imported luminaries being taken with the active involvement of the CM at various stages. No technical note regarding reasons for use of imported luminaries along with cost benefit analysis was found on record.

The imported luminaries were procured at a far higher cost than the
domestic luminaries, leading to avoidable extra expenditure of Rs. 31.07 crore
across the three agencies.

We also found that the procurement price of imported luminaries was far higher than the
fair price computed on the basis of actual invoice price.

The awarding of work in NDMC after calling of design based tenders
resulted in an extra expenditure of Rs. 6.77 crore, as work was awarded to the
bidder with higher unit rates for various items.

NDMC also awarded additional work of 18.445 km, incorrectly terming it as deviations to the original contract. We believe that this may lead to an estimated additional loss of Rs. 6.13 crore.

Restrictive tendering conditions were stipulated and the work was split into
three parts in PWD, with requirement of not more than one work to one bidder,
reducing the competition between the bidding firms. After once being declared
disqualified, one of the firms, Spaceage was irregularly declared qualified on
subsequent re-assessment, following his appeal to the CM.

We found avoidable expenditure of Rs. 2.54 crore in contracts awarded by
MCD (due to non-compliance with design specifications), as well as suspected
post tender alteration of bids in two cases, which had resulted in enhancement of
the quoted amounts by Rs. 6.97 crore.

We found that the department did not facilitate healthy competition, but
merely ensured sharing of signage work between the two major sheet
manufacturers, 3M and Avery-Dennison. Instead of calling a single tender for the
complete work, the project work was divided among three PWD Zones for
separate tendering and execution, with restrictive conditions, leading to only two
valid bidding parties, with work automatically getting distributed between them.
The anti-competitive bidding conditions led to work of one zone being awarded at
least Rs. 1.40 crore above the corresponding cost in the other two zones as well as
higher overall costs of procurement in PWD

Subsequent to the award of work, the designs for the signages were
substantially revised, leading to large number of extra and substituted items of
dubious utility with additional avoidable expenditure of Rs 14.88 crore.

Two works costing Rs. 62.63 crore were got executed by PWD through
deviations of ongoing works, instead of calling for fresh tenders, on grounds of
urgency. These works however, were, not completed in time for the games.

PWD also awarded work for construction of two arch foot over bridges (FOB) for Rs.
10.35 crore at JLN Stadium using for the first time, a suspension bridge design
using imported Macalloy suspension system. One of the FOBs collapsed and the
work was subsequently stopped on both the FOBs. Both are still lying incomplete.

the project for renovation and restoration of Connaught Place (CP) was envisaged in April 2004, it was plagued by undue delays. The original estimated cost of Rs. 76 crore (as of May 2005) went up nearly nine-fold to Rs. 671 crore by July 2007, with a huge increase in scope of work.

the pilot project for facade restoration of 'C' block the project remained incomplete at the time of the Games. We also found significant deficiencies in contract management, with consequent avoidable expenditure.

In September 2008, GNCTD decided to introduce a TETRA network (a
professional mobile communication service essentially meant for emergency
services and government agencies) in time for CWG-2010. GNCTD awarded the
contract for TETRA at Rs.99.81 crore for an 87 month period, covering not only the
Games period but also a seven year legacy period.
Post CWG-2010, most of these expensive TETRA sets are, in
effect, no more than mobile phones
During CWG-2010, low floor buses of DTC were used for ferrying the
athletes, technical officials and media persons.

For keeping the buses 'new' for CWG-2010, DTC kept about 16 per cent of its low floor fleet idle between March and August 2010; further, 78 per cent of the Blueline fleet was also taken off the roads in the NDMC area for the duration of the Games. This, compounded by large scale diversion of DTC drivers for Games-related duties, led to significant disruption of public transport services.

Modernisation projects like LED destination boards on standard buses, and
construction of Time Keeping Booths could not be completed before CWG-2010
as envisaged.

For getting 1500 Bus Queue Shelters (BQSs) constructed before the
Games, So far, only 472 BQSs could be completed.

The bus parking constructed at the Ash Pond opposite the Millennium Park
is not really a temporary structure. It has certain permanent constructions. Its use
has continued well beyond the short requirements of the Games. This was clearly
in violation of the Master Plan for Delhi 2021 and the proposed Zonal plan of Delhi,
which earmarks the area as a green zone with recreational uses but without
permanent construction.

GNCTD planned to commission a new power plant at Bawana on the
grounds of increased dependence on own power generation sources. The
construction of the 1500 MW Bawana gas-based power plant was, however,
delayed, and could not be completed in time for the Games.

Delhi Transco Ltd. (DTL) also took up five 220 KVA substations and seven corresponding cabling projects to strengthen the power supply situation in Delhi in time for the Games.

CYG-2008, Pune was expected to be a learning experience for the staging of
CWG- 2010 at Delhi. The deficiencies noticed at Pune, and the resulting
recommendations were intended to ensure that these were not repeated in CWG-2010.
OC repeated its mistakes in key functional areas during CWG-2010, notably technology, ticketing, sponsorship and merchandising, press operations, catering and accommodation

We also found several deficiencies in the procurement of electronic, sports
and other equipment for CYG-2008. Most of the security equipment indented for
CYG-2008, Pune was either ordered after the Games, or received after the Games.
Many of the city infrastructure projects (taken up largely under JNNURM) could
not be completed in time for the Games.

The award of the broadcasting services contract by PB to SIS Live was
Prasar Bharati (PB) agreed at the pre-bid meeting to
finalise the contract terms “mutually” with the selected entity, and
subsequently amended numerous clauses of the draft contract to make it
one-sided in favour of SIS Live

Contrary to the intent of the contract with PB, SIS Live outsourced almost the
entire contract on the same day to Zoom Communications, which would
have been ineligible for bidding. We found that SIS Live and Zoom were in
alliance much before the signing of the contract with PB, and even at the
contract drafting stage, the intention of SIS Live to outsource the contract
was clearly evident.

While PB's contract with SIS Live was for Rs. 246 crore, the sub-contract
between SIS Live and Zoom was for only Rs. 177.30 crore (which would also
factor in Zoom's profit margin). Clearly, there was a substantial loss to PB
and Government,

As per the contracted schedule of payment, SIS Live was to receive only 30
per cent payment before 14 October 2010, with the balance only on
verification of performance. This was irregularly amended to allow 60 per
cent payment in advance of the Games

The estimates for telecommunications services provided by MTNL at
different points of time were unreliable and lacked adequate support, with the final
infrastructure cost of Rs. 270.70 crore (excluding taxes) approved by the GoI
being more than eight times the estimates of approximately Rs. 33 crore for
Melbourne CWG-2006.

The contract awarded by MTNL to the HCL/ Cisco team
was for an even higher amount of Rs. 387.19 crore. Clearly, there was a substantial
loss to the GoI on account of this decision.

5 items of medical equipment (estimated at Rs. 5.89 crore) included in the HAP were not ordered at all, while an additional 5 items (which were not included in the HAP) were purchased for Rs. 1.10 crore

the Sports Injury Centre (SIC) at Safdarjung Hospital was
inaugurated in September 2010, it was not fully commissioned even in November
2010. Many items of equipment were yet to be procured and/or installed, and
training on use of equipment was yet to be fully imparted.

The attempt to strengthen ambulance services in time for CWG-2010
through deployment of 150 ambulances in PPP mode was a failure, since the
contract with the selected concessionaire (Fortis Healthcare) was terminated for
failure to deliver the ambulances in time. In our opinion, this eventuality arose
because of the DoHFW's failure to specify the exact nature of the ambulance
vehicle well in advance. Government then acquired just 31 ambulances in June/
August 2010 on direct procurement for the Games at a much higher price.

Electronics Corporation of India Ltd. (ECIL), a PSU, was appointed by the
GoI in May 2009 on “nomination basis” to provide an Integrated Security System
(ISS) for CWG-2010. We found that ECIL prepared a highly inflated cost estimate
(approved at Rs. 346 crore) which allowed it to make an exorbitant profit of at least
Rs. 126 crore. We recommend that final payments may be released to ECIL only
after detailed examination of actual costs and an appropriate certification by
ECIL's statutory auditors after allowing a profit margin of upto 20 per cent.

We found that 176 Portable Explosive Detectors (PEDs) worth Rs. 39 crore
were wrongly procured by ECIL, and remained unutilised; similarly, 15,090 out of
18,700 RFID tags for accredited vehicles also remained unutilised.

ECIL identified legacy and non-legacy equipment worth Rs. 272.65 crore, which had still not been redeployed or utilised.

On the infrastructure front, SAI failed –
out of funds of Rs. 78.63 crore released for infrastructure up-gradation, expenditure of Rs. 74.35 crore was not fruitful in time for the Games.
Further, out of the envisaged Rs. 9.20 crore of sports science equipment, only a
negligible amount of equipment was in position before the Games

On the infrastructure front, SAI failed to construct hostels in five regional
centres, while hostels constructed in three regional centres could not be utilised
due to non-availability of furniture, kitchen and other supporting facilities. Seven
out of eight sports science centres, all eight standard modern fitness centres, and
renovated/ upgraded halls at various centres could not be utilised before the

There were deficiencies in financial management, including non refund of
the unutilised amount of Rs. 45.50 crore by SAI and diversion of Rs. 19.00 crore for
construction of the administrative block of SAI Hqrs building.

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

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

Reality views by sm –
Saturday August 06, 2011

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

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