The Comptroller and Auditor General's performance report on the Delhi Commonwealth Games has revealed how four consortiums having international stakeholders which put in bids for four major projects at the Games Village -- the residential project complex, design consultancy of permanent structures including practice areas, the construction work on these areas, and the erection of temporary structures/overlays -- “faded” away following which their subsidiaries/Indian partners lacking requisite experience, turnover or net worth won the contracts, and delivered poor quality works at inflated rates. The Delhi Development Authority, which erred in the first place by awarding these companies the contracts, compounded its errors by failing to effectively monitor or penalise these errant firms.
The auditor has listed in detail how the presence of Dubai-based Emaar Properties PJSC in the Emaar MGF Constructions consortium's bid to build the residential towers helped it win the contract, but how the former “faded behind layers of subsidiaries/associates, effectively making a mockery of the premise that it would bring the necessary experience and financial strength” to the consortium.
The design consultancy for permanent structures and practice areas which includes the fitness centre, training hall, swimming pool and athletics stadium at the Games Village, saw the presence of France-based Decathlon SA (which had experience in Athens Olympics) in a consortium led by Suresh Goel and Associates that helped the latter win the contract.
Following a dispute, Decathlon SA dissociated itself from the consortium with the CAG observing: “Clearly, SGA was engaged as the design consultant on the premise that it would bring in international expertise, and accordingly its fees were also justified. However, no such benefits accrued to DDA due to the dispute with Decathlon SA, the master planner and sport architecture specialists with the requisite international experience.” The performance of the design consultant was also criticised with the auditor finding deficiencies in preparation of designs, drawings, bill of quantities and estimates; reduction in scope of work; and delay in achieving milestones.
For the construction work on the practice areas, though the company pre-qualified was Sportina Payce Construction (India) Pvt. Ltd, the tender documents were bought by Sportina Payce Infrastructure Pvt. Ltd., a different legal entity, registered only on January 16, 2008, but which applied for the tender document on 15 January 2008.
The CAG found that Sportina Payce Construction had Australia-based Payce Consolidated and Sportina Exim as the lead partners while the contracted company, Sportina Payce Infrastructure, had two Indian-origin shareholders of Sportina Exim as promoters.
“Ultimately the successful bidder was an entity, different from the pre-qualified agency, without any confirmed association with Payce Consolidated Ltd., Australia – the projected lead member with experience of design and construction of mixed use development in Australia, on the basis of which the consortium was pre-qualified. DDA could also not produce any evidence of the association of Payce Consolidated Ltd in the execution stage as per MoU,” the CAG observes.
For the supply of temporary structures and overlays, a consortium, GL Events-Litmus, won the contract comprising France-based GL Events and Services SA and Meroform India. However, the contract was finally signed with another company, GL Litmus Events, which had shareholding by Binu Nanu (70 per cent) and Meroform India (30 per cent).
“GL Events and Services SA (France), on the experience of which the consortium had been shortlisted was no longer a shareholder of the contracted bidder.”
Though the DDA replied that GL Litmus Events had approved a resolution to transfer 70 per cent of its shares held by Binu Nanu to GL Events and Services SA (France), “no evidence of actual transfer of shares before signing of the contract was produced”. The execution of the contract also came in for the auditor's criticism with no record of the structures erected complying with technical specifications.