Faced with the threat of a lawsuit by Australian firms over recovery of dues, beleaguered Commonwealth Games organisers on Thursday sought to justify the delay in settling bills, saying final payments are made only after complete reports from Functional Area Heads are received and analysed.
Reacting to reports that events organiser Ric Birch has commissioned law firm Slater and Gordon to draw up a multi million dollar lawsuit against the organisers, the OC said, “As much as 90 per cent of the contracted amount to Birch has already been released.”
“There are issues pending on account of under-performance vis-is contractual obligations, as raised by the Functional Area head. Hence, the final instalment has been held back and the party has been informed accordingly,” OC chairman Suresh Kalmadi said in a statement issued on Thursday.
The decision to withhold payment was approved by the Executive Board on Dec 14 last year. “Mr Birch was not available at a crucial juncture of the final preparation for the closing ceremony and there were instances of incorrect advice that cost OC time and resources”, he said.
The organising committee said that it was aware of the responsibilities of releasing all payments on time and all efforts in this direction are being made.
“It may be noted that it is normal practice for the final payments to be released to vendors only after complete reports from the Functional Area heads are received and analysed,” Mr. Kalmadi said.
About Howard & Sons, another firm involved with the Games, the OC wrote, “As much as 65 per cent of the contracted amount has already been paid. Since its contract underwent two changes, OC needed clarity on taxes. The taxation advice we obtained from the chartered accountants and, accordingly, the payment is being released this week.
Mr. Kalmadi said it has made the full payments to Norwest, as per its contract, except the performance bank guarantee amount.
“OC has only recently received the original invoices and the payment is being released.”
As far as travel grants to the Australian Commonwealth Games Associations were concerned, the OC has “released full payments to as many as 39 of the 71 members“.
“Of the remaining 32 CGAs, the OC has already released 70 per cent of their payments. After verification of cost of damages in Games Village, variation in team size, recoveries on account of security deposit/rate care items etc, the remaining amount will be released this week,” the statement said.
Earlier, Australian foreign minister Kevin Rudd took up the issue with his Indian counterpart SM Krishna during their bilateral talks today during which the latter promised to deal with the issue on his return to New Delhi.