CAG's CWG Audit Report - Chapter - 28 (2011)

8/6/2019 CAG's CWG Audit Report - Chapter - 28 (2011)

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c : : :wl-e ..::I:uMedia and Broadcasting Services

Although Doordarshan was indicated as the Host Broadcaster in the May 2003 bid, it wasformally notified by the OC only in March 20071 and the Host Broadcaster agreementbetween the OC and Prasar Bharati (PB) was signed in May 2009.The award of the broadcasting services contract by PB to SISLive was flawed on severalcounts: Only one bidder, SIS tive, was qualified on technical qrounds, and the contract was

awarded on a single financial bld, without any competition. Undue delays on the partof PB and the Ministry of Information & Broadcasting (MIB) led to a situation wherere-tendering was not considered feaslble, and, thus, facilitated the award of thecontract on a single financial bid.

Lack of competition was facilitated by a rigid stand taken by PBat the stage of bidding(especially on the payment schedule}, which restricted potential competitors frombidding. However, PB agreed at the pre-bid meeting to finalise the contract terms"mutually" with the selected entity, and subsequently amended numerous clauses ofthe draft contract to make it one-sided in favour of SISLive.

Contrary to the intent of the contract with PBI SISLive outsourced almost the entirecontract on the same day to Zoom Communications, which would have been ineligiblefor bidding. Wefound that SISLive and Zoom were in alliance much before the signingof the contract with PBI and even at the contract drafting staqe, the intention of SISLive to outsource the contract was clearly evident.

While PB's contract with SISLive was for Rs. 246 crore, the sub-contract between SISLive and Zoom was for only Rs. 177.30 crore (which would also factor in Zoom's profitmargin). ClearlyI there was a substantial loss to PB and Government, although we areunable to quantify this loss (based on available and verifiable records).

As per the contracted schedule of payment, SISLive was to receive only 30 per centpayment before 14 October 20101 with the balance only on verification ofperformance. This was irregularly amended to allow 60 per cent payment in advanceof the Games (subject to successful installation and testing of equipment). Had thisrelaxed payment schedule been incorporated at the bidding staqe, there would havebeen much greater financial competition, reducing the ultimate cost to the publicexchequer.

PBfailed to enforce compliance by SISLive with even the conditions associated withthe relaxed payment schedule viz. short supply of equipment, irregular changes in

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Chapter 28 - Media and Broadcasting Services

make/ model of equipment involving financial implication of Rs.17.39crore and non-co-operation by SISLive with PB's technical inspection team.

There were also several deficiencies in the execution of the contract. The entire paymentfor coverage of the QBRwas released to SIStive, despite non-receipt of tapes relating to 5out of 21countries and delayed receipt vis-a-vis the stipulated time schedule (which wasnecessary for timely coverage). SIS technical personnel I who were approved by PB andwere required to be present during the Games, were replaced by other personnel of SIS.Wefound that the Host Broadcast Management Committee (HBMC) set up by the PB didnot achieve the desired results. There was a lack of consensus among members of theHBMCI with dual minutes in respect of three meetinqs, an important meeting involvingmajor decisions signed by only 4out of 7members, and legal opinion being sought on keyissues; this ultimately resulted in debatable decisions, which favoured the interests of SISLive. The Ministry of Information and Broadcastinq, as well as an Oversight Committee(chaired by the Ministe~ I&B and co-chaired by the Minister of Law and Justice) which wasconstituted to monitor the progress of activities and expedite decisions, chose to largelyaccept the proposals putforward by PB.The legacy value of HDTV coverage of CWG-2010 to PBI both in terms of improvement ofinfrastructure and development of in-house skiils, was insignificant despite incurring ofsuch huge expenditure out of Gol funds. PB participated in production of only threeevents as against the initial plan of coverage of 10out of 17events in-house. Training wasimparted to PB staff only in non-Games venues, and there was no evidence of suchtraining being imparted on the highly specialised DB vans usedforGames production.Furthet; PBfailed to take advantage of the Cabinet approved scheme for upgradation ofDoordarshan to HDTV. Consequently I the training received by PBpersonnel from SISLivewould also become largely redundant, in the absence of HDTV equipment in PB.The award of the contract for construction of the International Broadcast Centre (lBC) byPB was flawed. Two entities (Shaf Broadcast and Anytime Pictures lid.], which had beenfound ineligible on account of lack of experience at the EOI stage by the EvaluationCommittee, were irregularly included in the shortlist, and the final contract was awardedto Shaf Broadcast at a cost higher than that was approved by CCEA.

28.1 Planning and Budgeting forMedia and BroadcastingServices

Bharati (PB)/ Ooordarshan (~O) and PressInformation Bureau (PIB) under the Ministryof Information and Broadcasting (MIB); andthe India Trade Promotion Organisation(ITPO). Their roles and functions were as inTable 28.1.

Planning and delivery of media andbroadcasting services for coverage of CWG-2010 involved multiple agencies - Prasar

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Table28.1 - Roles of different agencies for media and broadcasting servicesAgency Role and Functions

Doordarshan (DO) /Prasar Bharati (PB) Host Broadcaster (HB): Television and radio production; Broadcast venue operations and services; and Setting up the International Broadcasting Centre (IBC).

Press InformationBureau (PIB)

Providing and managing the Main Press Centre (MPC) and Mini PressCentres at each venue.

India TradePromotionOrganisation (ITPO)

Providing international standard infrastructure facilities at PragatiMaidan for the IBCand MPC

28.2 Costing and Estimation forMedia and BroadcastingServices

services was unduly delayed (taking 15months from July 2007 to October 2008)with no sense of urgency apparent amongstthe various approval agencies.

The finalisation and approval of the budgetestimate for media and broadcasting

Figure 28.1 - Undue delays in approval of budgetfor media and broadcasting services

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Chapter 28 - Media and BroadcastingServices

The Cabinet finally approved an overallamount of Rs.463 crore for media andbroadcasting services for CWG-20l0(including CYG-2008), as follows:

Table 28.2 - O riginal budget jarm edia and broadcasting services

(Rs. in Crore)ITPO

463.00

Host 49.00BroadcastingServices (PB)

366.00 415.00

PIB l.20 18.80 20.0028.00 28.00

Total 50.20 412.80

The Cabinet note envisaged that sincerevenue generation from the Games by PBwas uncertain', 50 per cent of the fundingto PBwould be as grant-in-aid, with theremaining 50 per cent as an interest-freeloan (with conversion into grant-in-aid to beconsidered, if required, at a later stage).Subsequently, in January 2010, revised costestimates of Rs.482.57 crore wereapproved by the EFC(within the approvedlimit of variation of 20 per cent). A profile ofthe revised estimates and the actualexpenditure incurred (as of December2010) is given below:

Incidentally, no such uncertainty was expressed at thistime regarding oc's generation of revenues (includingbroadcasting revenues).

Table 28.3 - Revis ed budge t and expenditu rejor m edia an d b roa dca stin g service s

(Rs. in Crore)

II.A A AI ICYG-2008, 50.20 9.05 9.05PunePB 366.00 366.00 225.89PIB 18.80 3l.75 20.72ITPO 28.00 75.77 37.70Total 463.00 482.57 293.36

The spirit of the variation limit of 20 percent for EFC(rather than CCEA)approvalwas not observed. The upward revisions forthe PIBand ITPDwere 69 per cent and 171per cent, which were hidden within theoverall upward revision of Rs.19.57 crore,by partly adjusting the savings of Rs.41.15crore on account of CYG-2008, Pune.Incidentally, the savings on CYG2008, Pune,were achieved due to the decision of MIBfor in-house production and coverage by PBin SDformat, as against outsourcing to SISLive (which was the chosen bidder).

28.3 Broadcasting Services byPrasar Bharati

28.3.1 OverviewWe have already highlighted in Chapter-8on Revenue Generation, the abnormaldelays by the DC in finalising the contractwith the Host Broadcaster, Prasar Bharati(PB). Despite having declared PBas the HostBroadcaster in the original bid of May 2003,DC formally communicated thisappointment to Prasar Bharati only inMarch 2007.Under the Host Broadcaster ServiceAgreement, which was signed between theDC and PBin May 2009, PBagreed toundertake, at its own cost and expense, all



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obligations stipulated in the CWGBroadcasting Guidelines. This essentiallycovered production and distribution of"basic feed" for all the sports and theopening and closing ceremonies in HD (HighDefinition) format. As a concession tothose international broadcasters who didnot support HD format, PBwas required tooffer the basic feed signal to broadcasters atthe venue in SD (Standard Definition)format also.

28.3.2 Cost EstimationPB's initial budget estimate of July 2007 ofRs.557 crore for broadcasting services wasnot found to be realistic by the Ministry ofInformation and Broadcasting (MIB).Further, OC's Advisor - Broadcasting, ShriPatrick Furlong advised PBto prepare arealistic budget estimate after issuing aRequest for Information (RFI).In October 2007, PB issued an RFI,to whichonly one complete response' fromInternational Games Broadcasting Services{IGBSf was received. After receipt of thisresponse, PB prepared a revised budget ofRs.445 crore for broadcasting services inNovember 2007. This was finally reduced toRs. 366 crore in the approved Cabinetestimate of October 2008.

We could not derive assurance as to thereasonableness and reliability of theapproved budget estimate of Rs. 366crore for broadcasting services. Theaward of the contract for 'production andcoverage' to SISLive for Rs. 246 crore ona single financial bid basis and its back toback sub-contracting to ZoomCommunications Ltd. for Rs. 177.30 croreconfirm the unreliability of the estimates.


28.3.3 Award of Contract for Productionand Coverage

28.3.3.1 Undue DelaysThe process for tendering and award of thecontract for production and coverage to SISLive took inexplicably long.

Figure 28.2 - Tendering andaward oj contract Jar production

and coverage

EOI proposal by PBOctober 2008

EOI issue (after MIB approval)December 2008

Receipt of EOI responsesJanuary 2009

Issue of RFPJuly 2009

Pre-bid meetingJuly 2009

Receipt of RFPresponsesAugust 2009

Letter of AwardOctober 2009

Signing of ContractMarch 2010

2 The other response by BBC-OB's to the RFI covered only12 events.

3 A joint venture between HBS and IMG Media



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Table28.4 - Comparison oj conditions at pre-bid and contract stages

Area Pre-bad query by bidders Actual Implementationby PBPayment Considering 10 percent No After the first two instalments,schedule performance guarantee, 80 per the payment schedule wascent of payment is not due until changed in September 2010 from

completion of the games. This is at 30 percent before the Games tovariance with the payment 60 percent before the Games.schedule for similar eventsanywhere in the world. Consideringthat the most significant part ofbudget is spent prior to the event,we would request DDfornegotiation on this.Could you confirm that the Nopayment schedule can be discussedand negotiated as part of thecontract negotiation with thesuccessful bidder?Please advise on date and time As per draftframe for releasing payments once contractthe deliverables are submitted

Would HBconsider lowering the Accordance This was changed while finalisingtimeframe of payment from 30 to clause the contract to 10working daysdays to 7 days after submission of 6.3(b) of of submission of invoice alongdeliverables? draft with inspection certificate.

contract.Equipment Would HB consider a later date for No Timeline for installation of

equipment to arrive, if delivery equipment and core teams at siteguarantees were offered? of 31 August 2010 was converted

to proof of despatch ofequipment while changing theschedule of payment in Sept2010.Eventually, SISLivewas allowedto delay the timeline forsuccessful installation ofequipment to 27th September2010.

As per Form Tech 7, details of The entity In August 2010, SISLiveequipments as accurately aswould hasto approached HB for change inbe actually deployed for the games provide the make/model of certainwith makes and models of every list of equipment from those approvedpiece of equipment for every OB. equipment in the production plan, which

and in rare was, however, not accepted by

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Area Pre-bad query by bidders

cases cansubstituteequipment

Actual Implementationby PB

HB. During inspection carried outby the team of technical expertsin September 2010, substantial

with similar deviations in theor better manufacturer/specifications ofspecifica- equipment were noticed but notion with action was taken.properjustification Incidentally, the DG DD statedand that, as per opinion of theapproval of Additional SG,the details ofHB. make and model of equipment

given by entity (in the productionplan) was only illustrative tomeet technical specifications.

It has to beinaccordancewithAppendixVI

Please clarify if the timeline inAppendix VI must be used toconstruct the financial bid or canalternative dates be proposed forequipment personnel arrivalnormally associated withinternational games.

Timeline for installation ofequipment and core teams at siteby 31 August 2010 was convertedto proof of despatch ofequipment while changing theschedule of payment in Sept2010.

Consortium If the entity A substantial part of contract washappens to outsourced to Zoombe a Communications andconsortiumno additioncan bemade andcomposi-tion ofconsortiumshallremain thesame asonsubmissionof EOIresponses.

responsibilities and profits wereshared equally by both, whichessentially makes it apartnership.

Coverage ofQBR

Will the contract be awarded well Contractin advance to enable the bidder to would beplan and prepare to cover the QBR? awarded

well inadvance ofthe QBR

Letter of award was issued to SISLive on 22 Oct 2009, just six daysbefore QBR.

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Evidently, the rigid stand taken by PBat thepre-bid stage was a pre-determinedstrategy to deter other potential biddersand favour SISLive, for whom specialconcessions were accorded subsequently.Due to Prasar Bharati's failure to amend thedraft contract in a fair and transparentmanner in advance of bid submission(rather than allowing it to be insidiouslyamended post facto at multiple stages),only two bids were received. One bid waseffectively withdrawn, as the lead partner-Canadian Broadcast Corporation-withdrew from the consortium. This leftonly one financial bid - that of SISLive - incontention.It may be noted that MIB was involved byPBat each stage of the tendering/ awardprocess. The Oversight Committee(discussed subsequently in para 28.6.3) alsofelt that the process followed was fair andtransparent, although it noted in asubsequent meeting (February 2010) thatsome parties had opted out of the biddingdue to the restrictive payment schedule.Further, the accepted financial bid includedRs.10 crore for Consultancy (whereverrequired), which SISLive had stated to be itsproject profit. In addition Rs.10 crore wasprovided for incidental! contingencyexpenses which SISLive stated to be pre-operative expenses and unspecifiedcontingencies. Although the Host BroadcastManagement Committee (HBMC)5negotiated with SISLive, it could not effectany deduction under these heads. Thus, thecontract was ab initio overpriced by Rs20crore.

5 HBMC was chaired by CEO,PB and comprised Member(Finance), Member (Personnel), DG DO, Engineer-in-Chief DO, DGAIR and Enqineer-in-Chief AIR


We clearly discern PB'Sintent todiscourage other parties from bidding,leaving only one "chosen" bidder (SISLive). The Letter of Award was issued on22 October 2009, just six days before theQBR Launch ceremony on 28 October2009.Miraculously, SISLive, along with itsfuture sub-contractor - ZoomCommunications Ltd., was already inposition (after mobilisation of necessaryequipment and resources), to cover theQBR.

28.3.3.4 Finalisation of Contract withSISLive

The finalisation of the contract between PBand SISLive inexplicably took five months-from 22 October 2009 (when the LoA wasissued) to 5 March 2010. The final contractat a cost of Rs. 246 crore differedsubstantially from the draft contractcirculated at the RFPstage, with all thechanges favouring SISLive and to thedetriment of PB/ Gol.

These changes were finalized as a resultof "negotiations" between PB and SISLive and direct consultations with theSolicitor General without routing throughMIB. The Solicitor General vetted thecontract and settled the changes, amidstthe conflicting views of HBMC members.

A summary of the major changes to thecontract is given in Table 28.5.



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Table28.5 - Changes in Contract ConditionsArea " " . b . & Original provision in brief Provision in final contract

Termination 2.8.5 (a) If the contract is terminated If the contract is terminatedof Contract pursuant to clause 2.8.1 the entity pursuant to clause 2.8.1 theshall not be entitled to receive any entity shall not be entitled topayment .... however HBmay receive any payment ... howeverconsider making payment for the HBshall make payment for thepart satisfactorily performed ..., HB part performed to themay also imgose liguidated reasonable satisfaction of the HBdamages as ger the grovisions ...

2.8.5(c) Upon such termination HBshall be Upon termination under clausefree to engage any other service 2.8.1, HBshall be free to engageprovider as it may deem fit at the any other service provider as itrisk and cost of entity may deem fit ...... in which event

the entity shall be liable only forthe costs of such reglacementservices that are reasonable.

Terms of 6.3(a) The entity shall submit invoice The entity shall submit invoicepayments along with inspection along with inspectioncertificate ....the payment will be certificate ....the payment will bereleased as per work related released as per work relatedmilestones achieved. milestones/sgecified dates within

10working days of submission ofinvoice.

6.3 (b) Once a milestone is completed the Where completion of a milestoneentity shall submit the requisite requires the submission of adeliverables .......HBwill release deliverable ...entity shall submitpayment upon acceptance of the the deliverable ....within fivedeliverables .....if HBfails to intimate working days HB shall confirm itsthe objections within 30 days it acceptance or any deficiencies.shall release gayment without ....Payment shall be released asfurther delay. ger work related

milestonesLsgecified dates within10working days of submission ofinvoice. In case of any unduedelay in gayment HB shall beliable to gay LD .

Liquidated 9.3(a) If the deliverables are not Where amilestone requiresDamages submitted as per schedule, the submission of a deliverable and it

entity shall be liable to pay 1 . is not submitted and delay is notgercent of the total cost of services due to failure of HB ....the entityfor delay of each week or gart shall be liable to pay 1 gercent ofthereof value of the gayment which

would have been due

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Area Original provision in brief Provision in final contract

9.3(b) If the submitted deliverable is not If the submitted deliverable isacceptable to HB....... entity shall be not accepted by HB.......theliable to pay 1 gercent of the total entity shall be liable to gay 1cost of services for delay of each gercent of value of the gaymentweek or gart thereof which would have been due

Liquidated 9.4 Both the parties agree to pay such HBshall be liable to gay to theDamages liquidated damages, asdefined entity LD for any delay inPayable under the provisions of the gayment on gart of HB....for anby PB contract. amount egual to 1 gercent of

value of the gayment due...foreach week subject to a maximumof 10 gercent of contract grice.

9.5 Any LDdue from the entity to HBmay be set off against thepayment due from HBto theentity.

Contract Price 14 Contract grice shall remain firm for Deletedthe entire contract geriod excegtchanges in the tax law.

Sub-Contract 15 Entity shall not assign or transfer Entity shall not assign or transferthe contract or any part thereof. the contract or any part thereof,but HBacknowledges that theentity will uti lise sub-contractorsLgroductionassociates for the gerformanceof the services.


In particular, the new provision allowingSIS Live to util ise sub-contractors/production associates changed thefundamental nature of the contract andpaved the way for SIS Live to outsourcealmost the entire work to ZoomCommunications Ltd. on the same day asthe main contract - 5March 2010.

28.3.3.5 Sub-Contracting by SISLive toZoom Communications Ltd.

PBentered into a contract on 5 March 2010with SISLive for production and coverage of

CWG-2010 at a cost of Rs. 246 crore. On thesame day (5 March 2010), SISLive enteredinto a sub-contract with ZoomCommunications Ltd. at a cost of Rs. 177.30crore, covering almost the entire scope ofwork, viz.: Generation of basic feed; Broadcast venue operations services;

and TrainingWe found that SISLive and ZoomCommunications Ltd. were in alliance much

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before the signing of the main contract andsub-contract on 5 March 2010: SISLive utilized the services of Zoom

Communication Ltd. for coverage of theQBR, which was launched on 28 October2009;

On 5 March 2010, Shri Dehlvi signed as awitness to the main contract betweenPBand SISLive and also as theauthorized representative of ZoomCommunications in the sub-contractbetween SISLive and ZoomCommunications on the same day.Subsequently, Shri Dehlvi correspondedwith PBas the Resident Project Directorof SISLive.

The terms of the sub-contract did notenvisage a principal-agent relationshipbetween SISLive and ZoomCommunications, and made ZoomCommunications responsible forperformance of key services: Managing the broadcast production and

coverage facilities and services; Providing a turnkey solutions for

scheduled services and deliverables; Providing advice and taking decisions to

ensure services of generation of basicfeed, broadcast, venue operations,training etc.;

Provision of 85 per cent of equipmentfor Games coverage and training;

Providing 800 out of the 1200 estimatedGames time staff;

Responsibility for all Indian staff forplanning and management, technicaland production costs for pre-Gamesprogramming, QBR costs, technicalequipment for training, insurance etc.

As per clause 3 of Operating Documentattached with the sub-contract, profitprovision was to be shared equallybetween SISLive and ZooM.

Clearly, practically the entire set ofcontractual services was being executed byZoom Communications Ltd through a back-to-back contract, with SISLive actingessentially as a conduit. The amendedclauses of the main PBcontract, thus,enabled the back door entry of ZoomCommunications Ltd, who was ineligible forbidding for this contract.28.3.4 Irregularities in Contract

Management28.3.4.1 Change in schedule for payment in

favour of SISLiveAs per the contracted schedule of payment,SISLive was to receive only 30 per centpayment before 14 October 2010, with thebalance only on verification ofperformance. PB irregularly amended thisprovision in September 2010 on the basis ofSISLive's request in August 2010 for 100percent advance before the Games, as wellas a statement by DG, DD, that the entitywas considering termination of the contractas the delayed fund flow was making theproject untenable. The amended provision,which was approved by the Host BroadcastManagement Committee (HBMC) in August2010 and the MIB in September 2010,provided for 60 percent in advance of theGames by 27 September 2010 (subject tosuccessful installation and testing ofequipment) and the remaining 40 per centthrough Letters of Credit",

Payment through Letters of Credit was, however, notprocessed.

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Had this relaxed payment schedule beenincorporated at the bidding stage, therewould have been much greater financialcompetition, reducing the ultimate costto the public exchequer.

28.3.4.2 Irregularities in payments madeto SISLive

PBfailed to enforce compliance by SISLivewith even the conditions associated withthe relaxed payment schedule: Payment of the fourth tranche ofRs.73.80 crore was linked with

successful installation and testing of therequired equipment conforming to thequality, make and models indicated inthe production plan.

In August 2010, SISLive approached PBfor changes in make/model of certainequipment, which was not approved.However, SISLive, on 11 September2010, refused to accept the approveddeterminants for payment of the fourthtranche, and insisted on its own list ofdeterminants, which specified onlyinstallation of equipment. This washowever, not accepted by PB.

In the inspection carried out by theteam of technical experts in September2010, several deviations from theapproved specifications were noted. Ikegami/Snell & Wilcox make

equipment in place of Sony, 22Zoom lens in place of 72 Zoom, SSMcamera in place of Robotic camera,Miranda in place of Leitch.

HDCAM VTRs/DDRs were notprovided in any of the venues, 23cameras and four EVSSMSwere notprovided.


Despite the adverse inspection report, thepayment of Rs.73.80 crore for the fourthtranche was released in September 2010,after approval of the HBMC. A committeeto evaluate the financial implications of thisdeviation and shortfall in equipment wassubsequently constituted by DG, DD inOctober 2010, which estimated thefinancial implication at Rs.17.39 crore.

28.3.4.3 Non-deployment of approved keytechnical personnel by SISLive inCWG

Against the 61 key technical personnel forproduction and coverage of CWG 2010stipulated in the contract, we found thatthe list of OC accredited personnel of SISLive included only 22 persons out of the 61identified personnel. Clearly, PBdid notmake any efforts to verify and ensure thatthe key personnel approved by it actuallyexecuted the assigned task.

29.3.4.4 Undue favours to SISLive resultingin extra expenditure by HB

Other favours irregularly granted by PBtoSISLive involved extra expenditure of Rs.3.22 crore on the following tasks: Hiring of lighting consultant - Despite

the fact that SISLive had charged Rs10crore for consultancy over and abovethe consultants already hired under thecontract, PB hired a lighting consultantat a cost of Rs. 21.95 lakhs. Legalopinion in this regard received on 16August 2010 stated that in the absenceof a relevant contractual clause, it wasPB'Sresponsibility to hire a lightingexpert.

Supply of Power Cables - Contractually,SISLive was to provide for laying of



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power cables to interconnect variousfunctional areas at all venues; this wasalso clarified at the pre-bid meeting.However, in July 2010, SISLive statedthat this was not in its scope of workand refused to undertake this task.Consequently, in August 2010, PB hiredBECILto execute this work at the cost ofRs. 0.96 crore, envisaged at SISLive'srisk and cost (as per legal advice). Theultimate cost incurred by BECILamounted to Rs.1.30 crore. Thisapproach was reversed by HBMC inAugust 2010, which decided to imposethe responsibility on the oc.Inexplicably, OC agreed to bear thesecosts. Clearly PB showed undue favourto SISLive on this account.

Special camera mounting - PB incurredan additional liability of Rs1.70 crore onspecial camera mountings, on accountof ambiguities in the contract clausesand divided legal opinion.

28.3.5 Deficiencies in QBR deliverablesThe entire payment for coverage of the QBRwas released to SISLive, despite non-receipt of tapes relating to 5 out of 21countries and delayed receipt of the othertapes relating to 16 countries vis-a-vis thestipulated time schedule which ranged fromtwo days to two months. No tape wasreceived in time and the event wastherefore telecast late.

28.4 Legacyof the GamesDespite incurring of such huge expenditurefrom Gol funds, the legacy value of HDTVcoverage of CWG-2010 to PB, both in termsof improvement of infrastructure and

development of in-house skills wasinsignificant. Non-upgradation to HDTV - PB failed to

upgrade itself to HDTV,even partially ifnot fully, by CWG-2010. Against funds ofRs.165 crore (out of which Rs. 114.61crore was to be spent upto 2010-11)sanctioned by Gol to DD for productionfacilities for HDTV content andterrestrial and satellite transmission DDcould spend only Rs. 6.84 crore for theuplinking facility.

In July 2007, PBproposed that sevensporting events, besides the openingand closing ceremonies would beoutsourced, and the remaining tenevents would be covered in-house. Thiswas reduced in November 2007 to coveronly three events in-house out of the 17events. Finally, PB participated inproduction of only three events in CWG2010, and coverage of all17 events wasoutsourced.

Further, PBspent Rs.7.85 crore fortraining of its staff by SISLive(outsourced agency) on HDTVequipment. Training was imparted tostaff on non-games venues as thevenues were not ready. No records wereavailable to establish that the trainingwas imparted on the same highlyspecialized OB Vans that were used bySISLive for production and coverage ofgames. Consequently, the trainingreceived by PB personnel from SISLivewould also become largely redundant, inthe absence of HDTV equipment in PB.

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At the stage of EFCapproval, PB hadstated that the "legacy which PrasarBharati would carry after the Games isinnumerable development of skills of itsstaft who would get to work with latestand super-specialised equipment on themost advanced HDTV technology. Thiswould place PB prominently on thesports broadcasting field on the worldmap:"In reality, the production anddistribution of CWG-2010 in HDTVformat was an ephemeral exercise, withno legacy capabilities for 00/ PB.


28.5 Other related infrastructure28.5.1 Inordinate delay in upgradation

of hostel facilitiesSanction of Rs. 3.49 crore, in June 2010 forimprovement/upgradation of hostelfacilities at the Staff Training Institute (STI),Kingsway Camp New Delhi in view of CWG-2010 turned out to be redundant despiteexpenditure of Rs.1.72 crore till December2010. The upgraded hostel facilities werenot ready even as of March 2011 and staffbrought from outside Delhi was ultimatelyaccommodated in private hotels duringGames time at an extra cost of Rs.O.19crore.

State of hostel facilities at STI, Delhi



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Furniture lying in PB'sgodowns

28.5.2 Broadcast facility at venuesPBawarded a lump sum contract to BECILfor 'provision and customization ofbroadcast facilities at venues' at Rs. 19.81crore. This included hire of items worth Rs.1.77 crore. However, in July 2010, PBaskedBECILto go ahead with outright purchase offurniture (without concurrence of theHBMC), and a work order for Rs. 1.94 crorewas issued in August 2010. The ultimatecost however, was Rs. 2.20 crore.However, out of this procurement, furnitureamounting to Rs.0.92 crore were still lyingin PB'sgodowns. (December 2010)

28.5.3 Irregularities in award of IBecontract

PBissued an EOI in May 2009 for theconstruction and operation of IBCfacilitiesand services; nine responses were receivedin June 2009.

We found that two entities (Shaf Broadcastand Anytime Pictures ttd.), which had beenfound ineligible on account of lack ofexperience at the EOIstage by theEvaluation Committee, were irregularlyincluded in the shortlist.The contract was finally awarded to ShafBroadcast at a cost of Rs.65.91 crore whichwas much higher than the CCEAestimatesof Rs45.67 crore. Further, PBfailed toadequately negotiate reductions on accountof reduced requirements from RHBs(estimated at Rs.7-8 crore) as well asduplication in air conditioning and firefighting systems (sanctioned by ITPOat Rs.9.87 crore) and obtained a negotiatedreduction of only Rs.4.61 crore.



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28.5.4 India Trade PromotionOrganisation

ITPOwas awarded a budget of Rs.28 crorefor upgradation of ITPO through CabinetNote in October 2008. The MIB approvedthe revised estimates from Rs.28 crore toRs.75.77 crore (including Rs.16.77 croreavailable for rent, electricity and watercharges and fuel expenses) foraugmentation and replacement of AC plant,development of food plaza for the use ofpress, renovation of toilets, hiring of DGsets, firefighting works, and othermiscellaneous works.We found that ITPO and CPWD (theimplementing agency) had unspentbalances of Rs.21.30 crore: ITPO had retained Rs.3.95 crore, while

issuing sanctions of Rs.55.05 crore forcivil and electrical works to CPWD

As of December 2010, CPWD hadawarded works/incurred actualexpenditure of Rs.37.70 crore, with anunspent balance of 17.35 crore.

Since this amount of Rs. 21.30 crorecould not be utilised by ITPO/ CPWDfor CWG 2010, it should be forthwithrefunded to MIB.

28.6 Oversight and Monitoringarrangements

28.6.1 Role of HBMCThe Prasar Bharati Board (Board) formallyappointed a Host Broadcast ManagementCommittee (HBMC)7 in May 20098 TheHBMC was granted the authority to accordthe requisite approvals and take all steps forsuccessful completion of PB'Srole as HB inthe CWG, 2010.

7 Chaired by CEO,PB and comprising Member (Finance),Member (Personnel), DG DO, Engineer- in-Chief DO, DGAIR and Engineer-in-Chief AIR.

8 although it had been functioning since February 2009.



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28.6.1.1 Lack of consensus within HBMCOf the 55 meetings between February 2009and October 2010, records of only 40 weremade available to us, we found that: There was no consensus among the

HBMC Members for finalising the draftcontract. Vigorous objections by theMember {Finance} and Member{Personnel} were ignored;

Minutes of only two out of 40 meetingswere signed by all the members ofHBMC;

In the meeting held on 26 August 2010,several major decisions" were taken, butthe minutes were signed by only four ofseven members;

In three meetings, two sets of minuteswith different streams of opinions wereissued - one by the PBSecretariat andanother by the Member (Finance), alongwith the Member {Personnel}.

Due to conflicts of opinion, legal opinionhad to be sought on several key issuesrelating to drafting of the contract, hiring oflighting consultant, supply of power cables,and special camera mounting.

28.6.2 MIB's RoleThe tendering/ award and management ofthe production and coverage contract wassubmitted for MIB's approval at variousstages - EOI, RFP,approval of the singlefinancial bid, as well as relaxation of the

Regarding engagement of lighting consultant,synchronized camera risers, games time catering, delaysin decision on construction of broadcast compounds,laying of power cables from broadcast compounds tocommentary tribunes, proposed change in supply ofequipment other than mentioned in the RFP,andpayment in respect of QBR.

payment schedule in September 2010 infavour of SISLive. MIB did not showadequate urgency in finalisation of budgetestimates, nor in quick finalisation of theEOIand RFP.These delays left no time forre-tendering in the context of the singlefinancial bid.Regarding major decisions relating to SISLive, MIB chose to go along with therecommendations of PB. In particular, whileapproving the contract award to SISLive ona single financial bid, Secretary, MIB notedthat "given the circumstances and the factthat there is no time to initiate a freshprocess and no certainty as to a better andmore acceptable outcome, the Ministry doesnot have the option of revisiting the issue atthis stage. Moreover; we cannot rule thatmaking any substantive changes in the RFPdocuments following the pre-bid meetingcould have led to objections andcomplaints."Further, approval to the revised paymentschedule was accorded by MIB, primarily onthe ground that they were left with noalternative but to accede to the demands(of SISLive), since non-telecast would be amatter of international embarrassment.Further, Secretary, MIB noted that theCabinet Secretary had also spoken to himon more than one occasion that keeping inview the prestigious nature of the event forIndia, the telecast must be ensured.

MIB chose to largely go along with therecommendations of PB, on grounds ofurgency and lack of alternatives.

510 I PerformanceAudit Reporton XIX Commonwealth Games (CWG-2010)


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28.6.3 Oversight CommitteeThe Oversight Committee" chaired byMinister of Information and Broadcastingand co-chaired by Minister of Law andJustice was constituted on 2 Sept 2009 byMIB to monitor the progress of activitiesrelating to production and coverage ofgames, expedite decision making at variouslevels, and resolve inter-ministerial issues.Its constitution was essentially at the sametime as the receipt of the single financialbid from SISLive. The Committee met sixtimes between September 2009 and July2010. We found that it chose to largelyaccept the proposals put forward by PB, inparticular, on the decisions to awardcontracts to SISLive and Shaf Broadcast, aswell as the changes in the draft contract(which were largely in favour of SISLive).A meeting of the Oversight Committee inFebruary 2010 is of particular interest. Atthis meeting: The Minister for Law and Justice

mentioned that he had gone throughthe opinion of the Solicitor General (SG)on the contract document (particularlywith reference to changes in thepayment schedule from 30:70 to 40:60and waiver of bank guarantee for theinitial two payments). He felt that the SGhad tried more to arrive at acompromise between PBand SIS-Live

10 Other members were Secretary 1&8, Secretary LegalAffa irs, Additional Secretary 1&8, Additional Secretaryand Financial Advisor 1&8, and a law officer to benominated by the Ministry of Law and Justice.


and had not specifically given a findingon the legality of the same. Prima facie,the changes in the payment schedulecould not be considered at this stage,and if insisted, re-tendering may have tobe considered.

The Minister for Information andBroadcasting also noted that someparties chose to opt out of the biddingprocess because of the terms andconditions of the payment schedule. Itwas all along maintained that theschedule could not be changed;changing it now may leave the fieldopen for legal intervention by otherparties. She also noted that the SGhadleft this to the competent authority totake a final decision. In her opinion, suchmatters could not be left to thediscretion of the competent authority,and the legal implications should beclearly indicated, before any decisioncould be taken.

The contract signed with SIS-Live left thepayment schedule at 30 per cent before theGames. However, this was amended inSeptember 2010 to 60 per cent before theGames.

Ultimately, the Oversight Committee'sintervention on the payment scheduledid not have any lasting effect.



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Documents

CAG's CWG Audit Report - Chapter - 28 (2011)