CNN-IBN, HT & NDTV involved in CWG Scam: CAG Audit Report

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The Common Wealth Games Audit Report Page. 200 & 201 mention in detail how a contract was awarded to HT-Hungama irregularly. Page. 221 of the report mentions how contracts were awarded to CNN-IBN & NDTV on ad hoc basis. Full CAG Audit Report: http://www.saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/union_audit/recent_reports/union_performance/2011_2012/Civil_%20Performance_Audits/Report_No_6_CWG/CWG%20English%20-%20Part-1.pdf
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  Chapter 12 - Technology     C   o   n    d   u   c   t   o    f   t    h   e    G   a   m   e   s  -    O   r   g   a   n    i   s    i   n   g    C   o   m   m    i   t   t   e   e    S   e   c   t   i   o   n   -   C nn Performance Guarantee - There was noprovision for performance security inthe contract, despite OCFC's instructionsin view of the unascertainable financialcondition of Gold Medal Systems. Increased Rates - A clause for paymentat increased rates for additional workwas added after EB's approval.qualification. A day before the final bidsubmission date, this criterion wasrelaxed on the grounds that no biddermight qualify on these criteria. We haveno evidence of this corrigendum beingpublished on the website/newspapers.Three bids from HT-Hungama, HCL Infosystems- NDTV Convergence and TCS-Sports interactive were received;interestingly, all three did not have suchexperience but were termed astechnically qualified under the relaxedcriteria;The documentation from Hungamaregarding its consortium with HindustanTimes was deficient, but was ignored bythe technical evaluation committee;Despite complaints that bids werereceived in loose sheets, unbound andunsealed, Hungama's bid was accepted;Although Hungama's commercial bidwas L-3 at Rs. 7.94 crore, it was declaredL-1 by taking into account a cashdiscount of Rs. 4.65 crore offered bythem. We cannot confirm whether theoffer of cash discount was actuallyreceived along with the bid. This L-1 bidwas reduced further to Rs.2.95 croreafter negotiations. nnn Performance Audit Report on XIX Commonwealth Games (CWG-2010) 20012.6.1Planning The Games Time website was effectively themain internet platform for CWG2010 todisseminate real time information onsporting events during the Games. Althoughthe Games Time Website is a standard andpredictable feature of all multi sportinternational events, this was not plannedor considered till June 2010, when, afterCGF criticism, the proposal for creating aGames Time Website was initiated. OC alsofailed to exploit the opportunity for revenuegeneration from the Official Games Timewebsite through advertisement revenuedue to deficient and delayed planning. 12.6.2Irregular Award of Contract toHT-Hungama nn The bidding process was squeezed andcompleted within two months, leading toseveral irregularities in the award of thecontract to HT-Hungama at Rs. 2.95 crore inAugust 2010:Global tendering was not followed andonly 10 days time was given forresponses;The RFP stipulated past experience ininternational multisport events as a pre- 12.6Official Games TimeWebsite The bids were not received in a sealedcover as is the stipulation. Thisevidently led to complaints. Further,audit has seen no proof of the cashdiscount reportedly offered by Hungamaactually accompany the bid to convert itinto L-1. There was relaxation in the RFPcriteria also. Such infirmities in theaward to Hungama lack transparencyand lead to the conclusion that theprocess was tweaked in their favour.  Performance Audit Report on XIX Commonwealth Games (CWG-2010) 201 Chapter 12 - Technology     C   o   n    d   u   c   t   o    f   t    h   e    G   a   m   e   s  -    O   r   g   a   n    i   s    i   n   g    C   o   m   m    i   t   t   e   e    S   e   c   t   i   o   n   -   C 12.6.3Performance of the Website While there were adverse media reports onthe performance of the website, quotingproblems of speed and non availability of real time information, the documentation atthe OC's end was sparse and unreliable.Even the CGF head, Shri Mike Fennel statedthat “there is certainly a big problem withthe Official Games Time Website”  .OC's vetting of the content hosted on thewebsite was also deficient, as the list of participating nations incorrectly includedKorea, Japan, Philippines and even the US.Even the archival CD/DVD of the fullyfunctional website, which was to beprovided by November 2010, had not beengiven by the vendor till March 2011.Despite these facts, OC failed to encash theperformance guarantee of Rs. 0.29 crore;there were no other contractual provisionsfor penalties in case of non performance. 12.7.1Appointment of TCIL onnomination basis Telecommunications Consultants IndiaLimited (TCIL), a Public Sector Undertaking,was appointed without any recorded justification as the turnkey implementationagency for telecom, IT and networkingprojects on nomination basis in October2009. This was approved ex-facto by the EBin January 2010.OC had a 139 strong technology team(excluding 4 consultants/advisors) sinceOctober 2009. Out of the 42 technologyrelated contracts worth Rs 247 crores, only12 contracts of Rs 92.17 crore wereawarded through TCIL on behalf of the OC;for which OC paid Rs. 18.66 crore to TCIL ascommission and tax. Considering that theTechnology functional area could handletechnical contracts like TSR and GMS on itsown, engaging the services of TCIL for 12routine contracts is grossly unjustified.Further, many other contracts e.g. of Wi-Fiservices, data cards, official website andIPTV were awarded by OC directly.Interestingly, TCIL was never consulted incontracts related to telecom or IT services.Further, the contract with TCIL was notimplemented in practice in turnkey mode.At different stages of the contract fromnegotiations to bid evaluation, contractswere sent to OC for approval.Also, it was noticed that TCIL's 'selective'advice was taken on other technical issuese.g. in the TSR contract at the pre biddingstage for declaring MSL, Spain ineligible. 9 OC had to provide audio video equipmentat all competition and non competitionvenues for media and internationalbroadcasters. The estimation of requirements was faulty, went throughrevisions, and resulted in over provisioning;the equipment was finally procured fromSamsung India for Rs 3.79 crore.The first round of tendering commencedwith the issue of the RFP in March 2010(without budgetary approval) and resultedin the issue of a purchase order for Rs. 5.20crore to MIRC Electronics (ONIDA) in June2010. This was cancelled as there were 12.7.2Supply of Audio Video Equipmentfor Venues 12.7Telecom, IT andnetworking projects 9 TV, TV mounts, DVD/CD, Data Projector (desktop),Digital Video Camera, Tripod for Digital Video Camera(Still), PA system etc.  Performance Audit Report on XIX Commonwealth Games (CWG-2010) 221 Chapter 14 - Games Branding     C   o   n    d   u   c   t   o    f   t    h   e    G   a   m   e   s  -    O   r   g   a   n    i   s    i   n   g    C   o   m   m    i   t   t   e   e    S   e   c   t   i   o   n   -   C (as it was anticipated that the CWGtickets would sell on their own); andAward of works on ad hoc basis toselected TV channels and media houses.Internal controls in the Functional Areawere very weak as there was noinstitutional memory and the files andrecords made available to audit wereincomplete. n 14.3.3Execution of Games LookProvider Contract Although the works were awarded for Rs25.94 crores, after further physicalverification, the scope of work was reducedto Rs 20.33 crores; finally, the workexecuted by the vendors was limited to onlyRs 14.45 crores. This decrease was largelydue to OC's failure in ensuring timelyaccreditation and permissions, coupled withlimitation of time available for execution. 14.4.1Overview nnn Although the Communication functionalarea was operating since 2007, its operationplan was prepared only in April 2009,revised twice, and finalised in March 2010.The functional area was required to createawareness about the Games; promoteticketing, merchandising and sponsorshipfor the Games; and create Games time buildup to support spectator services.These objectives could not be achieved dueto:Bad planning;Reduction of the budget from the initialamount of Rs. 82.02 crore to Rs.68.34crore to Rs.38.34 crore in June 2010.This forced curtailment of advertisement campaigns for the QBRdomestic leg;, ticket marketing; testevents; Pre Games, Games and PostGames advertisements; internetcampaign and direct media relations;Initial reluctance on the part of seniormanagement of OC for marketing efforts 14.4.2Award of contract on ad hoc basisto selected TV channels OC awarded contracts for Rs. 3.78 crore forproduction and broadcasting of commercials for promoting of CWG-2010 toCNN-IBN and NDTV. An arbitrary approachwas followed, with no planning for specificchannels and time slots, cost benefitanalysis, benchmarking of rates andtenders. Proposals were considered, in anad hoc manner, as and when a proposal wasreceived; no form of competitive tenderingwas adopted. We had no assurance aboutthe competitiveness of the rates quoted bythese channels and the need and usefulnessof the proposals.From March 2010 to June 2010, the entirepre games publicity and sponsorshippublicity was done only on NDTV and CNN-IBN.Further, although OC had rights to telecastcommercials produced by these channels(particularly for celebrity films, specialepisodes on development of games) itnever used these commercials. Instead, itseparately spent Rs.0.81 crore on theproduction of films during Games time. 14.4CommunicationsFunctional Area
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