New Delhi: A High Level Committee, which went into alleged financial irregularities in Commonwealth Games, has strongly indicted suspended Prasar Bharti CEO B S Lalli and Doordarshan Director General Aruna Sharma, accusing them of "collusion" with a UK-based firm which benefited Rs 135 crore in the broadcast deal. (Read the full report)
The two-member Committee headed by former Comptroller and Auditor General V K Shunglu has also recommended action against the two officials saying "they cannot be recused from the acts of omission and commission which facilitated this wrong doing".
The 236-page interim report of the HLC was submitted yesterday to the Government and Prime Minister Manmohan Singh has taken a "serious view" of the findings. He has sent it to the Cabinet Secretary and sought follow up steps within a week.
"Stern action is likely to be taken on the basis of the Cabinet Secretary's recommendations," a PMO statement said.
Lalli has already been suspended on a reference made to the President for his removal.
The Committee said that based on documents available it has concluded that the actual cost of the contract awarded to SIS LIVE was at best about Rs 111 crore, thus resulting in a profit of at least Rs 135 crore for SIS LIVE and Zoom Communications.
"The responsibility for providing undue benefit to SIS LIVE and Zoom Communications is primarily that of the then CEO, Prasar Bharti and Director General Doordarshan. They cannot be recused from the acts of omission and commission which facilitated this wrong doing," the report said.
The Committee found that the contract for production and coverage of CWG last year was awarded to SIS LIVE (partnership firm of SIS OB and SIS UK based firms) at a cost of Rs 246 crore on the basis of a single bid as the other nine responses were either rejected or entities backed out due to unduly restrictive and stringent conditions.
The contract was assigned by! SIS LIV E to Zoom Communications for Rs 177 crore on the same day on which the contract was signed between Prasar Bharti and SIS LIVE.
"This was in gross violation of tender conditions. SIS LIVE also issued a press release on March 8, 2010 announcing award of a key and exclusive contract for broadcast services, including technical equipment and diversified Production and Coverage services for the 2010 Commonwealth Games in India, to South East Asia's largest broadcast services company, Zoom Communications Ltd India," it said.
Thus, the Committee said, what appears to be the case is that SIS LIVE secured the contract for Rs 246 crore; assigned it to Zoom Communications for Rs 177 crore; provided no service and made a profit of the difference between the contracted price and the assigned price, i.e. Rs 69 crore.
Alternatively, Zoom Communications used SIS LIVE to secure the contract. "Given the complexity, it is idle to speculate which of this is true. Howsoever these transactions are viewed, government overpaid at least Rs 135 crore in a contract of Rs 246 crore," the report said.
The Committee pointed out that contracts were awarded by Prasar Bharti for various host broadcast activities without ensuring reasonableness of rates, overruling suggestions received.
Prasar Bharti received and supported highly inflated bids. Most of the decisions to support and award the inflated bids were taken by DG Doordarshan and the then CEO despite strong contrary view.
"The procedures and best practises in the selection of the service providers were ignored or bypassed to favour certain entities. Superfluous legal advice was obtained on matters requiring management decisions and this can only be viewed as an attempt to foreclose the option of decisions based on sound financial and management principles," the report said.
The Committee found that there were deliberate delays in following schedules endangering 'emergency' situations leaving virtually no option for re-tender or explo! ring oth er competitive avenues in the face of high rates quoted.
The Ministry was also presented with fait-accompli situations in view of the criticality of time and threat of no- broadcast of Commonwealth Games situation.
Acts of omission and commission including inter alia suppression of critical information necessary for informed decisions, undue favours to service providers, inappropriate changes in contractual terms and conditions and false / incorrect recording of the minutes of meetings etc. by key functionaries of Prasar Bharti such as CEO and DG (DD) were also observed.
The technical staff of Doordarshan had confirmed their capacity and readiness to cover the production of 10 out of 17 events in Commonwealth Games, Delhi 2010.
Coverage of the remaining 7 events and Opening and Closing ceremony, which required specialisation, was proposed to be outsourced. Despite initiation of preliminary work for covering 10 events in-house in the year 2007 with the assistance of an international consultant hired by OC, this decision was abandoned by Prasar Bharti without any recorded reasons.
"The High Level Committee is of the opinion that the decision to outsource entire work was motivated. This not only cost the exchequer avoidable higher expenditure but also deprived Doordarshan the opportunity to acquire the latest broadcasting skills and equipments for delivering in future events of similar scale," it said.
In the Commonwealth Youth Games, Pune, 2008, efforts were made to award contract for Host Broadcasting to SIS Outside Broadcast Ltd. UK which was declared as the only technically qualified bid out of 10 responses received in the year 2008.
The tender process was discharged as Central Vigilance Commission had found the eligibility criteria flawed and unduly restrictive.
The CWYG were covered in-house by Doordarshan at a cost of Rs 7.50 crore against the bid amount of Rs 42.30 crore of SIS Outside Broadcast. Irregular award of contract at a cost of Rs 1.6! crore t o Zoom Communications, Delhi for the hiring of broadcast equipment in CWYG, Pune 2008 was also adversely commented upon by Central Vigilance Commission.
Prasar Bharti did not heed the lessons of the CWYG, 2008 where it had glaring evidence of a highly inflated bid by SIS LIVE which was almost six times the actual in-house cost of production and coverage by Prasar Bharati.
It did not put in place systems to address the concerns voiced by the Central Vigilance Commission on the contracts for CWYG, 2008.
Prasar Bharati, the Host Broadcaster, could have chosen to assign all requirements to a single entity. Alternatively, it could have chosen to give part of the work to Doordarshan which possessed the capability to coordinate and broadcast ten of the seventeen games.
"These choices did not suit SIS LIVE / Zoom Communications because they neither possessed turnkey competence nor had any desire to be a junior partner of Doordarshan," it said.
A clear nexus between SIS LIVE, Zoom Communications and elements of Prasar Bharti management was apparent from the sequence of events, starting from CWYG, Pune 2008.
Prasar Bharti informed the Ministry and Oversight Committee (Meeting of 22nd October, 2009) that the bid for Production and Coverage of SIS LIVE ( Rs 246 crore) was 26 percent lower than the bid quoted for similar components and activities during Request for Information.
"This was a misleading, false and factually incorrect statement. Apart from the fact that the figure of 6.55 million GBP ( Rs 52 crore) quoted by BBC Outside Broadcasts for production and coverage of 12 events was never brought on record or discussed, the offer of USD 84.93 million ( Rs 336 crore) by HBS-IMG consortium was for 'turnkey' solution which included overall management, IBC, production, venue operations, other operational items and management fee.
"The amount quoted for Production and Coverage, as a line item, was only USD 43.18 million ( Rs 172 crore)," the report stated.
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The two-member Committee headed by former Comptroller and Auditor General V K Shunglu has also recommended action against the two officials saying "they cannot be recused from the acts of omission and commission which facilitated this wrong doing".
The 236-page interim report of the HLC was submitted yesterday to the Government and Prime Minister Manmohan Singh has taken a "serious view" of the findings. He has sent it to the Cabinet Secretary and sought follow up steps within a week.
"Stern action is likely to be taken on the basis of the Cabinet Secretary's recommendations," a PMO statement said.
Lalli has already been suspended on a reference made to the President for his removal.
The Committee said that based on documents available it has concluded that the actual cost of the contract awarded to SIS LIVE was at best about Rs 111 crore, thus resulting in a profit of at least Rs 135 crore for SIS LIVE and Zoom Communications.
"The responsibility for providing undue benefit to SIS LIVE and Zoom Communications is primarily that of the then CEO, Prasar Bharti and Director General Doordarshan. They cannot be recused from the acts of omission and commission which facilitated this wrong doing," the report said.
The Committee found that the contract for production and coverage of CWG last year was awarded to SIS LIVE (partnership firm of SIS OB and SIS UK based firms) at a cost of Rs 246 crore on the basis of a single bid as the other nine responses were either rejected or entities backed out due to unduly restrictive and stringent conditions.
The contract was assigned by! SIS LIV E to Zoom Communications for Rs 177 crore on the same day on which the contract was signed between Prasar Bharti and SIS LIVE.
"This was in gross violation of tender conditions. SIS LIVE also issued a press release on March 8, 2010 announcing award of a key and exclusive contract for broadcast services, including technical equipment and diversified Production and Coverage services for the 2010 Commonwealth Games in India, to South East Asia's largest broadcast services company, Zoom Communications Ltd India," it said.
Thus, the Committee said, what appears to be the case is that SIS LIVE secured the contract for Rs 246 crore; assigned it to Zoom Communications for Rs 177 crore; provided no service and made a profit of the difference between the contracted price and the assigned price, i.e. Rs 69 crore.
Alternatively, Zoom Communications used SIS LIVE to secure the contract. "Given the complexity, it is idle to speculate which of this is true. Howsoever these transactions are viewed, government overpaid at least Rs 135 crore in a contract of Rs 246 crore," the report said.
The Committee pointed out that contracts were awarded by Prasar Bharti for various host broadcast activities without ensuring reasonableness of rates, overruling suggestions received.
Prasar Bharti received and supported highly inflated bids. Most of the decisions to support and award the inflated bids were taken by DG Doordarshan and the then CEO despite strong contrary view.
"The procedures and best practises in the selection of the service providers were ignored or bypassed to favour certain entities. Superfluous legal advice was obtained on matters requiring management decisions and this can only be viewed as an attempt to foreclose the option of decisions based on sound financial and management principles," the report said.
The Committee found that there were deliberate delays in following schedules endangering 'emergency' situations leaving virtually no option for re-tender or explo! ring oth er competitive avenues in the face of high rates quoted.
The Ministry was also presented with fait-accompli situations in view of the criticality of time and threat of no- broadcast of Commonwealth Games situation.
Acts of omission and commission including inter alia suppression of critical information necessary for informed decisions, undue favours to service providers, inappropriate changes in contractual terms and conditions and false / incorrect recording of the minutes of meetings etc. by key functionaries of Prasar Bharti such as CEO and DG (DD) were also observed.
The technical staff of Doordarshan had confirmed their capacity and readiness to cover the production of 10 out of 17 events in Commonwealth Games, Delhi 2010.
Coverage of the remaining 7 events and Opening and Closing ceremony, which required specialisation, was proposed to be outsourced. Despite initiation of preliminary work for covering 10 events in-house in the year 2007 with the assistance of an international consultant hired by OC, this decision was abandoned by Prasar Bharti without any recorded reasons.
"The High Level Committee is of the opinion that the decision to outsource entire work was motivated. This not only cost the exchequer avoidable higher expenditure but also deprived Doordarshan the opportunity to acquire the latest broadcasting skills and equipments for delivering in future events of similar scale," it said.
In the Commonwealth Youth Games, Pune, 2008, efforts were made to award contract for Host Broadcasting to SIS Outside Broadcast Ltd. UK which was declared as the only technically qualified bid out of 10 responses received in the year 2008.
The tender process was discharged as Central Vigilance Commission had found the eligibility criteria flawed and unduly restrictive.
The CWYG were covered in-house by Doordarshan at a cost of Rs 7.50 crore against the bid amount of Rs 42.30 crore of SIS Outside Broadcast. Irregular award of contract at a cost of Rs 1.6! crore t o Zoom Communications, Delhi for the hiring of broadcast equipment in CWYG, Pune 2008 was also adversely commented upon by Central Vigilance Commission.
Prasar Bharti did not heed the lessons of the CWYG, 2008 where it had glaring evidence of a highly inflated bid by SIS LIVE which was almost six times the actual in-house cost of production and coverage by Prasar Bharati.
It did not put in place systems to address the concerns voiced by the Central Vigilance Commission on the contracts for CWYG, 2008.
Prasar Bharati, the Host Broadcaster, could have chosen to assign all requirements to a single entity. Alternatively, it could have chosen to give part of the work to Doordarshan which possessed the capability to coordinate and broadcast ten of the seventeen games.
"These choices did not suit SIS LIVE / Zoom Communications because they neither possessed turnkey competence nor had any desire to be a junior partner of Doordarshan," it said.
A clear nexus between SIS LIVE, Zoom Communications and elements of Prasar Bharti management was apparent from the sequence of events, starting from CWYG, Pune 2008.
Prasar Bharti informed the Ministry and Oversight Committee (Meeting of 22nd October, 2009) that the bid for Production and Coverage of SIS LIVE ( Rs 246 crore) was 26 percent lower than the bid quoted for similar components and activities during Request for Information.
"This was a misleading, false and factually incorrect statement. Apart from the fact that the figure of 6.55 million GBP ( Rs 52 crore) quoted by BBC Outside Broadcasts for production and coverage of 12 events was never brought on record or discussed, the offer of USD 84.93 million ( Rs 336 crore) by HBS-IMG consortium was for 'turnkey' solution which included overall management, IBC, production, venue operations, other operational items and management fee.
"The amount quoted for Production and Coverage, as a line item, was only USD 43.18 million ( Rs 172 crore)," the report stated.
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