Tuesday, July 13, 2010

Few sponsors for Commonwealth, PSUs told to cough up cash

It’s time for the public sector to come to the aid of the Organising Committee of the Commonwealth Games struggling to get sponsorships.

All public sector enterprises have been directed by the Union Heavy Industries and Public Enterprises Ministry to cough up funds ostensibly as part of corporate social responsibility (CSR).

In an order issued late last month, the Ministry — headed by ex-Maharashtra CM Vilas Rao Deshmukh — has said that since the Games are of “great national importance,” it would be appropriate for “our public sector undertakings to contribute their share so that the Games organisation and management scale new heights.”

The DPE note says that, as a “one-time measure,” it has been decided “that all contributions/donation/promotions/sponsorships etc. to the Commonwealth Games 2010, Delhi will be treated as a CSR activity and will count towards the awards of marks in the MOU evaluation process.” The note is signed by Secretary, Department of Public Enterprises, Bhaskar Chatterjee.

The note has been forwarded to all Maharatna and Navratna PSUs including ONGC, Indian Oil Corporation, NTPC, Oil and Natural Gas Corporation and SAIL.

“We are discussing sponsorship deals with PSUs as well as a lot of private firms. In ten days, we will be able to come up with more details about the deals,” said Organising Committee spokesperson Lalit Bhanot.

With just over 80 days left, the Organising Committee’s sponsorship kitty isn’t exactly overflowing. It has only Rs 342 crore from 10 sponsors, far below the target of Rs 1,200 crore.

Four sponsors, making up the bulk of the sponsorship value so far, are PSUs. Hero Honda and Coca Cola are two private sponsors with commitments of Rs 38 crore and Rs 15.7 crore respectively. PSUs NTPC, Air India and Central Bank have committed Rs 50 crore, Rs 50 crore and Rs 51 crore respectively. Indian Railways is the lead partner and will shell out Rs 100 crore.

With these PSUs lining up, Australian firm SMAM (Sports Marketing and Management) has every reason to cheer since it gets a 15-20% commission.

The agreement between SMAM and the OC was signed on July 25, 2007, making the company the “sole and exclusive negotiator and procurer of sponsorship for licensing contracts”.

The Indian Express had reported how organizing committee insiders raised questions over SMAM’s role in sponsorship deals. In an internal memo prepared by then ADG revenue V K Saxsena on February 12, “SMAM’s contribution in major deals signed so far has been practically nil even though they are entitled to the same commission from these deals as they are from deals which are negotiated by them.”

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