Irregularities in IOA Bhawan renovation: CAG report

Commonwealth Games Organising Committee chairman Suresh Kalmadi, who is also the Indian Olympic Association (IOA) president, finds himself in the dock yet again after an inspection report of the Comptroller and Auditor-General of India (CAG) revealed that an avoidable expenditure of Rs.4.11 crore was incurred by the OC for renovation of the IOA Bhawan here.

The report also questioned the payment of rent and maintenance charges by the OC to the IOA, amounting to Rs.1.44 crore for use of the IOA Bhawan for a 21-month period between January 2008 and September 2009.

The audit scrutiny also revealed that the OC used its budget to undertake renovation work of the entire 20,000 sq.ft. of the IOA Bhawan, although it actually acquired only 6,750 sq. ft. (33 per cent) of the total space.

It then paid out Rs.4.11 crore, which was in excess of the sanctioned work order of Rs.2.89 crore. However, the irony of the entire exercise was that by the time the renovation was completed, the OC had shifted its offices to the New Delhi City Centre (NDCC) building or the Palika Kendra.

In March 2006, the OC decided to hire additional space at the IOA Bhawan as its premises at the Jawaharlal Nehru Stadium were inadequate. Violating its own guidelines, which stipulates an advertised tender inquiry process for contracts above Rs.25 lakh, the audit observed that the OC issued a limited tender to 11 companies.

Two firms, M/s Renaissance Furniture Pvt. Ltd. and M/s Salwan Furnishing Company responded to the tender for interior work and furnishing of the IOA Bhawan which, however, did not mention the estimated cost.

The two bids were evaluated and work was awarded to Renaissance at a total cost of Rs.2.99 crore in November 2007, with March 15, 2008, as the due date for completion.

It was also found that the work was completed only in November 2009, a delay of 20 months. The report said that the OC violated its own guidelines for imposition of liquidated damages for default on the part of the contractor by not incorporating such a clause in the contract with Renaissance, thus being unable to penalise it for the delay.

In November 2007, while the tendering process for the IOA Bhawan work was progressing, the New Delhi Municipal Council (NDMC) agreed to provide 1.7 lakh sq.ft. to the OC in the NDCC building. In May 2008, the OC paid advance rent of Rs.9.24 crore to the NDMC, and in September 2008 it started shifting furniture from the IOA Bhawan to the NDCC.

It is in this light that the inspection report states that the renovation of IOA Bhawan at a cost of Rs.4.11 crore was avoidable.

Verbal approval

Against the work order of Rs.2.89 crore, the contracted firm charged Rs.5.28 crore, following which a committee formed by the OC to inquire into the claim found the scope of the awarded work was exceeded on the “verbal approval of senior functionaries of the OC.”

It was also observed that most of the furniture was purchased in March 2009, after the OC had shifted to the NDCC building.