OC blamed for excess payment of Rs.1.44 crore

The inspection report of the Comptroller and Auditor-General of India (CAG) has criticised the Commonwealth Games Organising Committee (OC) for causing excess financial liability, to the tune of Rs.1.44 crore, through the renting of office space at the IOA Bhawan, owned by the Suresh Kalmadi-run Indian Olympic Association (IOA). Mr. Kalmadi is also the Commonwealth Games OC Chairman.

A Memorandum of Understanding, signed by the OC with the IOA, had agreed on payment of a monthly rent of Rs.20 lakh (at Rs.100 per sq.ft.) and monthly maintenance charge of Rs.5 lakh (at Rs. 25 per sq. ft.).

However, the OC's Executive Management Committee (EMC) at its March 2009 meeting reduced the area taken on rent from 20,000 s q. ft. to 6,750 sq. ft. The EMC, however, decided to enhance the rent for the reduced area from Rs.100 per sq. ft. to Rs.150 sq. ft inexplicably, causing the OC to shelve out an additional amount of Rs.74.85 lakh over a 21-month period between January 2008 and September 2009.

Despite reduction in the rented area, the OC continued to pay the maintenance charges for the initial rented area, thus failing to save an amount of Rs.69.65 lakh.

In its reply, the OC defended the loss of Rs.1.44 crore stating that the entire IOA Bhawan, except for a small portion, was occupied by it and that it paid maintenance charges of Rs.5 lakh per month instead of paying it on a square feet basis.

However, the report concluded that the OC's reply was not tenable as the area taken on rent had “reduced significantly by 13,250 sq. ft”.