Watchdog Questions Commonwealth Games Deals

Two high-profile events in the Indian capital were held within 10 days of the uninspiring closing ceremony of the Commonwealth Games. The first was Prime Minister Manmohan Singh's meeting with Indian medal winners; the second, a thank-you dinner hosted by Cabinet Secretary K.M. Chandrasekhar, the country's highest-ranking bureaucrat. And on both occasions, Commonwealth Games Organizing Committee head Suresh Kalmadi found his name conspicuously absent from the list of invitees.

A member of Parliament from India's ruling Congress Party and chief of the Indian Olympic Association, the man who was in charge of the Games knew then that the hunt was on — not just for him, for the much criticized organization of the Games and allegedly presiding over corrupt deals, but also for many others who could be held responsible for sullying India's reputation by allegedly delaying the building of stadiums and using substandard construction material.

Considering the level of unpreparedness in the run-up to the Games, the massive event went off relatively smoothly. But within 24 hours of the closing ceremony, Singh had announced a probe headed by former Comptroller and Auditor General V.K. Shunglu. The rare, multiagency investigation involved the nation's top investigating agency, the Central Bureau of Investigation (CBI), the watchdog Central Vigilance Commission (CVC), the Income Tax Department, the Directorate of Enforcement and the office of the Comptroller and Auditor General (CAG).

The CVC was the first to warn the country in August that the infrastructure being built for the Games was in poor shape, chiefly because of "large-scale corruption, usage of substandard material and repeated delays." The agency released a damning internal report in July that put the total misappropriation in the most expensive Commonwealth Games ever held at somewhere between $1.1 billion and $1.8 billion.

"It's scary. You touch any file and you will find either prices have been jacked up or costlier materials have been unnecessarily imported or some particular company has been given a sweetheart deal," one of the investigating officials from CVC said on condition of anonymity. "Not a single deal is without the taint of corruption."

In its new report, the CVC found that payments were made by the Delhi Development Authority (DDA) to nonexistent parties; that there were intentional delays in executing contracts; and that there were overinflated prices, "bungling" equipment purchases and discrepancies in the purchase of air-conditioners, furniture and kitchen equipment for the Commonwealth Games Village by the DDA. The report also notes "various deviations" in the purchases for the megahousing projects inside the Village spread over an area of 156 acres (63 hectares). Even the state broadcaster Doordarshan is now under scrutiny by the CVC for a broadcast contract worth over $54 million for the Commonwealth Games with the U.K.-based company SIS Live. The deal is being investigated by the Income Tax Department for alleged tax evasion.

The October event, involving 71 nations, was the costliest Commonwealth Games in history, drastically overshooting its initial budget of $500 million. India spent at least $4.6 billion — nine times more than its December 2003 estimate — in upgrading stadiums, refurbishing roads and building power and water utilities. It spent another $2.7 billion on a new airport terminal to welcome participating athletes.

In a public-private partnership with the DDA, real estate major Emaar-MGF built over 1,000 apartments, dining and training facilities, and several temporary recreational rooms, including a bar, restaurant, bank and cybercafé in the Village for the 12-day sporting extravaganza. But last week, India's Urban Development Ministry ordered the confiscation from the DDA of the $41 million bank guarantee furnished by Emaar-MGF and directed legal action against the company.

Emaar-MGF immediately responded by blaming government agencies for the tangle. It released a letter written by its chief operating officer for projects on Sept. 3 — exactly a month before the Games started — to the DDA, alleging multiple agencies inside the Village had "created a mess." The workers used by the different government agencies were "apparently inexperienced and mostly rowdy elements who urinate in the clean bathrooms in the apartments thereby creating unhealthy and filthy conditions," the letter said. Emaar-MGF even accused these government-appointed workers of stealing bathroom fittings and electrical equipment.

The CBI, in a separate action, is also now looking into complaints regarding the alleged embezzlement of nearly $340,000 in the purchase of Hova courts for the badminton stadium, malpractice in the installation of kitchen equipment and the misappropriation of funds for electronic scoreboards and the remodeling and upgrading of two stadiums.

A preliminary probe by the office of the CAG has also found instances of collusion between government agencies and contractors, with the Central Public Works Department (CPWD) paying one contractor twice for the same work done at the Talkatora swimming pool complex, the main water-sports venue, at a price tag of over $90 million. The CAG's first set of "preliminary audit memos" on projects linked to the Games has put the spotlight on the CPWD, which works under the government's Urban Development Ministry.

Despite it all, Kalmadi, the Games' head organizer, seems unperturbed. "You must know that I have not taken any decision alone," he says. "There is an executive board of the organizing committee which takes all the decisions and in the executive committee there are two members from the central government," he told CNN-IBN in his only interview after the Games were over.

His right-hand man Lalit Bhanot, secretary-general of the Games' organizing committee, has already been summoned by the Directorate of Enforcement, which is studying possible violations of foreign-exchange laws by members of the organizing committee. When filthy bathrooms and apartments at the athletes' Village were caught on camera and became a national embarrassment just a few days before the Games began, Bhanot infamously commented that foreigners' standards of hygiene are different from those of Indians.

But with a multiagency investigation, it seems that the embarrassment might not be limited to the Games' leaders; high-profile ministers and bureaucrats are also under scrutiny. And that has the potential to cause more shame and discomfort for the ruling Congress Party.

Sumon K. Chakrabarti is the chief national correspondent for CNN-IBN.