The Shunglu Committee has faulted the sacked chief of Commonwealth Games organising body Suresh Kalmadi and his aides over award of contracts saying there was "extreme concentration of powers at the top" and "conflict of interest" among the organising committee officials.
The two-member high level committee, headed by former Comptroller and Auditor General V K Shunglu, in its fresh report, also upbraided several government agencies for causing losses of over Rs 1,600 crore in executing projects.
The HLC, which went into the complaints of alleged corruption and irregularities in the conduct of sporting extravaganza, said the OC had serious governance problems because of an unwieldy general body with 500 members and a "subservient" executive board.
"The OC was synonymous with the chairman. Extreme concentration of power at the top ensured that decision making remained concentrated in the hands of the Chairman and his coterie of loyal senior management.
"Extreme conflict of interest was inherent in key officials of the Indian Olympic Association holding senior position in OC," the report said questioning the decision making procedures adopted by Kalmadi. The Committee found that the tone at the top (of the OC) created a situation where wrong doing was common and best practices were not encouraged.
"Accountability, internal and external was not the norm. The Executive Board hardly exercised its governance role and often delegated responsibility to the executive management committee to the point of abdication of responsibility.
Consequently all key decisions were taken by handful of powerful loyalists of the Chairman (Kalmadi)," the committee said. It found that recruitment of key positions in the secretariat and the senior leadership positions was not based on merit and most of them had no games time experience.
Any dissent was not tolerated. "Many senior positions were filled up with persons of questionable integrity and past records of vigilance cases. Government instructions were flouted in posting of staff in sensitive positions," it said.
The panel questioned "coterie style" of management in the OC which created extreme disharmony and dysfunction and often the interpersonal feud would spill over to affect the smooth operations and monitoring of the progress of work.
"There was no effective vigilance and internal audit to provide watch dog function and promote compliance of propriety and ethical norms or efficiency," the HLC said.
The Committee has found irregularities and revenue losses in executing contracts related to ticketing, sponsorship, overlays, timing, scoring and results, catering and recruitments. Calling the award of three contracts to Event Knowledge Services, a consultancy firm, for venue development as "dubious", the committee recommended a probe by the Central Bureau of Investigation and the Enforcement Directorate to trace the flow of funds from OC to the company in Mauritius.
"This is a fit case for reference to the CBI and the ED. They would have to investigate the ownership of EKS Private Limited, Mauritius and trace the flow of funds from the OC to EKS private limited and onwards to other recipients.
"The aspects of fraud involved in this case would also need to be investigated and suitable criminal action taken against the guilty," it said. In the other report on games venues, the Shunglu Committee has found Rs 800 crore as cost of delay in completing construction of all the sites.
It said there was financial oversight by civic and construction agencies which resulted in undue gain of over Rs 250 crore to contractors. The HLC found that there was an estimated Rs 574 crore of "wasteful expenditure" on certain types of assets.
The Committee found evidence of criminal misconduct and managerial lapses on part of higher functionaries including Chairman of New Delhi Municipal Council, director general of Central Public Works Departments, senior officials of Delhi Development Authority and Engineers India Limited.
"The responsibility for the irregularities that have been noticed, which range from administrative misdemeanours to criminal misconduct, will have to be borne by the senior officers of the concerned agencies. The malaise runs deep and cannot be dismissed as a 'one-off aberration for which relatively junior functionaries alone can be held responsible.
"The role of the NDMC chairman; the then vice chancellor of Delhi University; chief finance officer of Delhi University; director general, CPWD; project manager (CWG), CPWD; senior officers of DDA and EIL has come in for particular notice.
Their acts of omission and commission facilitated undue gains to contractors, led to wasteful expenditure and contributed to overall loss to the Government," the report said. The HLC has already submitted its reports on host broadcasting deal by Prasar Bharti, construction of Commonwealth Games Village and on City infrastructure related projects to the Prime Minister's Office.
In its first report submitted on January 31 the committee recommended strict action against suspended chief executive officer of Prasar Bharti B S Lalli and former Director General (Doordarshan) Aruna Sharma under relevant Sections of Indian Penal Code and Prevention of Corruption Act for their alleged act of omission and commission.
Whereas in its second and third report, it named Delhi Lt Governor Tejinder Khanna and Chief Minister Sheila Dikshit respectively for their alleged inadequacies.