Coming out in defence of its deal with UK-based SIS Live for telecast of the Commonwealth Games, Prasar Bharti on Monday said the selection of the company was made with the approval of Minister for Information and Broadcasting Ambika Soni.
Rejecting allegations of impropriety while finalising the contract or making payments to the company, Prasar Bharti CEO B S Lalli said whatever payment was made till date is according to the schedule which has been approved at the highest level -- that is the Information and Broadcasting Minister.
"The selection of the entity was made with the approval of the competent authority -- the Honourable Minister for Information and Broadcasting," he said at a joint-press conference with Doordarshan Director General Aruna Sharma.
Lalli said the contract amount had been finalized at approximately Rs 253 crore by the government in 2008.
"Based on the cost escalation and other factors I am happy to say that the final contract of Rs 246 crore made with SIS Live was well within limits."
Sharma added that a total of six companies had been shortlisted, out of which only two, Nimbus and SIS Live made bids.
As the Nimbus consortium broke up therefore only SIS Live was left and the contract was awarded to them, she said.
Asked whether a clause for sub-contracting had been provided in the final contract, Sharma said Prasar Bharti will look into the matter but added that a clause allowing for consortia was present in the document.
Lalli, however, added, "I did not know anything about sub-contracting."
Clarifying his position on the issue of alleged service tax and income tax evasion by SIS Live, he said that due payment of service tax is the legal responsibility of the entity and not of Prasar Bharti.
But, the company has intimated that they have paid the due tax in accordance with the regulations, he said.
Sharma said 60 per cent of the contract value has been paid so far to the company in accordance with the payment schedule. In addition to the 40 per cent payment yet to be made, there is a 10 per cent performance guarantee that has been furnished by SIS Live.
Lalli said the Income Tax department had written a letter to Prasar Bharti asking it to attach payment to the firm, but later asked it to cut Rs 29 crore tax from the payment.
The Prasar Bharti CEO said that whatever the I-T department has directed would be carried out in letter and spirit.
Questioned on reports that he had defied his finance wing while finalising the contract, Lalli said it is not true as the finance wing was only supposed to make suggestions and give advice, which was not binding.
"There were some issues in the contract at that point of time and we went to one of the senior-most law officers in the government and went by his advice," he said.
The duo also said that due to a delay in handing over of venues by the Organising Committee, SIS Live had threatened to walk out of the contract after paying a penalty saying that the project had become unviable for them.
"They also had apprehensions that they might be harassed once the Games are over," Sharma said.
However, she added that no clause in the contract had been changed to accommodate the company.