7 THE PUNJABI WEDDING: COMMONWEALTH GAMES 2010 Prithviraj Chavan who was then the Minister of State in the PMO, also initially alerted me that I should be careful about releasing funds for the Commonwealth Games. The present CEC, S.¥. Quraishi, who was my secretary in the sports ministry also shared my concerns against wasteful expenditure in the CWG."* —Mani Shankar Aiyar, former petroleum and natural gas minister ‘The CAG report is outdated—it is six to seven months old. —Sheila Dikshit, former chief minister of Delhi he government hosted the XIX Commonwealth Games (CWG) in New Delhi from 3-14 October 2010. It was a prestigious event, the largest-ever sporting activity in the country, with about 5,000 foreign athletes and 2,000 officials participating. The games. were conducted flawlessly. India got its highest-ever medal tally, of 101 medals—thirty-eight gold, twenty-seven silver and thirty-six bronze. ‘The organization of the games was a mammoth exercise involving coordination between nineteen different agencies, so as to ready the infrastructure needed to conduct the grand event. However, despite the In an interview to NDTY, 4 July 2011. Commenting on the study report of the CAG on its preparedness for the Commonwealth Games, 2010. See ‘CAG Report 6-7 Months Old: Dikshit on Games 2010; NDTV, 14 September 2009, in chttp://wwwndty.com/article/india/cag-report-6-7-months-old- dikshit-on-games-2010-8520>, accessed on 29 April 2014.2010 the PMO, also g funds for the who was my gainst wasteful al gas minister as ister of Delhi h Games (CWG) as a prestigious ye country, with ating. The games .edal tally, of 101 rty-six bronze. xercise involving as to ready the vever, despite the the Commonwealth aes 2010; NDTV, 14 ort-6-7-months-old- The Punjabi Wedding: Commonwealth Games 2010 + 121 fact that the contracts to host the games were signed in March 2003, there were a large number of reports as late as 2009 regarding tardy progress. While the agencies involved in the preparations attempted to dispel the fears, the voices of skepticism multiplied, and counter-claims were flying in the media and in Parliament. We were obviously reading these reports, which were appearing with disturbing regularity. I would share my concerns regarding these stories with my officers every other day, Apart from being auditors by profession, quite a few of us were keen sportspersons—so the successful hosting of the games was dear to us. One weekend, after the usual game of tennis, we got into a serious discussion regarding the tardy preparations. We thought it was our bounden duty to study the situation and advise the government with an objective report on the state of preparedness of the different agencies for conducting the games. We put together a very professional and capable team, led by K.R. Sriram, the principal director of audit. We were clear that this was not an audit under Article 151 of the Constitution, but merely a study designed to assist the government with an objective assessment of the stage of preparedness. This would provide practical and assistance to the administration, and help the government take remedial measures and effect mid-course corrections for those projects woefully behind schedule. Towards this objective, audit conducted the field work between March and May 2009, and brought out the report in July 2009, after holding the exit conference with various stakeholders that month itself. 1 would like to emphasize that the exit conference was in July and that the report was submitted in the same month; hence our findings were totally up-to-date in terms of the physical status of different projects. Rather than appreciating the useful inputs provided to them and identifying the high risk areas in terms of progress, the government became defensive and started picking holes in the report. While I could understand such statements emanating from officials trying to cover their inadequacies, I was really disappointed when the chief minister of Delhi echoed similar sentiments stridently, saying that our report was outdated and that the projects were, in fact, on track. I wondered why a public122+ Not Just an Accountant leader of her stature would jeopardize the reputation of her city, and the pride of the nation, merely to condone the sloppy work of some officials, It did not end there. As several agencies of the government were involved, the cabinet secretary designated different officers with the responsibility of replying to the deficiencies highlighted in the report. Little did they realize that we were not seeking responses to our observations. The entire exercise was to assist them in identifying the weak spots If they felt things were on track and we were off track, they could have ignored our study and moved on. While India and the rest of the Commonwealth saw one deadline disappear after another, and desperately waited for reassuring voices from the government, M.S. Gill, the sports minister at that time, made a most distressing statement. Organizing the games, he said, was like hosting a ‘Punjabi wedding'—things would be done at the last moment, but all would be done well. Describing the preparations for the games as jugaad, the minister, continued with the wedding analogy, saying that ‘you keep collecting ladoos [sweets] and flowers till midnight, but early morning you get the garlands and ladoos and hope the baraat [wedding party] is happy: The minister was living in a make-believe world, totally oblivious to ground realities, and worst of all, applauding one of the most regrettable aspects of our psyche—jugaad. We were shocked to hear him speak thus, and just to rejig my memory, I went back to our report. What did it say? ‘The Aquatic Complex, the completion date for which was October 2009, was only 42 per cent complete. The Siri Fort Sports Complex, again a competition venue, was to be completed by December 2009; yet at the time of filing the study report, it was only 46 per cent complete. The Yamuna Sports Complex for archery and table tennis, which had to be completed by December 2009, was only 7 per cent and 46 per cent complete for the respective games. This level of preparedness has to be compared with that of the city of London for the 2012 Olympics. London had achieved 74 per cent completion for the 2012 event in 2009. The idea guiding this was that at least two years ahead of the Olympics, different venues would be available See Rajdeep Sardesai, ‘Organising CWG is Like a Punjabi Wedding, IBNLive, 30 July 2010, redding/127870-5-23. in , accessed on 29 April 2014.her city, and the of some officials, overnment were officers with the the report. Little vur observations, the weak spots. they could have aw one deadline ring voices from ne, made a most was like hosting moment, but all games as jugaad, g that ‘you keep t early morning ‘edding party] is totally oblivious most regrettable him speak thus, What did it say? ch was October Complex, again rer 2009; yet at cent complete. is, which had to and 46 per cent that of the city ved 74 per cent this was that at ould be available ANLive, 30 July 2010, dding/127870-5-23. ‘The Punjabi Wedding: Commonwealth Games 2010 + 123, for training, familiarization and for the testing of facilities. How did we fare in comparison? We were hoping to have our spaces ready by the morning of 3 October 2010, the date of the inaugural ceremony, very much like a Punjabi barat. Professionalism? No. The government, from its highest echelons, was not just prescribing jugaad but applauding it too. ‘The organization of the games was no doubt a mammoth exercise. ‘There were seventeen venues to be readied and tested to Olympic standards. ‘Thirty-one agencies had a variety of roles and responsibilities; evidently, a well-knit coordinating arrangement had to be in place. Amongst the agencies were the Delhi Development Authority (DDA) headed by the lieutenant governor of Delhi, the state public works department (PWD) headed by the chief minister of Delhi, and the central public works department (CPWD) controlled by the ministry of urban development. ‘The ministry of sports was the nodal agency. The organizing committee, headed by Suresh Kalmadi, the chairperson, had the ultimate responsibility for conducting the games. While these elaborate arrangements looked tidy on paper, the main problem was that each institution was headed by a chief who zealously guarded his turf. There was no overarching body which could put all the pieces together. It is instructive to go back in history to understand the creation of the organizing committee and, indeed, the ‘birth’ of the XIX CWG in India. It was in May 2003 that the Indian Olympic Association (IOA) submitted a formal bid to the Commonwealth Games Federation (CGE). After the the Government of India, the lieutenant governor of Delhi, and chief minister of Delhi gave guarantees to underwrite any shortfall between revenue and expenditure in September 2003, the CGF voted to allot the XIX CWG to Delhi. The Host City Contract was signed in November 2003. The May 2003 bid document had detailed the nature of the organizing committee as a non-profit, government-owned and registered society; the executive board was to have a chairman, a government appointee, and the vice chairman would be the IOA president. Very categorical. Most mysteriously, in the course of the CAG's performance audit subsequent to the games being completed, the audit team discovered an ‘updated’ bid document which was datelined December 2003. No one124+ Not Just an Accountant could explain the source of this document, given that the bid had been made in May 2003 and the Host City Contract signed in November 2003, one month before this ‘updated’ bid document. There was no logic or relevance to an ‘updated’ bid document. Its irrelevance notwithstanding, the document was significant in that there was a marked difference in the nature and structure of the organizing committee from what appeared in the May 2003 document: while the original document described the organizing committee as being a government-owned registered society, the ‘updated’ document showed it as a non-government registered society, Moreover, whereas the former document had indicated that the chairman would be a government appointee, and the vice chairman would be the IOA president, the latter document omitted any references to the chairman necessarily being a government appointee or the vice chairman being the president of the IOA. No one took responsibility for this document. And yet it turned out to be the foundation for the final organizational structure—the most credible document, In fact, this document formed the basis of a letter that Suresh Kalmadi, president of IOA, wrote to the prime minister on 23 October 2004, stating that the then sports minister, the late Sunil Dutt, did not have the correct perspective on the role of the IOA in the games. He also observed that the games had been allotted to the IOA and, as such, the association was responsible for ensuring the successful conduct of the games. Extending this logic, Kalmadi went on to apprise the prime minister that the organizing committee had to be formed by the IOA and approved by the general assembly of the IOA. The prime minister chaired the first meeting of the GoM-—a core group constituted under the late Arjun Singh, the former human resource development minister, to coordinate the work related to the organization of the games—on 25 October 2004, The next day, Kalmadi wrote to the prime minister again suggesting that he (Kalmadi) should chair the organizing committee, and that the sports minister could chair the ‘steering committee’—a totally new creation Sunil Dutt wrote to the prime minister expressing surprise at Kalmadi’s ertions.” Even more interestingly, he expressed opposition to the ‘See ‘CWG Scam: M.S 4 July 2011, in pm-on-suresh-Kal Gill, Sunil Dutt Has Warned PM on Suresh Kalmadt; India Today, tp://indiatoday.intoday.in/story/ewg-scam-ms-gill-sunil-dutt-warned- adi/1/143659.html>, accessed on 30 April 2014 min this His draf wha prin that the con me was Kal Let nu su ad be ar de ««The Punjabi Wedding: Commonwealth Games 2010 » 125 re bid had been minutes of the GoM of 25 October 2004, asserting that the minutes of this GoM meeting did not fully reflect the trend of the discussions. November 2003, twas no logic or His assertion was found to be true since, as per government procedure, votwithstanding, draft minutes of the GoM minutes has to be submitted by the ministry; what came back from the cabinet secretariat after being approved by the prime minister was divergent. In December 2004, the PMO wrote to the ministry of sports stating that ‘institutional arrangements had been evolved for the conduct of the games and that Suresh Kalmadi should be the chair of the organizing committee and the executive board. This was endorsed by the GoM meeting of January 2005, On 10 February 2005, the organizing committee was registered under the Societies Registration Act of 1860, with Suresh Kalmadi as the chairman by name, and not as the president of the IOA. Suresh Kalmadi had arrived. ed difference in what appeared at described the istered society, gistered society. at the chairman n would be the to the chairman airman being this document, organizational wuresh Kalmadi, Let me explain the model of governance formulated to deliver the games. er 2004, stating ‘The organizing committee, the apex body, had 484 members (though this cena number was later reduced to 454), with Kalmadi heading it. Twenty-three eet ee sub-committees were carved out of the organizing committee to extend belatca ate advice in functional areas. There was another eighteen-member executive ens board ofthe organizing committee. This had only two government nominees, the organizing and Kalmadi chaired it. The day-to-day financial and administrative by the general meeting of the 3h, the former vork related to st day, Kalmadi Imadi) should er could chair decisions were taken by yet another body, the executive management committee, chaired by Kalmadi, which had as members Randhir Singh, Lalit Bhanot (secretary general) and A.K. Mattoo (treasurer). ‘The organizing committee thus became a parallel non-governmental entity with no accountability to the government or concomitant controls to ensure propriety and transparency, despite full funding from the “See ‘Performance Audit Report, CAG, in , accessed on 30 May 2014. seat Kalmadi’s »sition to the radi India Today, nil-dutt-warned-126 « Not Just an Accountant government. This, in fact, proved to be its undoing, as subsequent events revealed. It is strange that we did not refer to the institutional structures which had successfully delivered the Asian Games in 1982. The 1982 Asian Games had a special organizing committee, with a cabinet minister level person heading it (Buta Singh). This was not only the nodal coordinating body but also had overriding powers over other agencies to ensure a holistic approach. None of the glitches CWG 2010 went through seem to have affected the 1982 Asian Games. ‘The other case in point is the conduct of the Melbourne CWG 2006. A large Indian contingent—comprising, among others, officials of the central and state (Delhi) government and the IOA secretary—visited Melbourne to make an on-the-spot study of their governance structure. ‘The regional government of Victoria was made responsible for the overall supervision and conduct of CWG 2006 through a specifically formed cabinet sub-committee, drawn from key departments, and chaired by the prime minister. ‘There was a specially appointed minister for the CWG (Justin Madden), and he was responsible for administering the Commonwealth Games Arrangements Act 2001. Under the Act, he had wide-ranging powers for the planning and the delivery of the games infrastructure which included venues, project orders and crowd management. This clearly established the fact that the games were the sole responsibility of the government and a clear hierarchical and unitary structure was created for its management. It is rather surprising that the huge Indian contingent of 139 people who went to study this did not come back and report these facts to their parent departments. Most importantly, it was only to help the government in this regard that we took the initiative for the study report in July 2009. The purpose of the study was to give specific recommendations—considering the complexity and multiplicity of activities and the different claims and counter-claims of the participating departments, there was a need to rethink the entire governance model for the timely delivery of the games. ‘There was no attempt to criticize or find fault. The objective was to help the government in its endeavour to stage a world-class CWG which would do India and Indians all over the globe proud. On the first page of the report, it has been specifically mentioned: Des ped coll con exa can Eve toil stal act to me levbsequent events tructures which 82 Asian Games ter level person ordinating body nsure a holistic h seem to have ene CWG 2006. officials of the cretary—visited ance structure, e for the overall fically formed and chaired by iinister for the ‘ninistering the ar the Act, he Ielivery of the lers and crowd. james were the cal and unitary prising that the ly this did not rents. tin this regard 9. The purpose onsidering the :nt claims and was a need to y of the games. ive was to help G which would y mentioned: The Punjabi Wedding: Commonwealth Games 2010 © 127 We hope that the report, which has been prepared by us as independent auditors with an arm’-length approach from the implementing agencies, will serve as a checklist and a ready reckoner to benchmark further progress toward preparing the infrastructure and in staging the games [...] Much time has been lost and it is imperative to move forward with the new found sense of urgency tempered by the realization that crashing of timelines and bunching of decisions carry with it the heightened risk of compromising transparency, accountability and structural safety of the venues.” Despite such warnings, with twelve days to go for the games, a suspension pedestrian overbridge near Jawaharlal Nehru Stadium, the main venue, collapsed. ‘An intriguing event in the CWG saga was the appointment of a high level committee on 15 October 2010 (the games ended on 14 October 2010) to examine irregularities, if any, that had been committed by any agency. This came on the back of an atmosphere rife with allegations of wrongdoing. Every activity invited adverse notice. ‘The electronic media made a certain toilet in the Games Village—and the organizing committee’ Lalit Bhanot’s statement that the standards of hygiene in India are different —famous across the globe, to drive home the country’s unpreparedness. Possibly to downplay such allegations and to quell the groundswell on the very morrow of the closing ceremony of the games, the constitution of a high level committee, with its chairman having the status of Supreme Court judge, was announced by the government, to examine the ‘weaknesses in management, alleged misappropriation, irregularities, wasteful expenditure and wrongdoing in the conduct of the games” and recommend action. See CWG, in , accessed on 30 April 2014.128 + Not Just an Accountant The chair of the committee was a former CAG, V.K. Shunglu. This is rather strange because, on the one hand, the government was crying hoarse about the excesses of the three Cs—the CAG, the CVC and the CBI—and, on the other hand, it was getting a probe done obviously in addition to what the CAG would do—thus scoring a self-goal. I distinctly remember ringing up the cabinet secretary, KM. Chandrasekhar, to ascertain if what the papers were saying was indeed true, Chandrasekhar, at home due to a foot ailment, evinced no information. ‘The argument that the committee would deliver its findings earlier than the CAG audit also didn’t hold water, as the CAG audits had telescoped the timespan and were appearing rather fast. Any further collapsing of time would not be fair to the audited entities as they would not get a fair opportunity to respond to the queries against them. In fact, we did submit our report, all of its 743 pages, by about February 2011 But that is not the issue, ‘The cabinet secretary wrote to me on 23 April 2011, enclosing extracts of the recommendation of the chairman of the high level committee as sent to the prime minister, addressing the oversight mechanism for the games. The extract enclosed was pertaining to the CAG. One of the observations was: CAG by statute was obligated to audit the expenditure of the CWG. This expenditure was incurred by government entities, eg, CPWD, DDA, etc, and the OC [organizing committee]. CAG reports from 2004 to 2009 did not display significant material on the entities. Even though by that date all contracting had been completed, considerable expenditure had been incurred and a great deal of wrongdoing, which has now been elucidated, had taken place. CAG did not audit the OC even though he was obligated to do so by Section 14 of the Act, declined to do so in 2007 when the government following a Cabinet decision requested him to take up this work, and commenced audit at the end of 2008 under Section 21 which was inappropriate. It is another matter that the audit, commenced in November-December 2008, remained incomplete to this date. Clearly there has been a failure of audit.”* See Amitav Ranjan, ‘CAG Monocracy, Not Accountable, Shunglu tells PM; The Indian Express, 30 June 2011 So addc was a f commit to do s with th Iti inaccur and res a 743-p But ‘The to the | secretal ‘This wa of V.N partial by the the gov been p commi dabblin which CAG’ [c Also se Herald, | favour-mglu. This is rather ying hoarse about CBI—and, on the lition to what the ember ringing up f what the papers toa foot ailment, tee would deliver vater, as the CAG rather fast. Any -d entities as they + against them. In at February 2011. closing extracts vel committee as schanism for the AG. One of the of the CWG. » eg, CPWD, reports from entities. Even’ considerable doing, which rot audit the 4 of the Act, ng a Cabinet nenced audit copriate. It is or-December + has been a alls PM; The Indian The Punjabi Wedding: Commonwealth Games 2010 + 129 $0 added to all the politicians who were happily criticizing the CAG, here was a former CAG faulting his two successors; an executive appointed committee taking potshots at a constitutional body. Or was he meant to do so—hit at the credibility of the CAG who had, by then, come out with the 2G report? It is a different matter that the high level committee was factually inaccurate on the various audits of the organizing committee, the history and results of which incidentally have been covered on the first page of a 743-page report, in chapter three, “The Audit Approach. But that is still not the issue. ‘The enclosure of recommendations of the high level committee sent to the prime minister and forwarded for my comments by the cabinet secretary also had the following recommendation, inter alia. CAG organization is a monocracy no longer conducive to efficiency, outcome and accountability. A three member body would obtain greater transparency in its operations. One member should possess professional accounting qualifications, CA or its transnational equivalent. This should not seem to exclude an Indian Audits and Accounts Service officer from the triumvirate, who has wide exposure to finance, audit and accounts and best international practices in these areas. CAG accounts should be audited by a professional auditor appointed by the Public Accounts Committee. ‘This was a very interesting recommendation—just the thing that the likes of V, Narayanasamy, minister of state in the PMO, was reported to be partial to: ‘Making the CAG a multi-member body, as recommended by the VK. Shunglu Committee, is under the active consideration of the government. He even publicly stated that the recommendation had been presented to a committee of secretaries. What was a high level committee doing—constituted to report on the conduct of the CWG— dabbling with recommendations on the structure of the CAG, regarding which the Constitution (in Article 148) is very clear: ‘there shall be a CAG’ [emphasis mine]? And where did the question of the CAG’s accounts *4lso see ‘Ministers Favour Multi-member CAG to Ensure More Transparency, Deccan Herald, 14 November 2012, in , accessed on 30 April 2014.130+ Not Just an Accountant being audited arise from? We set about preparing our reply to the recommendation. One of the best features of the government is its remarkable capacity to retain, access and manage institutional memory—efficient even in the pre- digital era. Government files throw light on the deepest of mysteries, It was recalled that the national commission to review the working of the Constitution, popularly known as the ‘Justice Venkatachaliah commission’ had also made some references to such a suggestion in 2001. The CAG had examined the suggestion and given its response. This response was dug out to facilitate a seamless and consistent response. Our position was that, globally, there are different models of unitary or multi-member bodies of supreme audit institutions. While the professional qualifications of the member(s) of the multi-member audit bodies differ from agency to agency, the common thread running across multi-member bodies is that they are empowered with quasi- judicial powers of audit and adjudication. This is the provision prevalent in democracies with multi-member audit bodies such as France, Korea, Norway, Japan, Portugal and Spain. Commonwealth countries following the Westminster model of parliamentary democracy such a Canada, UK, Australia and New Zealand have single member audit bodies. The US Government Accountability Office is also single member. ‘They have the right to approach a court of law for enforcement of audit rights such as access to documents. We pointed out to the government that models such as the one in France sit as quasi-judicial bodies (cour des comptes) and, besides having the power to summon records or undertake physical verification, they are empowered to take punitive action, The audit office is assisted by a public prosecutor, advocate general and advocates who are also magistrates. Hence, the multi-member body, with a chief called the ‘premier president’ of the cour des comptes, has far-reaching powers, including the right to punish erring officials. This applies to Norway, Spain and Korea too. In fact, the auditor general of Austria, though having monocratic status, also has the power to take punitive action. In Japan, the supreme audit institution includes a board of audit, which is multi-member, with a chairman; they, too, have wide-ranging powers. ‘We thus left the decision to the government after apprising them of theendation. One of capacity to retain, 2ven in the pre- dest of mysteries. he working of the aliah commission’ 1 2001. The CAG ‘his response was erent models of stitutions. While multi-member 1 thread running ered with quasi- ovision prevalent as France, Korea, untries following ha Canada, UK, bodies. The US st. They have the lit rights such as ch as the one in 4, besides having fication, they are sisted by a public also magistrates. -emier president’ Jing the right to Sorea too. In fact, © status, also has audit institution chairman; they, ising them of the ‘The Punjabi Wedding: Commonwealth Games 2010 + 131 models prevalent in different global jurisdictions. If the government were to adopt a multi-member body, they had to bestow it with concomitant wide-ranging powers—powers that the present CAG does not possess. Jt was also pointed out that the CAG is presently assisted by a multi- member collegium of five deputy comptrollers and auditors general who are professionally qualified and rich in experience. ‘The government was also informed that, in September 2001—in response to the queries from the Justice Venkatachaliah commission— with the approval of the then CAG, V.K. Shunglu, a similar response was sent, Obviously it was decided to continue with the monocracy. How the situation, environment, government functioning and other parameters had changed, prompting a fresh recommendation, were not known. Even as Narayanasamy gave great publicity to the recommendation of the high level committee, early November 2012 brought forth a huge number of statements decrying the attempts of the government to dilute the CAG's powers. I did not enter the media space for any of these issues, but the moot point is that making the institution multi- member does not in any way dilute its powers. We have the classic example of the election commission, which was made multi-member post. ‘IN. Seshan, the tenth chief election commissioner of India. If politicians and political parties generally fear any agency, it is, in fact, only the election commission. Even today, issues such as new bank licenses, gas price hikes, or the appointment of a new chief of naval staff get referred to the election commission if an election is in the horizon. Hence, making the CAG's office multi-member and entrusting it with the concomitant powers that go with such a model would have given the institution the muscle that it woefully lacks today. However, seeing the groundswell of opinion from all corners, the government decided to recant the entire process. By 11 November 2012, Narayanasamy came out with the usual denial of being misquoted or quoted out of context by stating, ‘I did not say so [to make the CAG a multi- member body]. In fact, I was not specifically asked about CAG [...] There appears to have been an unsuccessful attempt to put words in my mouth.”* By December 2012, the government had done a complete one-eighty- see Nagendar Sharma, (CAG Setup Not to be Touched: Narayanasamy, Hindustan Times, 11 November 2012.132+ Not Just an Accountant degree turn. Replying to a question in Parliament on the appointment process of the CAG, the ministry of finance stated: There is no urgent concern about CAG being partisan or working in favour of the government or a particular political party. As [the] custodian of public purse, [the] CAG has played the role ofa vanguard in reporting on financial irregularities, irrespective of the government in power.”* Matters went a step further. To counter a possible perception in the Supreme Court on the independence of the information commission— of which, some members were recently-retired government officials— the attorney general stated, ‘We have a CAG who was a former finance secretary. Can it be said that he is loyal to the government?” ‘The issue of the structure of the CAG appeared to have been laid to Test. But what was the clinching factor accounting for the government's change of heart? The outcry against a perceived attempt at dilution? Not really, The dominating factor motivating their U-turn was the rather late realization that the Constitution (Article 148) stated: ‘There shall be 4 Comptroller and Auditor General of India’ [emphasis mine]. Hence making it multi-member would require a constitutional amendment, which in turn would require a two-third majority in Parliament. This would have been impossible for the government. This provision is distinct, quite unlike the provision for the election commission, for which Article 324(2) of the Constitution reads: ‘The Election Commission shall consist of the Chief Election Commissioner and such number of other Election Commissioners, if any, as the President may from time to time fix [...]” This realization was echoed by Narayanasamy when he stated that ‘any change in the CAG’s basic functioning would require an amendment to the Constitution, which was not even on the government’ agenda’ Well stated, Narayanasamy. At least the limitations were realized, albeit rather late. “See Saubhadra Chatterji ‘Finance Ministry Gives Clean Chit to CAG; Hindustan Times, 23 December 2012, See Soli Sorabjee, “The Big, Fat Indian Entertainment Show, The New Indian Express, 8 December 2012, See Nagendar Sharma, ‘CAG Setup Not to be Touched: Narayanasamy’, Hindustan Times, 11 November 2012. ace PA aud Sur tan jud exp inc tra bui cas sch to wit oth inte the refethe appointment .n or working varty, As [the] ofa vanguard e government erception in the om commission— ament officials— a former finance rent?” rave been laid to the government’ at dilution? Not ‘was the rather “There shall be is mine]. Hence nal amendment, Parliament. This vision is distinct, or which Article sion shall consist of other Election to time fix [...]" stated that ‘any an amendment ment’s agenda.”® 2 realized, albeit Hindustan Times, New Indian Express, ¥. Hindustan Times, The Punjabi Wedding: Commonwealth Games 2010 +133 As regards the suggestion by the high level committee to have the accounts of the CAG audited by a chartered accountant appointed by the PAC, the suggestion in itself was preposterous. The CAG is the supreme audit institution in the country. A direct analogy would be that of the Supreme Court, the highest court in the land. So the suggestion was tantamount to a lower court being appointed by Parliament to audit the judgements delivered by the Supreme Court. In any case, the department explained to the cabinet secretary that the only items of expenditure incurred by the CAG through the department's own budget were salary, travelling allowance and office expenditure. Budgetary devolutions towards buildings and construction lay within the CPWD's budget which, in any case, gets audited. The CAG does not deliver any other governmental scheme or project. Thus there is hardly any sizeable expenditure. Even so, Article 151 of the Constitution vests the power of audit in relation to accounts (including the accounts of the CAG and his department) with the CAG. Entrustment of the audit of the CAG’s accounts to any other authority would be ultra vires of a constitutional provision. This interpretation was upheld by the attorney general at the time of framing of the CAG’s (Duties, Powers and Conditions of Service) Act 1971, popularly referred to as the Audit Act. I was conscious that questions such as ‘who audits the auditors’ would arise. We were sensitive to this issue and, in any case, in the interest of transparency, it would be a healthy tradition to have our processes and. procedures audited by a peer agency. Since, the CAG is the supreme audit institution in the country, we decided to request any other equally competent supreme audit institution to audit or peer review us. We thus asked the auditors general of USA, UK, Austria and Australia if they could ‘audit’ us. In response to our request, the national audit office of ‘Australia agreed to lead an international peer review team of thirteen persons, comprising five of their auditors—two from Canada, two from Denmark, two from the Netherlands and two from the USA. This team spent about seven months on the job, and even visited some of our state- level offices, and gave its final report in October 2012. This report was uploaded on our website immediately. It is in the public domain, We have accepted and acted upon all the recommendations. I sincerely feel there cannot be any other paradigm of transparency or healthier practices.134. Not Just an Accountant I do not propose to dwell at any length on our findings while auditing the different projects of the CWG, as they are dealt with in detail in the 743-page report submitted to the government within six months of the completion of the games. However, the modus operandi was significant, in that it left much to be desired. Mismanagement and the flouting of governmental norms appeared to have been the norm. Let’s look through a few vignettes which are representative of the entire problem. + The IOA bid of May 2003 estimated an all-inclusive cost of 71,200 crore, As against this, the budget estimate in 2010 was %18,532 crore. And this excluded the Delhi Metro Rail Corporation (DMRC), the Delhi International Airport Limited (DIAL) and others. + The organizing committee consistently projected the games as revenue neutral, if not as revenue surplus. This argument was trotted out to justify the independence and financial autonomy of the organizing committee. It’s a different matter that the organizing committee's revenue projections were seriously flawed. In March 2007, the revenue projected was 8900 crore, and in July 2008 it was enhanced to %1,780 crore. There was no robust basis for this projection, other than possibly increasing the revenue projections so as to match the rapidly increasing operating expenditure—all in an effort to seemingly justify the financial autonomy of the organizing committee. The revenue actually realized was 2173.96 crore. + Sponsorship revenue had been projected at 2960 crore; 2375 crore was realized, and that too when two-thirds of this was contributed by the public sector enterprises following a government directive to them to take up sponsorship. + The organizing committee had projected £300 crore from donations/ raffle; the realization was 20.99 crore. + The organizing committee was responsible for tendering the catering services in the Games Village as well as the various sporting venues. The processing of the contracts meandered, taking over fourteen months. The chairman cancelled the first tender, a single bid, against the recommendation of his own officials. This was despite the single bid document being opened on the verbal instructions of ‘The Cé games | which urgenc; exempt became bids, ar compet protect ‘The ine objecti Ay anc cro the Bul pre an Ins while auditing 1 in detail in the x months of the was significant, | the flouting of 2t’s look through ‘oblem. € cost of 1,200 as 718,532 crore. m (DMRC), the ters. ames as revenue 1s trotted out to * the organizing ing committee's 007, the revenue vanced to €1,780 ‘on, other than tatch the rapidly eemingly justify xe, The revenue ‘ore; €375 crore was contributed ent directive to rom donations/ ing the catering porting venues. : over fourteen a single bid, his was despite instructions of The Punjabi Wedding: Commonwealth Games 2010 +135 the chairman. Re-tendering happened in June 2010. Transparency, quality and economy became casualties. + The preparation of the venues was similarly haphazard. Various projects, including the Shivaji Stadium, could not be completed on time. When completed, this stadium has an east-west orientation, as against the prescribed north-south orientation. Many projects lagged so far behind schedule that they had to be delinked from the staging of the games. The CAG's performance audit concluded that the organization of the games was negatively impacted by inexplicable delays in decision making, which put pressure on timelines, thereby creating artificial alarm and urgency and a misplaced sense of emergency. This obviously necessitated exemptions from laid-down governance processes. Contracting procedures became a casualty, Many contracts were entertained on single financial bids, and some even on a nomination basis. This led to an elimination of competition. Consequently, the economy of expenditure and all hopes of protecting the government's financial interests were thrown to the winds. ‘The inescapable conclusion would be that this was, in fact, the intended objective. An article in the Hindustan Times sums up the situation: A year later, and nine months after the Games, government auditors and financial investigators were staring at possibly thousands of crores of public money that went down the drain or vanished from the books of Kalmadi’s seat of power: the organizing committee. But in its final audit report of the Games—one of its most thorough probes—tabled in Parliament on Friday, the CAG said it had sounded an alarm about the Games long before anyone sniffed any foulplay. In a report submitted to the Centre in July 2009, the CAG had said, “There was a need to rethink the governance model for the Games Project? The study report, which is not really a financial audit like the present one, could not have been more explicit. But no one listened. That’ not all, Kalmadi and Co. had organized the Youth Commonwealth Games in Pune in 2008. In that too, the CAG had found unmistakable signs of fishy dealings. But again, everyone turned a blind eye. The 743-page report goes through every shred of evidence across 33 departments in the central and state governments136 + Not Just an Accountant in Delhi and Maharashtra. In the end it pulls no punches in naming the high and mighty at all levels—be it Delhi Chief Minister Sheila Dikshit or even PM Manmohan Singh—along with the now-jailed Suresh Kalmadi [...]”” The unfortunate tragedy is that despite the detailed and obvious highlighting of flaws, irregularities and certain obvious acts of mala fide, there didn't appear to be any credible attempt to establish accountability It will be a great travesty of justice if the big fish get away and only some lowly engineers and officers land up in the CBI net. There will be no deterrence. No demonstration effect. No learning from past mistakes. No good practice absorbed and no established model of governance which can deliver a similar event smoothly next time around. Unfortunately, the whole CWG project was premised on a bedrock of obfuscation, lies and misdirected representation designed primarily for personal projection and aggrandizement. From day one, it was the messenger who was being placed in the dock. From day one, the rogue elements were being propped up. What was the signal being sent? ‘The signal was that the malfeasant acts of a coterie would be allowed to go unchecked; the leadership would shut its eyes to the shenanigans and machinations of a few who had been entrusted the prestige of the nation Once this message emerged, the others also joined the party. Atul Mathur and Avishek G, Dastidar, ‘No One Heeded CAG's Warning Bells; Hindustan Times, 6 August 2011hes in naming Ainister Sheila he now-jailed led and obvious acts of mala fide, sh accountability. ay and only some There will be no n past mistakes, jovernance which ed on a bedrock signed primarily 7 one, it was the y one, the rogue being sent? The e allowed to go shenanigans and ige of the nation. party. ing Bells} Hindustan COAL THAT TURNED TO GOLD: MINE BLOCK ALLOTMENTS The view of the government has been that rational bidding is unlikely to increase the cost of coal when compared to notified price of CIL [Coal India Limited]. Through competitive bidding, prerogative in the selection of a lessee will be exercised in a more transparent and objective manner.” —Dasari Narayana Rao, former minister of state (coal), Lok Sabha, 28 November 2007 Coal allocation was a pro-people move because an auction would have sharply raised the prices of power, steel and cement.*! —Sriprakash Jaiswal, former coal minister ‘aking a statement in Parliament on 27 August 2012 on the M= block allocation issue, the prime minister said, ‘[The] ministry of power, too, felt that auctioning of coal could lead to enhanced cost of producing coal.* These flip flops in government are "See ‘Action of Coal Blocks, Press Information Bureau: Government of India, 28 November 2007, in , accessed on 2 May 2014. Rohini Singh and Himangshu Watts, ‘Coal Allocation Was Pro-People: Sriprakash Jaiswal, ‘The Economic Times, 20 June 2012, in , accessed on 2 May 2014. ““pMfs Statement in Parliament on the Performance Audit Report on Allocation of Coal Blocks and Augmentation of Coal Production, Speeches: Prime Minister of India, 27 August 2012, in , accessed on 2 May 2014.138 « Not Just an Accountant rather strange. Especially if we consider the following noting of the coal secretary on 29 July 2004, which was endorsed by the prime minister (as coal minister); he ordered that a system of bidding be introduced: [...] the present system of allocation in the changed scenario, even with the modifications, may not be able to achieve the objectives of transparency and objectivity [...] it is submitted that even after auctioning, the cost of production of coal from captive mine blocks is going to be considerably less than the price such a consumer of coal would have paid for CIL coal, and therefore the impact on the price of end product can only be downwards ie, the cost of production of steel, cement or power would be less when using captively mined coal than it would have been if CIL coal were used. Speaking at the Idea Exchange programme of the Express Group, the power minister, Veerappa Moily, said the guidelines would require companies in all segments—ultra-mega, captive and merchant—generating power to participate in bidding for selling electricity. The minister explained that his ministry has framed new bidding guidelines to prevent private firms with cheap captive coal mines from selling power at steep rates in the ‘open market and reaping windfall profits.“ ‘The present governor of the RBI, Raghuram Rajan, in a column said, ‘India’s corrupt elites have moved from controlling licenses to cornering newly valuable resources like land. The Resource Raj rose from the ashes of the Licence Raj.” Whom do we believe? All represent the government, Should not the government have a consistent viewpoint? And, if such inconsistencies were emerging from the government, what was the CAG’s folly in this entire saga? The decision to audit the ministry of coal? Or, the decision to make the audit report public by placing it in Parliament? See Sujay Mehdudia and Girija Shivakumar, ‘Bid to Deflect Focus from Wrongdoers: Ex-CAG Official, The Hindu, 17 October 2013, “See ‘Firms Must Bid to Sell Captive Coal Power: Moily, The Financial Express, 13 September 2012. “Raghuram Rajan, ‘What Happened to India?; Project Syndicate, 8 June 2012, in , accessed on 2 May 2014, eee eeCoal that Turned to Gold: Mine Block Allotments +139 noting of the coal 1e prime minister ; be introduced: ‘The production of coal assumed critical importance after 2003, when the government of India announced its mission of providing ‘power to all by 2012" To ensure that this declared objective was met, it was recognized that the private sector would need to be encouraged to invest in power projects. Consequently, it would be essential to provide them with assured fuel linkage for their plants. Coal is the most easily available domestic raw material for power generation, apart from being the most reliable source of energy. More than half the current commercial energy requirement is met by coal. However, according to planning commission estimates, the gap between demand and supply of indigenous coal had been widening and was expected to be more than seventy million metric tonnes in 2010-2011. With imports being expensive, private sector participation was encouraged in the coal mining sector to counter the perceived limitation of Coal India Limited (CIL) to enhance production to meet the requirements of the new power generating projects. So, how were we to give private operators access to these sources of coal given that under the Coal Mines (Nationalisation) Act, 1973, coal mining was the exclusive preserve of CIL? To fulfil the objective of giving access to coal blocks to private power producers, the Coal Mines (Nationalisation) Amendment Act, 1993, was passed in June 1993. This amendment allowed Indian companies engaged in the generation of power, in addition to the iron and steel producers, to engage in coal mining for their captive use. Till 1993, there were no specific criteria for the allocation of coal blocks. Allocations were being done based on letters of recommendation from the concerned state governments. From 1993, the allocation began to be done by the ministry of coal (MoC), based on the recommendations of the inter-ministerial screening committee, set up in July 1992, under the chairmanship of the secretary (coal). The committee also comprised officials from state governments and CIL. This committee was to scrutinize applications for captive mining and allocate coal blocks for development, scenario, even the objectives hat even after mine blocks is sumer of coal ston the price of production ptively mined Group, the power squire companies rerating power to er explained that ‘ent private firms teep rates in the na column said, ases to cornering e from the ashes Should not the 1 inconsistencies AGS folly in this by placing it in + from Wrongdoers: Financial Express, “Power for All by 2012, Ministry of Power, in , accessed on 2 May 2014. re 2012, in chttpy// sssed on 2 May 2014. vindian_140+ Not Just an Accountant subject to the statutes governing coal mining, following which the coal minister would approve the allotment. In view of the increased demand for coal in the tenth five-year plan, the growing number of applications for coal blocks, and the significant volatility in the international prices of coal, the government, in 2003, evolved a set of guidelines with the objective of ensuring transparency and consistency in allocation. The CAG conducts routine audits of government departments in rotation, Such an audit was proposed and undertaken for the MoC in 2011, In the course of this audit, in mid-2011, this procedure of allocation of coal blocks—that is, one based on the recommendation of the screening committee—came under scrutiny. The screening committee is expected to assess applications based on parameters such as the techno-economic feasibility of the end-use project, status of preparedness to set up the end-use project, past track record in executing projects, financial and technical capabilities of applicant companies and the recommendations of the concerned state governments and ministries.*” The committee was thus required to scrutinize each application and, then, depending on the merits and demerits of each competing application, take a decision to allot the coal mine block to the most deserving. Such criteria notwithstanding, the process that the committee actually followed was not really clear from the records. All that the records showed was that the committee met, deliberated and merely recorded the name of the block allotted to a company, and the state where the end-use plant existed. It is left to the teader to decide if transparency was a victim and, if so, how audit erred in pointing out this lacuna. As already mentioned, by 2004, the demand for coal had increased substantially, and there was a view that it would increase further. Hence, in July 2004, the then secretary of the department recorded that since there was a substantial difference between the price of coal supplied by CIL “Based on the Prime Minister’ Statement in Parliament on 27 August 2012,g which the coal xcreased demand +r of applications ernational prices idelines with the location. ents in rotation, » MoC in 2011. + of allocation of of the screening ittee is expected echno-economic 3s to set up the ts, financial and ‘commendations committee was epending on the decision to allot rotwithstanding, not really clear : the committee dlock allotted to |. Itis left to the how audit erred had increased rther. Hence, in that since there upplied by CIL st 2012, Coal that Turned to Gold: Mine Block Allotments «141 and coal produced through captive mining, there was ‘a windfall gain* accruing to the allottee of the captive mine. He went on to state that the then prevalent system of allocation by the screening committee was unable to achieve the aims of transparency and objectivity in the allocation process and that ‘there are pressures of all kinds. He recommended that there was a need to adopt a selection process which could be acceptable as demonstrably more transparent and objective. Stating that the auctioning of coal blocks through competitive bidding was a widely practised and acceptable selection process that promoted the causes of transparency and objectivity, he recommended a change in the system of allocation to one of competitive bidding. This note set the cat among the pigeons. Since so much has been said and written about the turn of events after this note, let us wade through history and observe the twists and turns in the course of policy change. The secretary's notes of 16 and 29 July 2004 found favour within the PMO. While the process of preparing a note for the cabinet was on, the secretary received a note from the PMO listing certain disadvantages of the recommended system. This note appeared to have been handed to the PMO by a person who was aware of the discussions to change the allotment procedure but himself did not favour it. Nevertheless, the listed disadvantages were really of no consequence and were easily countered by the department of coal in the draft note for submission to the cabinet. The secretary stated in the draft: ‘There is hardly any merit in the objections raised against the open bidding system [....] decision making through the Screening Committee is much more tedious and difficult as Screening Committee is subject to different kinds of pulls and pressure(s) and is unable to take a decision in one sitting. ‘This in itself is a damaging indictment by the very person who was presiding over the meetings of the committee and was seemingly bearing See Sujay Mehdudia, ‘Coal Secretary Warned of “Windfall Gains” in Captive Allotments in 2004; The Hindu, 28 March 2012.142 Not Just an Accountant the strain of the pulls and pressures. But then, changing the system was 1 clearly not going to be easy. On 4 October 2004, the minister of state for that, j coal, Dasari Narayana Rao, observed that any change in the procedure for recei\ the allocation of coal blocks would invite further delay in allocation. As it there was, the Coal Mines (Nationalisation) Amendment Bill, 2000, envisaging on th competitive bidding as a selection process for the allocation of blocks suital for commercial purposes, was pending in the Rajya Sabha with stiff appr opposition from trade unions and others. The minister also disagreed as th with the view that the screening committee could not ensure transparent} _ Howe decision making and added that this alone was not adequate ground 8 for switching over to a new mechanism. He went on to argue that no the d complaints had actually been received against that extant system, as also_ minis that all stakeholders were happy with it and, in fact, opposed any change, He recommended to the cabinet minister for coal that the proposal for change need not be pursued. This indeed was very ironic. The secretary was being overruled by the person okaying the minutes of the screening committee which apparently merely recorded the names of the companies being allocated the mine _ block—and he was convinced that this system was transparent. PC. Parakh, then the coal secretary, continued undeterred in his thinking that the extant procedure for coal mine block allotment would not stand scrutiny, and hence pursued the matter with the PMO. It is on record that he discussed the issue with the prime minister on 14 October 2004. At this meeting, it was felt that since a number of applicants had requested for allotment of blocks based on the existing allotment procedure, it would not be appropriate to change the allotment procedure through competitive bidding, especially when the applications had been received by the department on the basis of the existing policy. Parakh went on to state that since the concept of allotment through competitive bidding was first made public on 28 June 2004 at a stakeholder meeting taken by the department, it would only be fair to have a cut-off date for considering applications according to the existing procedure; the revised procedure would then commence for applications received after 28 June 2004, This indeed appears logical and fair. This proposal submitted by Parakh to the coal minister, who still happened to be the prime minister, met with the latter’s approval. ICoal that Turned to Gold: Mine Block Allotments +143 ‘The PMO finally communicated to the MoC on 1 November 2004 that, as decided by the prime minister on 14 October 2004, all applications received till 28 June 2004 would be considered by the extant policy and, thereafter, allotment of coal blocks for captive mining would be made on the basis of competitive bidding [Appendix 10]. This fact had to be suitably incorporated in the cabinet note proposed to be submitted for the approval of the council of ministers. ‘This decision of the prime minister as the coal minister should have set to rest all opinion on the issue. However, this was not to be. Soon, the regular coal minister, Shibu Soren, got back to his job. When the decision taken by the prime minister, albeit in his capacity as coal minister, was presented to Soren, he commented on 25 February 2005: ag the system was inister of state for the procedure for in allocation, As it , 2000, envisaging ocation of blocks Sabha with stiff er also disagreed ‘nsure transparent adequate ground to argue that no nt system, as also >osed any change, T have gone through the entire issue. As minister of coal, 1 am in : the proposal for complete agreement with the views expressed by minister of state, coal [Dasari Narayana Rao] in his note dated 4.10.2004 and as such soverculed by al the proposal need not be proceeded further. which apparently llocated the mine asparent. indeterred in his allotment would h the PMO. It is 2 minister on 14 ‘The minister was thus clearly overturning the decision taken by the prime minister and concurring with his minister of state for coal. Both seemed keen to continue with the extant procedure. It was, of course, purely fortuitous that Shibu Soren had to step down once again and that the prime minister held charge of the ministry of coal (yet again). The secretary, at that point, was still struggling to get the draft cabinet note, seeking nber of applicants change in the allocation procedures, approved. He sought approval of xisting allotment the note, clearly stating that the decision on all applications received by otment procedure 28 June 2004 (namely, the cut-off date approved by the prime minister earlier for allocation through the extant procedure) would have been taken by March 2005, and if the revised procedure was not put in place quickly, pressures would again mount on the government for continuing with the then prevalent procedure; this would not be desirable in the interest of ‘generating total transparency in the allocation of coal blocks. ‘The prime minister lent finality to the decision taken by him earlier and recorded his approval of the cabinet note seeking sanction of the competitive bidding system on 24 March 2005. ‘The tenacious Dasari Narayana Rao, however, had still not given up. He continued to put his weight behind the existing system. Even as late as cations had been ag policy. Parakh ough competitive keholder meeting a cut-off date for sdure; the revised ved after 28 June ‘sal submitted by € prime minister,