The Comptroller and Auditor General has said that the process followed for awarding the telecom service contract for CWG 2010 was flawed. The auditor has blamed Mahanagar Telephone Nigam Ltd for buying equipment in a non-transparent manner which favoured the bid put in by HCL-Cisco.

“In our opinion, the bidding process was tailored to ensure that only the HCL/Cisco team's financial bid was available, thus eliminating financial competition,” the CAG said.

“The premise of the PSU following public financial accountability norms was jettisoned, as the technical requirements were altered without adequate justification by MTNL to leave only one technically qualified bidder, the HCL-Cisco team; there was thus no financial competition. Essentially MTNL acted as a conduit for placement of a contract, on a back-to-back basis, in a non-transparent manner,” the CAG said in its report released on Friday.

CAG found that on August 28, 2009 Airtel had approached the Organising Committee with a proposal to provide telecommunications services for CWG-2010 worth Rs 100 crore as the Lead Sponsor. This proposal was validated by the technology team of the OC. Mr Suresh Kalmadi, Mr A K Mattoo and Mr T.S. Darbari of the OC continued to engage with Airtel on the proposal till early January 2010, during which period Airtel's offer changed from provision of telecommunications services during CWG- 2010 worth Rs 100 crore as the lead sponsor to an offer of telecommunication services at a cost of Rs 160 crore (excluding taxes) offset by Rs 100 crore as sponsorship.

“We noticed that the OC chose not to bring this considerably better offer of Airtel to the notice of the Government anytime between August and October 2009. It is also not understood why Mr Kalmadi and his associates continued to interact with Airtel, even after GoI had taken the decision to engage MTNL on OC's recommendation and thereafter, MTNL was parallely engaged in selecting a contractor to provide these services,” the CAG report said.

The contract awarded by MTNL to HCL/Cisco for Rs 387 crore far exceeded the estimates and in the absence of financial competition there was no comparative check.

The contract envisaged telecom infrastructure to support bulk transmission of games data, security data, high definition broadcast signals.

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