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Auditors Blast Government for Commonwealth Games Corruption

India’s World Class Heist

by MITU SENGUPTA

A lot happened in India over the weekend. On August 5th, the Comptroller and Auditor General of India released its final report on the 2010 Commonwealth Games, placing it before the parliament.

No-one expected good news. The games, which were held in Delhi last October, have been under a cloud of corruption and mismanagement since last summer, when it was feared that preparations for the event would not be completed on time. The head of the organizing committee, Suresh Kalmadi, is already in jail on charges of racketeering (Kalmadi has claimed he is suffering from memory loss).

But the bad news is worse than the possibility of Kalmadi’s impending dementia. The Auditor General’s 744-page report suggests that nothing short of daylight robbery has occurred. Slamming the organizing committee for being “deeply flawed, riddled with favouritism and bias,” it unleashes a torrent of ugly details.

The games cost a staggering $4.1 billion instead of the $270 million initially estimated. The revenue that was supposed to pay for the event amounted to a measly $38 million.

Extravagant contracts – from toilets and shuttlecocks to broadcasting rights and the Games Village – were awarded on the basis of a single bid.

The cost of ‘beautifying’ some of the poshest areas of New Delhi was $22.5 million (imported luminaries were used to improve street lighting rather than the cheaper domestic variety, adding $7.7 million to the bill).

The delays in construction tht kept the country on tenterhooks until the very last moment were most likely deliberate: according to Rekha Gupta, the Deputy Auditor General, “the argument of urgency was used to obviate the regular process of tendering for award of contracts.”

The ghastly list rattles on, imlicating the Prime Minister’s Office and the Delhi state government’s Chief Minister in the process. Resignations and criminal prosecutions are anticipated (the Prime Minister and Chief Minister are trying to absolve themselves with the argument that they cannot be expected to “micromanage every decision.”)

Red flags, trumped by national flag

The Auditor General has given Indians good reason to be angry – and judging by the news coverage over the weekend, there’s plenty of moral outrage to go around.

Yet no-one should be shocked by India’s big heist. Given the opaque decision-making and suppression of voice that marked the foundational fabric of the Commonwealth Games, massive corruption was all but an expected outcome.

In May 2010, a seminal study by a Delhi-based NGO, the Human Rights Law Network, revealed that India’s bid for the event was never discussed in Parliament. Nor was there any public debate or opinion poll among Delhi’s residents as to whether the event should be held in their city (even so, the bid document claimed that “the entire nation supports the cause of the Games”). In fact, the government’s decision to bid for the Games was approved by the cabinet only in September 2003 – barely two months prior to the official announcement that Delhi had been chosen as the host city for 2010.

The Commonwealth Games were meant to affirm India’s ‘world class’ status and seal its reputation as a rising superpower (the bid document is littered with references to such goals, as were the lavish opening and closing ceremonies for the event). The executive’s unilateral decision to host the games was so easily accepted because it played to the hubris of India’s newly rich. It spoke to the ambitions of a relatively narrow segment of the population that has prospered disproportionately under India’s regime of neoliberal policy reforms, initiated twenty years ago. This ‘rising middle class’ – estimates of its size range from 50 to 300 million people – is the force behind India’s towering skyscrapers, luxury shopping malls and pristine gated communities. It is also a major political force.

The political party on whose watch the bid was made – the Hindu nationalist Bharatiya Janata Party (BJP) – is widely seen as representing the interests and collective aspirations of this class (one may recall its campaign jingle, ‘India Is Shining!’). In 2003, the Commonwealth Games bid committee was reportedly awarded a ‘blank cheque’ by BJP Prime Minister, Atal Behari Vajpayee, who was eager to secure the games in the run-up to the 2004 national election. But the bid was also supported by the Congress party, which led the United Progressive Alliance (UPA) coalition to victory in 2004 on the claim that it (unlike the BJP) represented the concerns of the poor and marginalized. Glowing letters of endorsement were provided by two Congress stalwarts, the Chief Minister of Delhi, Sheila Dixit, and the leader of the opposition, Sonia Gandhi.

Indeed, as the Auditor’s report renders clear, it is the Congress that ultimately bears the most responsibility for the flawed planning and execution of the event. It readily trumpeted the BJP’s slogan of ‘becoming world class’ once its seductive appeal was recognized. The Congress political elite granted total discretion over spending to Suresh Kalmadi and the impenetrable maze of committees and sub-committees that reported only to him (31 decision-making bodies, 22 advisory panels and 16 implementing agencies reported to Kalmadi’s organizing committee, over which he maintained absolute authority). With India’s global prestige and national pride at stake, moreover, the usually clamorous (corporate-owned) media looked the other way.

In the seven years between the bid for the event and its execution, human rights advocates, students groups and independent activists raised a series of red flags. Most went utterly unheeded.

The government’s plan to build a massive ‘Games Village’ on the floodplains of the river Yamuna drew a gush of criticism when it was first announced. Environmental groups and social activists pointed out that the land targeted for the Village is ecologically fragile, and that the project would lead to the eviction of hundreds of low-income families from squatter settlements in the area.

In November 2008 – several years after the initial concerns had surfaced – a group of social activists succeeded in getting the Delhi High Court to freeze construction on the Games Village. The court also ordered an environmental panel to investigate its ecological impact. In response, however, the government appealed to the Supreme Court, arguing that the High Court’s ruling would “seriously jeopardize the very conduct and holding of the 2010 games in Delhi.” Swift to act, the Supreme Court overturned the Delhi High Court’s verdict, arguing that the government had met all the approvals it needed. This important decision was only lazily reported in the press, and outside activist circles, provoked little concern. In light of this, the Auditor General’s discovery that the Delhi Development Authority (DDA) failed to comply with the Ministry of Environment’s conditional clearance for building the Village is hardly surprising.

Questions were also raised by social activists and student groups about how public money was being used to turn the Games Village into an exclusive, gated community for the rich.

Built on a giant public-private-partnership agreement between the DDA and Emaar MGF – a real estate giant experienced in executing luxury, master-planned townships – the projected cost of the village was a whopping $230 million (unsurprisingly, the Auditor General found “serious irregularities” in the awarding of the contract to Emaar). According to the deal, the DDA would own one-third of the 1,168 apartments, while Emaar would retain two-thirds, for sale in the open market.

While bidding for the Games, the Indian government said that DDA’s share would be used to house Delhi University students, thus partially compensating for the dearth of student residences in the city. As construction proceeded, however, it was evident that DDA-Emaar had other plans.

The Village was to be equipped with state-of-the-art security, an upscale shopping mall, ‘bio-toilets’ at $10,000 per unit, a water treatment plant (currently lying unused) for $6 million, a ‘green’ power grid for $8 million, noise barriers (later found defective) for $1 million, and a dedicated corridor of Delhi Metro connecting it to the airport. As the upscale residential complex took shape, members of legislative assembly (MLAs) with the Delhi state government demanded its units at discounted rates. At present, well-appointed apartments in this “self-contained premium residential community” (as one real estate ad touts the property) are selling for $1 million and beyond. It is quite clear that providing housing to university students was never a genuine concern for the government.

Another major warning sign emerged when Emaar failed to hold up its end of the deal. In May 2009, the DDA announced a $150 million bailout package for Emaar, which was defended by the Minister for Urban Development, Jaipal Reddy, as a “buy-back arrangement by the DDA to enable the developer to complete the Games Village.” Reddy said the Village was central to conduct of the games, and that any delay would have meant cancelling or postponing the event. Since these options were simply not on the table, the government offered no apology for its decision to use public funds to prevent a real estate leviathan from violating the terms of its contract, and for making Indian taxpayers foot the bill for converting public green space into heavily guarded private property. Beyond a few initial questions, however – and this is the most tragic – no apology was demanded. The games were the price of being ‘world class,’ and people were willing to pay.

The Auditor General’s report suggests that the bid and organizing committees, the DDA, and indeed anyone else who asked, was given the proverbial carte blanche. The budget for the games was revised upwards at least 10 times between 2003 and 2010. Each time, the cabinet nodded through its approval. In this context, it is hardly surprising that the event cost 16 times more than the original estimate. Under the circumstances, sticking to the budget would have been the least rational option. It would have been far more unusual had no money had gone missing.

The organizers of the games must have felt invincible. Few questions were raised when Delhi was turned into a quasi military zone in the weeks before the event. The elaborate and intrusive security plan, known months in advance, included the construction of a 14-foot fence, helicopter surveillance, a fleet of armoured cars for Delhi Police, the installation of CCTV cameras in strategic points of the city, and the deployment of tens of thousands of police, paramilitary troops, elite commandos, snipers and bomb-disposal units.

There was no public uproar when ‘anti-begging’ police squads rounded up destitute and homeless persons and ‘relocated’ them to the peripheries of the city, or when Jantar Mantar – one of the few spaces in Delhi where protest is legally permitted – was cleared of overnight demonstrators by Delhi Police because the space needed to be spruced up for tourists.

Ultimately, the Commonwealth Games bespeak a larger truth: if you peddle the dream of a ‘world class’ India, you can get away with almost anything. This is as true of the games as it is of the country’s special economic zones (SEZs), the tax free and unregulated industrial areas that are meant to boost India’s exports and propel the country into a new (‘world class’) orbit of growth.

The development of SEZs has been a highly corrupt process, with state officials colluding with private developers to evade fair compensation and exploit legal loopholes. Abuse of the principle of ‘eminent domain’ is widespread as is intimidation of small landowners and tenant farmers by the police. All of this was known when the government passed legislation to facilitate the creation of SEZs. Yet the SEZ Act (2005)was passed relatively quickly and with minimal debate, especially when compared to the repeated delays, expressions of outrage and watering down that besieged the enactment of the National Rural Employment Guarantee Act (NREGA) and other measures of social security for the poor. Indeed, the pedantic concern that India has ‘finite resources that cannot be wasted’ is repeated with great gusto when it comes to making policies that may benefit of the poor. The same government that poured $4 billion into a fourteen-day sporting event spends a little more than 1 percent of its GDP on health, and a little more than 2 percent on education.

The Great Corruption Debate

The Auditor General’s report on the Commonwealth Games is a testament to the depth of India’s crisis of corruption, ad to the sort of big money that’s up for grabs its fast-growing, post-liberalization economy.

At present, the favoured interventions are the creation of an Ombudsman’s Office (Lokpal) and the strengthening of bodies such as the Central Vigilance Commission (CVC) and the office of the Auditor General. While watchdog organizations are a good idea, a lot depends on who is at the helm, and how far he or she is willing to go in pursuing a particular complaint(fortunately, the current Auditor General, Vinod Rai, has turned out to be a courageous man). Watchdogs also tend to focus on the apolitical goal of correcting individual behaviour, when the problem is systemic and political.

A better, more bottom-up approach is that of the Right to Information (RTI) Act, which entitles ordinary citizens to any information they want about government decisions and spending (the study by the Human Rights and Law Network, cited earlier in the article, was based on a series of RTI petitions). Nonetheless, the RTI process is far from perfect. Among other things, petitioners still face intimidation, and public-private-partnerships, which are proliferating in every sector of the economy, have yet to be brought under its ambit.

Neither route will be sufficient, however, unless there is more disengagement from the ugly game of global one-upmanship that informs the desire to be ‘world class,’ especially by parties that claim to represent the poor. Nothing facilitates corruption more effectively than throwing a veil over democratic processes, which even well-meaning people are inclined to do, when driven by the competitive fire of becoming ‘world class.’

Mitu Sengupta is Director, Centre for Development and Human Rights (CDHR), New Delhi, and Associate Professor of Politics, Ryerson University, Canada. She can be reached at mitu.sengupta@gmail.com.