CAG reports on IFFI

Manohar ParrikarBhagwan ke ghar der hoti hai ander nahi. so goes the adage. But in the Andher Nagari of Goa, where the Choupat Raja Digamber Kamat is ruling, there is both der as well as andher.

Mr. Manohar Parrikar who is largely responsible most of the good things in Goa that exist today, was summoned by CBI on April 16, 2010. An FIR was filed by Mavin Gudinho (Congress Legislator) with local police but when the case was handed over to CBI he withdrew it.

Why would Mr. Mavin Godinho do so? Answer is simple. Mr. Parrikar had unearthed the multi-crore power rebate scam done by him. I am not aware what happened to that scam and the inquiry involved in it. Had Mr. Parrikar been in power possible he would have been behind bars.

Navhind Times reports that the CBI’s assertions against Mr. Parrikar as ascertained from the questions he had to face were based on the 2005 CAG report.

Why of all Mr. Parrikar is held guilty? There can be two reasons

1. Mr. Parrikar in his capacity as a chief minister was the chairperson of Goa Infra. Dev. Corp. which was the nodal agency responsible for building necessary infrastructure for the film festival. The additional secretary budget was holding the managing director position.

2. Mr. Parrikar was part of the committee formed to make policy decisions for IFFI. But there were more people on it. Who exactly?

The Core Committee comprised the Chief Minister, Ministers for Urban Development, Health, Town and Country Planning, Revenue, Tourism and Art & Culture, Shri H. Zantye, MLA and Government Officials being the Chief Secretary, Secretary to the Chief Minister, Principal Director Information,
Publicity & Films and the Managing Director, GSIDC. All other Ministers and the Chairman Kala Academy were special invitees.

CAG generally advises government on the matters that involve spending of money. Irregularities are brought to the notice of government and government has to respond to them over which the CAG also comments in it’s final report.

CAG has noted down several points where irregularities were observed in the execution of pre-IFFI works. CAG has not blamed any specific person but only the company  (GIDC ).  While we read through the notes it must be noted that government had only 6-8 months to build all necessary infrastructure and it was achieved in that time frame.  CAG report is here.

Bidding for Multiplex construction

3 bids were received.

Adlabs 3 screens 16 crores

INOX 6 screens 21 crores

PVR 34 crores

20% weight-age was given to the technical competency and 80% to financial bid. The consultant appointed was HOK Canada Inc. After the committee saw the presentations based on HOK’s advice the bid was awarded to INOX. HOK also suggested that  the screens should be 4 but the total seating capacity should be same as quoted. INOX reduced the original bid by 1 crore because of one less screen and renovated old GMC for 2 crores. This was despite the fact that there was major original rework in the construction design. The superstructure was changed from RCC to steel.

CAG’s contention is that the clause for renovating old GMC was removed without changing the bid amount. The government’s reply to the same was that, the change in superstructure based on HOK’s suggestions resulted into extra cost and the multiplex was shifted away from old GMC hence the clause was dropped. The government’s explanation in this case is acceptable given that government had not time to renegotiate the price based on the the minor modifications.

The show stopper here however is ICICI bank. This bank was a special invitee by government to give their expert advice on financing multiplexes. CAG notes that ICICI bank advised that a “World Class” multiplex costs Rs. 2000 per square feet.  CAG also notes without any references that multiplexes in other cities were built in 6 crores. I searched google to find the truth in this claim. Those who didn’t get the joke try searching for price of an ordinary office space in Goa.

ICICI Bank, who were special invitees for giving their 

professional advice on the cost of multiplexes financed by them, had informed

the Company that the cost of a world class multiplex would be around Rs.2,000

per square feet. Accordingly, the cost of a multiplex of 30,000 square feet would be around 6 crores.

Kala Academy’s Exceeded budget

Kala academy renovation was estimated by consultant Uttam Jain at Rs 24.18 crores. The contract was awarded but the budget exceeded by 9 crores. which is 41%. Jain was paid Rs. 1.5 crores for making this estimations. Though the CAG is silent on why this could have occurred probably because of acceptable replies from government has problem with not issuing a separate tender for the additional 9 crores. Isn’t the pressing deadlines could be the reason?

But Goan news reporters are overenthusiastic. For them things are crystal clear. Goan Observer reports

Unity Infraprojects Ltd. will be conferring the Infrastructure Award on Shri Manohar Parrikar for giving them Rs 24 crores to convert the toilet in the Old Kala Academy into an state-of-the-art Art Gallery. The award will bear the legend “ United we can loot and plunder the Government of Goa.” Simplex will be inaugurating the new bridge from the special IFFI jetty at the Kala Academy to the official residence of the Chief Minister in Altinho. So that the Chief Minister does not get caught in traffic jams on his frequent trips to the Kala Academy and the tarted up old GMC complex which houses the offices of the Entertainment Society of Goa.

What work did the company actually do? If one can trust their word for it here it is for a curious mind. Notable point is that CAG has not casted doubt on the figure itself, his only contention is that the government lost competitive advantage of bidding while exceeding the budget by 9 crores.

What happened in 2006?

Let us see what happened in 2006 when Mr. Pratap Singh Rane was the Goa CM.

Let us see what CAG has to say.

The ESG approved (September 2006) the proposal of EMA for engaging popular artists for various events like opening and closing ceremonies, concerts, etc. at a total fee of Rs 4.92 crore subject to the EMA generating sponsorship of the like amount. The actual expenditure on artists’ fee was Rs 5.05 crore as compared to the expenditure of less than Rs one crore spent on the artists for IFFI 2005.

Artist’s ? Who Artists? See what government had to say.

The Department stated (July 2008) that the increase in expenditure on artists cost was that the artists were internationally renowned, and charged a huge premium. The reply is not tenable as the huge expenditure on artists and low sponsorship resulted in extra burden of Rs 2.05 crore on public exchequer. [Source]

Internationally renowned? If you can find any in the entertainment event list of that year please let me know. Do not get fooled by the name Bony M. Its just a group name.


Certainly IFFI 2004 was not executed in a flawless manner with everything bang on. Budgets were exceed is the only conclusion one can draw. Mis-appropriation of funds can be claimed only if money was spent without taking it through required scrutiny and procedures.

The artist’s 5 crores fee in IFFI 2006 is one prime example, where EMA got paid Rs. 5 crores for giving a service which was exactly same (rather inferior) as previous year only to cost Rs. 4 crores more.

Mr. Parrikar built all the necessary infrastructure within the required time-frame and without any wastage of money. One can not ignore that CAG has nothing to say about the beautification exercise, procurement of additional busses, renumeration given to IFFI artists and so on. Where as when it comes to IFFI 2006 it is compelled to note that even procurement of television sets had a major scandal in their. TV sets were purchased but they were not of the  brand given in the tender.

Also both IFFI 2006 and 2005 involved unnecessary self-promotional advertisements that’s cost around 1.5 crores. The event management company (EMG) was responsible for this. But the leaders were not sure if their photos withe leading actresses and actors would be published in newspaper or not hence they employed publicity department and ESG to publish advertisements worth crores.