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Rs. 698 million squandered on abortive bid to host C’wealth Games
Public funds to the tune of Rs 698mn were squandered on an unsuccessful bid to host the 2018 Commonwealth Games in Sri Lanka and a special investigation must be carried out into the donation of Rs 570,819,155 towards this effort by other institutions and private individuals, the National Audit Office (NAO) says. The findings are contained in a ‘Special Audit Report on Securing the Hosting Right for the Commonwealth Games 2018’. It was released recently by the NAO. A State-owned company called CWG 2018 (private) was incorporated to execute, implement and present Sri Lanka’s bid to host the Games. The Sports Ministry and General Treasury provided Rs 110mn in initial capital while the Sri Lanka Export Development Board (EDB) and Sri Lanka Telecom contributed Rs 18mn.
Cash grants were also obtained from private organisations and individuals. The company raised Rs 689.9mn but
Sri Lanka did not win the bid.
The NAO said the money was not properly monitored and was spent without transparency and financial control. Company administration did not comply with the relevant rules as evidenced by books, bills, various documents, interviews and statements.
The NAO says the company was incorporated contrary to Cabinet decisions. Share certificates for public sector equity were not issued legally. And various consultants were selected contrary to procurement guidelines. The EDB invested money in the company “outside of its objectives”. The company did not properly maintain books and records and it was not wound up in compliance with the Companies’ Act after it failed to win the CWG 18 bid, the NAO says.
CWG 2018 (Pvt) was incorporated on November 23, 2010. PMP Legacy, a British company, was selected on the same day by the organising committee to prepare and present bids to the CW Games Federation on behalf of Sri Lanka. The agreement amounted to US$ 2,958,486 as fees. In one of the instalments dished out to this company, there had been an overpayment of US$ 13,691.50.
The VICEROY special train was selected for a CW special representative to visit within Sri Lanka. J/F Tours & Travels (Ceylon) Pvt Ltd was the agent and earned a total of Rs 4,266,075. Of this, J/F Tours paid just Rs 738,756 to the Department of Railways after the Sports Ministry intervened to get them a hefty 40 percent discount.
An aircraft with carrying capacity of 245 passengers was rented from SriLankan Airlines to transport officials to bid promotions in St Kitts and Nevis. Only 120 passengers took the flight. The cost of the travel was Rs 86,255,080. While Rs 89,637,500 had been set aside for this purpose, SriLankan was paid only Rs 57,605,625.
The national carrier not only absorbed Rs 32,031,874 from its expenditure, it paid Rs 443,100 as flight duties and taxes for 140 passengers that included ministers, MPs, officials and more.
The total amount of funds received by the company from public institutions, donations from the private sector and including interest income from banks was Rs. 698,948,339. The total amount of cash receipt was Rs 696,765,299 according to accounts submitted.
At the time of canvassing funds for this private company, request letters were issued by former Governor of the Central Bank and the Sports Minister using official designations. Furthermore, a significant number of donors were commercial banks and financial institutions regulated by the Central Bank. But the company had not issued formal receipts to private donors for their contribution of Rs 570,819,155. And Rs 120,402,653 was directly obtained in cash.