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In a report tabled in Parliament on May 15, the Comptroller and Auditor General (CAG) of India has slammed the Department of Space (DoS), the parent body of the Indian Space Research Organisation (ISRO), for selling off valuable spectrum to a firm owned by a foreign company without Cabinet approval.
Antrix, the commercial arm of ISRO, had sold off a portion of the S-band (2.4-2.8 GHz) to Bengaluru-based Devas, promoted by retired ISRO officials, for providing services, such as 4G, television on mobile phones and Direct to Home (DTH) television, in 2005. The Antrix-Devas deal, as it came to be known, was eventually scrapped early last year after national media highlighted loopholes in the contract.
The government established two panels to probe the matter. G Madhavan Nair, the chairperson of ISRO under whom the deal was sealed, and three other senior ISRO officials, were removed from office after the reports were made public by DoS in February this year.
ISRO currently holds 150 MHz of the S-band, out of which 70 MHz is earmarked for Mobile Satellite Services (MSS) and 80 MHz for Broadcast Satellite Services (BSS). The entire 70 MHz MSS segment was sold to Devas for around Rs 1,000 crore, which was a small amount for such a huge amount of spectrum capacity. This can be guaged from the fact that in 2009 Bharat Sanchar Nagar Limited and Mahanagar Telephone Nigam Limited were given only 20 Mhz each of spectrum in the S-band for wireless services by the government for a hefty price of Rs 8,000 crore. Further, in the auction of 3G, the government received Rs 67,719 crore; the auction of Broadband Wireless Access earned the government Rs 38,543 crore. In additon to S-band allocation, ISRO also granted all 20 transponders on two satellites meant to launch these services to Devas.
The CAG said of the deal: “Public interest and those of the Government were sacrificed to favour a private consultancy firm which was promoted by D Venugopal and M G Chandrashekhar, retired employees of ISRO.”
The report also says the DoS was not authorised to approve the allocation of spectrum frequencies to Devas for digital multimedia services—it was the job of the Cabinet. “The Department of Space took upon itself the task of approving the new hybrid SÔÇÉDMB service which as in the case of DTH services, was the prerogative of the Union Cabinet. Valuable spectrum frequencies, including 10 Mhz, which were to be reserved for strategic purpose, were earmarked for Devas without obtaining approval of the Wireless Planning and Coordination of the Department of Telecommunication (DoT),” it stated.
Deal tainted from beginning
The report says that the Antrix-Devas deal was tainted right from the word go. DoS did not consult other departments like DoT and Ministry of Broadcasting and Information (MIB), which is required as per the Transaction of Business Rules of 1961.
“Inter-departmental consultations were not in place before entering into the contract for the Devas services,” the report says. “Guidelines and licensing conditions were not in place before entering into the contract for the Devas services.”
DoS role comes into play only when allocation of satellite capacity is concerned, and before that several steps have to be taken, which the department conveniently bypassed. The report further accuses the DoS of not considering the government's interests while making the deal, stating, “Seventy MHz of SÔÇÉband spectrum was earmarked for an indefinite period to Devas ignoring its revenue potential to the Government. .”
Conflict of interest
Nair is disparaged for taking advantage of his multiple roles. “As Chairman ISRO, he appointed the Shankara Committee to examine the proposals of M/s. Forge Advisors (parent company of Devas). As Secretary, DoS, he submitted a note to the Union Cabinet in which critical facts were concealed. As Chairman, Space Commission, he chaired meetings where approval to GSAT– 6 and 6A satellites were accorded. He failed to convene INSAT Coordination Committee meetings as its Chairman, as a result of which, concerns of key stakeholders, represented through respective Secretaries of Ministries/Departments, were effectively blocked off in the decisionÔÇÉmaking process.” There was a complete conflict of interest here as Nair holding so many positions of importance gave an edge to Devas.
The CAG concluded that the AntrixÔÇÉDevas deal is a “classic” example of failure of the governance structure, in which selected individuals, some serving and some retired public servants, are able to successfully propel the agenda of a private entity by conferrring upon themselves powers they are not authorised to exercise.