CAG tears apart Antrix-Devas deal

Former ISRO chairperson Madhavan Nair took advantage of the many positions of power he held to push deal through, says Comptroller and Auditor General report

By Dinsa Sachan
Published: Saturday 04 July 2015

antrixIn 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.

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