The government, groaning under the weight of a series of scams, has spent much of today contesting charges that it cost the country crores of rupees by allotting 60MHz of valuable S-band spectrum for Rs. 600 crore to a private company named Devas.
The contract has been under review since 2009, and will also be cancelled soon, said the chairman of the Indian Space Research Organization (ISRO), which signed the contentious contract six years ago.
ISRO’s commercial branch – Antrix – agreed in January 2005, to build two satellites on which Devas would lease transponders. ISRO chief K Radhakrishnan said today that at the time, the deal seemed to support the mandate for entering into "new and novel" projects. He added that neither the transponders nor the spectrum has so far been handed over to Devas.
It appears the Cabinet cleared making of two satellites but was not explicitly informed that S-band spectrum was to be bundled with this. ISRO also erred by not informing the Cabinet of the Dewas deal.
The space agency defends the Antrix-Devas deal being struck without bidding saying, the technology was new and bidding was not necessary as there were no other takers. Bids were invited for KU-band transponders since large number of people wanted these.
Mr Radhakrishnan said that S-band had become available for use after India began using KU-band for broadcasting services. However, in 2008, it became clear that new requirements from the country’s national agencies would need S-band spectrum.
So in December 2009, the Department of Space began a comprehensive review of the Antrix-Devas contract and in July 2010, a decision was taken to annul the contract.
"We are going through the process which we expect to be completed soon. We have not either given either the spectrum or satellite transponders to M/s Devas or Antrix Corporation so far. The review of the agreement by the Department of Space was on since 2009." said Radhakrishnan.
"When we have to terminate a contract, it is a complex process, that is what we are going through, so that government does not incur damage or financial loss," Radhakrishnan added.
The fact that the deal has still not been formally terminated was explained as testimony to the "robustness of decision-making," said K Kasturirangan, former ISRO chief, currently Member, Planning Commission.
Earlier today, the PMO’s statement stressed, "This office has seen reports alleging loss of Government revenue in a contract entered into by ANTRIX and Devas Multimedia Pvt. Ltd. due to lease of space segment capacity which would use S-Band Spectrum. The Comptroller and Auditor General’s office and the Department of Space have already issued statements stating the factual position on the matter. It is further clarified that no decision has been taken by the Government to allocate space segment using S-Band Spectrum to ANTRIX or Devas. Hence, the question of revenue loss does not arise and any such reports are without basis in fact."
The allegation was that if the Government made Rs. 68,000 cores by auctioning off 15 MHz of 3G spectrum last year, then this was clearly a sweetheart deal for Devas, which plans to provide broadband satellite services on platforms like mobile phones.