Inquiry reports point to how the Antrix-Devas agreement evaded scrutiny at key points in the approval process.
It wasn't just that the ‘Antrix-Devas deal' was iniquitous and deeply flawed. Reports from two government appointed committees that probed the deal tell a startling tale of how Indian space officials set about securing some Rs.800 crore in public funding in order to implement the agreement, evading scrutiny at key points in the approval process.
The agreement signed in January 2005 between Antrix Corporation, the marketing wing of the Indian Space Research Organisation (ISRO), and a private Bangalore-based company, Devas Multimedia, was intended to introduce novel satellite-based services to the country. These “satellite digital multimedia broadcast” services would be delivered to fixed, portable and mobile receivers.
The agreement was, however, heavily loaded against Antrix and ISRO. Much of the upfront costs as well as the risks of building, launching and operating two specially designed satellites fell on them. Another important consequence of the deal was that it allocated a considerable swath of S-band spectrum to Devas for 12 years, with the possibility of extending the lease by another 12 years. (For more details, see “Delhi, we have a problem,” The Hindu, January 31, 2012.)
The Hindu exposé
The Hindu group brought this agreement into the public domain in an expose in February last year. Later that month, the Union government annulled the deal. It also appointed a high powered Review Committee consisting of B.K. Chaturvedi, a member of the Planning Commission and former Cabinet Secretary, and Roddam Narasimha, a distinguished academic and member of the Space Commission for many years, to examine the technical, commercial, procedural and financial aspects of the agreement.
After this committee submitted its report in March 2011, the government set up a five-member high-level team headed by Pratyush Sinha, former Central Vigilance Commissioner, to identify “acts of omission and commission” by officials.
Parts of the two reports were released earlier this month. The entire report of the Chaturvedi-Narasimha committee, barring the annexures that appear to contain various internal documents, has been made public. But in the case of the Sinha committee report, only the chapter, “Conclusions and Recommendations,” has been released.
The Antrix-Devas agreement required ISRO to provide two custom-built satellites, with 90 per cent of the capacity on the satellites being leased to Devas. The satellites came to be called GSAT-6 (also known as Insat-4E) and GSAT-6A. ISRO would, as the report of the Chaturvedi-Narasimha committee noted, have to invest about Rs.800 crore on the two satellites and their launch.
In May 2005, four months after the agreement with Devas was signed, the Department of Space (DoS) approached the Space Commission, a body that helps formulate the country's space policy and oversees the space programme, with its GSAT-6 proposal.
The budgetary support of Rs.269 crore sought for GSAT-6, however, did not include the launch cost. Moreover, on the subject of the satellite's utilisation, the Commission was merely told that a significant portion of the spacecraft's capacity would be committed for lease to a service provider on appropriate commercial terms and that the DoS had already been approached by a service provider who had undertaken to lease the capacity over the life period of the satellite, according to the report of the Chaturvedi-Narasimha committee.
“There was no mention in the background note [to the Space Commission] that [an] agreement had already been signed with Devas, which envisaged earmarking 90 per cent of the capacity for them,” the report observed.
Nor was the DoS more forthcoming when, after getting the Commission's nod, the GSAT-6 project went for the Union Cabinet's approval.
The report quotes part of the note sent to the Cabinet in November 2005: “ISRO is already in receipt of several firm expressions of interest by service providers for utilisation of this satellite capacity on commercial terms. Part of the capacity will also be utilised by ISRO for experimentation and demonstration of new satellite based mobile communication techniques and technologies.”
The report pointed out that “the impression given to both the Space Commission and the Cabinet was as if there was no agreement yet and Antrix/DOS had been approached by several potential customers.” The GSAT-6 proposal was cleared by the Cabinet in December 2005.
Nor did matters improve when the Rs.147-crore proposal for the second satellite, GSAT-6A, was placed before the Space Commission in October 2009. The proposal included neither insurance nor launch cost. “It was, hence, below the financial ceiling of Rs.150 crore above which Cabinet approval [is] required,” the report noted. Once again, there was no mention of any agreement signed with any service provider. This proposal too got the go-ahead.
The deal had allocated about 60 MHz of S-band spectrum to Devas. This, the Chaturvedi-Narasimha committee remarked, seemed “disproportionately large,” considering that 20-25 MHz of spectrum in this band had reportedly been used for similar services in the U.S., Korea and Japan. Moreover, “this left very little spectrum with ISRO for any strategic or societal use in future or other multimedia mobile service operations.”
The allocation of spectrum was carried out without clearance from the Insat Coordination Committee (ICC), an inter-departmental body established in 1978. Under the Satellite Communications Policy approved by the government, the ICC was a key institution in allowing the use of Insat capacity by non-government users.
No ICC clearance
But the ICC had not met since 2004. The proposal for utilising GSAT-6 and GSAT-6A for the Antrix-Devas project was never placed before the ICC. As a result, none of the aspects of the agreement could be considered by it, noted the Chaturvedi-Narasimha committee. “Earmarking of GSAT capacity for the Antrix-Devas project was thus a clear violation of government policy,” the report said. Besides, utilisation of a large part of the S-band spectrum by one private user also went against the “non-exclusive” policy for the Insat system.
The Chaturvedi-Narasimha committee also criticised the way the Space Commission and the Cabinet were left uninformed about the spectrum allocation. When placing the proposal for GSAT-6 before the Space Commission in May 2005, “it was important that a mention be made that the bulk of the S-band spectrum available with DoS” was being committed. No such mention was made even when the proposal for GSAT-6A came before the Commission in October 2009. “This left the Commission completely in the dark.” The question of spectrum allocation and its implications were not analysed at all. “Absence of full facts clearly weakened the decision-making process in [the] Space Commission and the Cabinet.”
The committee, however, took the view that “concerns on short-selling of spectrum or selling it cheaply are not substantiated and have no basis.” The space spectrum and terrestrial spectrum had to be considered and priced differently, it observed. Besides, for operationalising its full service, Devas was required to obtain other licences for the terrestrial segment of its business. The terrestrial segment would be subject to government procedures for allocation and associated charges.
But this does not take into account the possibility of spectrum allotted for the space segment being subsequently diverted partly or wholly for providing terrestrial services. Nor is this a purely hypothetical possibility. The U.S. Federal Communications Commission (FCC) has, for instance, been showing increasing leniency in allowing such a switch. Last year, it issued a waiver that allowed the company, LightSquared, to use its satellite spectrum for 4G terrestrial wireless broadband services. (However, that waiver was recently revoked over concerns that such a terrestrial network would interfere with GPS signals.)
In such a situation, the S-band spectrum allotted to Devas could easily have become very valuable, given the explosion of mobile services in the country and, indeed, around the world. The potential value of this spectrum would also explain why a group like Deutsche Telekom Asia was willing to a pay a huge premium to acquire shares in Devas.
The Sinha committee, in its report, concluded that “there have been not only serious administrative and procedural lapses but also suggestion of collusive behaviour on the part of certain individuals.” Based on the reports of the two inquiry committees, the government barred four former space officials, including the then ISRO chairman, G. Madhavan Nair, from holding any government post.
But the fallout from the deal could seriously impact the space programme itself. Its structure involving the Space Commission, the Department of Space and ISRO was put in place with the intention of minimising bureaucratic hassles that tie down other government bodies. Now, there is a danger of increasing bureaucratisation that can delay and impede the country's space efforts.
Keywords: Antrix-Devas deal, ISRO, Devas Multimedia, GSAT-6
The ISRO- Antrix- Devas deal is definitely made on questionable assumptions and by following dubious practices. The fundamental question as to why Antrix did not itself or through a specialized subsidiary undertake the activities that Devas promised to execute itself is not being questioned. What value was Devas really bringing to the table, when the whole risk and science behind the satellites was ISRO's, i.e., Indian public's. These and other fundamental questions should have been raised by the Department of Science & Technology under which ISRO operates. It's pertinent to note that the Ministry of Science and Technology was headed by none other than the Prime Minister Man Mohan Singh. The whole Devas "deal" was conceptualized and executed after Man Mohan Singh took direct oversight of the Ministry of Science. I wonder how he does not assume any responsibility for the scam. And how the MoS Prithviraj Chouhan has been "rewarded" with CM-ship of Maharashtra while Scientists punished !
The entire episode must be brought to the knowledge of the public. There seems to be a move to hush up the whole thing. In 2G scam, a lone Dalit Minister was hounded and incarcerated like a criminal. But here, there seems to be an "intellectual and scientific hush-up" operation by the Kerala Lobby. "If you do this, it is a crime and if I do this a scientific and intellectual mistake" is the underlying assumption of Mr. T.V. Sivakumaran. This is a serious crime and it must be treated according to the law of the land. The entire scientists should be ashamed of themselves even if some scientists argue that scientific community should not be treated like this.
I totally agree with Mr Ayan, this was not a simple one off "mistake"...
Such dubious dealings and overlooking of national interests have always
been there and will continue to be the case in all public-private
transactions...whats relieving is the active role of institutions such
as CAG and PRESS...kudos to the HINDU team!!!
The Chaturvedi-Narasimha committee appears to have reached the conclusion that there was no criminality involved, even if there were some collusion between ISRO officials. Seriously? The reasonable procedures in place for the allocation of scarce resources and expending huge sums of money seem to have been deliberately circumvented on several occasions. I am sure that was not done for the benefit of the citizen of India, well, at least not the generic citizen. Such scams expose more than a loss of revenue to the exchequer or the abuse of public funds. Given the organisations involved this poses a grave risk to national security since it betrays the character of some of the people at the upper echelons of our high-tech organisations. Hopefully the DRDO does not have similar skeletons.
Much awaited article indeed. Thanks to 'THE HINDU' for making things
clear here otherwise it would have been carried away as another
mistake from Govt officials and would have let public even more
angrier with the present govt. Being in the top most posts of Space
missions administration would indeed comes with lot of responsibility
of understanding all the checkpoints and process in place so that
these space missions and their commercial deals would be durable & successful. The case here would be a good learning for the scientists
in future...Hope this incident does not let their morale down and
accept this as a lesson.
Gopal Raj articulately presented the chronological order of events and how much communication gaps were among different agencies. By stating that if we cahrge more to the companies they will charge even more to subscriber, people forgets that the money which government is loosing is 10 times than what people might have paid less. The remaining 9 times of that money goes in private company holder's pocket.
With due regard to the contribution of our devoted space scientists for the national growth, the shady deal ventured to fatten the purse of private corporates cannot be sweeped under the carpet. It is evident that the commercial wing has turned a Nelson's eye to the basic process of tabling the deal to the competent forum for sanction. Given the gargantuan loss though reported averted by the centre's intervention,the allocation of spectrum that was decided above the head of ICC, was quite unusual and the needle of suspicion rests with the core team including the revered scientists, absolving whom from the charges is less justified. How could the contentious deal jump the scrutiny of the competent authority/committe is a million dollar question. Salute the pinnacle of sapience of scientists, though not their grime.
The cry over the deal has blown out of proportion and I think it was mainly due time was out [at the time of cold blooded scams like 2G and CWG. I agree with the statement that space spectrum and terrestrial spectrum has to be viewed and considered in a different way.We cannot evaulate the past deals and agreements based present measures. Nevertheless, if some thing is fishy, an alternate approch like back ground check on any undue financial advantage to the subjects involved in the deal can be made. Suspicion simply based on the facts like the the management of Devas was ex. staff of ISRO is not appropriate. After all, there is nothing wrong in scientists doing business provided it is in legal frame work of law of the land.
@Mr.Sivakumaran...
Are you so naive Mr.Siva that when losses run into thousands of crores it just a simple "mistake", or were the ISRO officials so oblivious to the fact that such a program would reap rich dividends for the exchequer...this is not a technology which has its birthplace at ISRO, there are other countries which have already been there done that...can an estimate not be taken putting those models in mind..and when countries like US and Japan have only alloted 20-25 Mhz of the spectrum to private dealers why should Devas have 60 Mhz of it...also this was no pilot program that was done to check the viability of using the S-band spectrum in India, it was a genuine commercial deal whose benefits should have been recieved by the exchequer and which eventually would trickle down to the end users...saying that genuine national interests were in mind might be true but to consider that they had not a clue is too simplistic and foolish in the modest terms...
Is there any honest person left in this country...this piece shows without a shadow of a doubt that there was something brewing between ISRO and DEVAS...if it was such a transparent process as Mr. Nair claims to be then why did they not disclose to the Cabinet Committee and the Space Commission that they had already entered into an agreement with Devas...the links are bound to go deeper.
Thanks to our extraordinarily active CAG the whole nation seems to be suffering a severe, form of Schizophrenia, one of the symptoms of which is acute paranoia. The media like your newspapers are helping to spread this . Every Govt. dept. according you is crooked and every officer is corrupt helping some private co. for quid pro quo.
Why can't we accept that officers are also human beings and sometimes make mistakes, not always with a view to making a fast buck. From what the scientists have been explaining, this deal was entered into with good intentions with genuine national interests in mind. The notional losses to the Govt. is all imaginary and no fool will pay the type of price for the satellite channels. Anyway, now that the Govt. has cancelled the deal why should we go on probing , when not a shred of evidence is there that any one involved in the deal has reaped undue benefits from private companies. The Co., has gone for international arbitration ,and why cant we wait .
The deal smacks of collusive behaviour of some ISRO officials with the private firm DEVAS. It also shows the Space Commission and the Cabinet Committee in poor light as neither of them asked any probing questions. They simply signed on dotted lines or had no knowledge or capability to oversee such complex subjects. Why no questions are being asked from members of thse approving bodies.
But Sir, If Antrix had to pay extra cash for the sat service surely will they not offload it on the customers making the service highly costlier, Today the 3g plans are inflating at the rate of 30% per six months, The Unlimited plan which was 700 under A.Raja's tenure is no more, A 10 GB plan from BSNL cost 1260 now will costing 1800 Rs after march. It has almost tripled to meet the subsidised charge BSNL made to pay for the frequency. Look what media does is bad. Look u might expose a lot of thing in media but what about one sided reports of the media. Why we r not hearing about this telecom data inflation? Whats the real motive behind "THE HINDU"? please forward it to the current readers editor. The Antrix deal was to help rural broadband services if its costly then who can afford it?
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