Did the Antrix-Devas agreement on S-band spectrum go as far as it did because many individuals in the know chose not to intervene?
Quite apart from the fashion in which valuable S-band spectrum was allocated to a single private company for an extended period of time, the Antrix-Devas agreement and the way in which it was sought to be implemented were highly questionable in other ways too.
The deal was finally annulled following the exposé by The Hindu and its sister publication, Business Line, in February last year.
Much of the upfront cost for the two satellites required to operationalise the agreement and their launch were to be borne by the public exchequer. The issue of making good any satellite malfunctions or launch failures would also have arisen. Whether, and to what extent, higher authorities such as the Space Commission and even the Union Cabinet were informed of the deal and its implications is murky and unclear.
The agreement was signed on January 28, 2005 between Antrix Corporation Ltd., the marketing wing of the Indian Space Research Organisation (ISRO), and Devas Multimedia Pvt. Ltd. based in Bangalore.
The agreement laid down that Antrix would provide satellite capacity to enable Devas to launch ‘satellite digital multimedia broadcast' (S-DMB) services that would be delivered to fixed, portable and mobile receivers, including mobile phones and vehicle-borne devices.
As a result of this deal, ISRO was committed to build, launch and operate two custom-built communication satellites, which came to be called GSAT-6 (also known as Insat 4E) and GSAT-6A. The agreement specified that 90 per cent of the capacity on these two satellites would be leased to Devas “on a 24-hour, seven-day-per-week basis” for 12 years, with a provision to extend the lease by another 12 years.
These were not ordinary communication satellites of the sort that ISRO had built and launched before. They involved high-powered spot beams in the S-band requiring a large 6.5 metre antenna (that could be unfurled in space) that was specially developed for these satellites and which ISRO has never flown before.
Satellite issues
ISRO communication satellites have had their share of problems that led to partial and, in the case of the Insat 2D launched in 1997, total loss of onboard capacity. As recently as July 2010, a problem with the Insat-4B's power supply system led to half its communications capacity being shut down.
With what are essentially developmental satellites like the GSAT-6 and the GSAT-6A that have not been flown before, the risk of problems arising are greater. Such concerns are particularly high in the case of the large antenna that could be unfurled in space. If it failed to open out properly, the entire satellite would be rendered useless. In addition, the Geosynchronous Satellite Launch Vehicle (GSLV), on which the satellites were to be launched, has also not settled down to provide reliable service.
Yet, the Devas contract has stringent penalty clauses for when the satellites must become operational, the quality of service to be provided and tough norms for declaring “a Total Satellite Failure.” In the latter event, a replacement satellite has to be provided within a specified time span at no extra cost to Devas.
Experience elsewhere in the world indicates that mobile satellite services in the S- and L-band frequencies have often proved financially unviable. Regulatory authorities in the U.S. and elsewhere are therefore permitting some part of the satellite frequencies to be used for lucrative terrestrial communications. If regulatory authorities in India were to permit similar flexibility, the S-band frequencies that the deal had allotted to Devas would have become a highly valuable resource.
In fact, a note prepared for the Cabinet Committee on Security in February 2011 by the Department of Space, the parent body of ISRO and Antrix, pointed out that the company had plans to get into terrestrial broadband services. Such a dispensation “might not ensure a level playing field for the other service providers using terrestrial spectrum, especially considering the significant demand for S-band spectrum,” it noted.
CAG estimate
A preliminary estimate prepared by the Comptroller and Auditor General last year had suggested that the spectrum allotted to Devas could have been worth as much as Rs.2 lakh crore. According to ISRO, the amount payable by Devas over a 12-year period was just $300 million (about Rs.1,500 crore at the current exchange rate).
While Rs.766 crore of public money would be spent on building and launching the two satellites, Antrix's revenues from Devas would come to only Rs.1,350 crore over a 12-year period. The note to the Cabinet Committee on Security admitted that this would have not been sufficient compensation for all the costs incurred by ISRO.
There is also the question of how this particular company was chosen for the deal. The line taken by ISRO has been this was the only company that came forward with a viable plan for the sort of satellite-based multimedia applications that were envisaged. However, no open competitive process seems to have been even attempted in making such a choice.
Considering that Devas is headed by a person who once held a senior position in the space programme, the onus on the Department of Space, ISRO and Antrix to make sure the deal was in public interest and not tainted by any whiff of cronyism was all the greater.
Given all these factors, the Department of Space ought to have ensured that both the Space Commission and the Union Cabinet were formally informed and fully briefed on the Antrix-Devas deal and all its implications when seeking approval to build the two satellites required.
The Space Commission was established by the government four decades back to formulate the country's space policies and oversee implementation of space programmes. All important programmes and projects have to be cleared by the Commission, and it also has delegated powers to clear financial expenditure on projects up to a certain amount.
Headed by the Secretary for the Department of Space (who is also chairman of ISRO), this powerful body has top officials from the Central Government among its members. Currently this includes the Minister of State in the Prime Minister's Office, the National Security Adviser, the Principal Secretary to the Prime Minister, the Cabinet Secretary, a Secretary in the Department of Expenditure, a Secretary in the Finance Ministry who is the Member (Finance), and the Principal Scientific Adviser to the Government.
After the Space Commission gave its clearance, the Union Cabinet approved the building of GSAT-6 in December 2005. Four years later, the Space Commission, under its delegated powers, gave the go-ahead for the follow-on GSAT-6A.
The proposals from the Department of Space seeking approval for the GSAT-6 and GSAT-6A “did not make any reference to their utilisation for the Antrix-Devas agreement,” according to the background note issued by ISRO last February. Only at its July 2010 meeting, when it recommended annulling the contract, was the Space Commission “apprised on this contractual agreement for the first time.”
However, in a recent interview with The Hindu, G. Madhavan Nair, who was chairman of ISRO and Antrix when the deal was signed and approval for the two satellites taken, has said that several people in the government, including from the Prime Minister's Office, were aware of the details of the deal at every stage.
Besides, there are persons who are members of both the Space Commission and the Antrix's board of directors. One such individual is the Member (Finance). Another is the Director of the ISRO Satellite Centre that is responsible for building the satellites. So it is difficult to see how the Space Commission could have been entirely in the dark about the deal with Devas.
The Insat-2E lease
All of this is in stark contrast with the approach taken by the Department of Space in leasing capacity on the Insat-2E. Half the capacity on this satellite, launched in April 1999 and now nearing the end of its life, was leased out to Intelsat. (Intelsat, which since been privatised, was then an international consortium operating satellites in which India too had a stake.)
In the case of this satellite, some customisation had to be done, including its transponder characteristics and beam shape, to meet user requirements. As ISRO had just begun building communication satellites, the deal was seen as a way to gain credibility and thereby access to the international market for building satellites.
In the case of the Insat-2E, the Department of Space made sure that the Space Commission and the Union Cabinet were formally informed about the Intelsat deal and why it was being carried out.
With the Insat-2E, the annual reports of the Department of Space, which are documents presented to Parliament each year at the time of the Union Budget, clearly indicated the capacity that would be leased out to Intelsat. When it came to the GSAT-6, however, the annual reports of the Department of Space are silent about the satellite capacity that had been allotted to Devas.
While individual accountability can and should be fixed, it is obvious that there was a system-wide malfunction. The question is how many individuals up and down the government and Space hierarchy knew what was happening but chose not to intervene.
gopalraj@thehindu.co.in
Comments:
thank you gopalraj, you have written a very good article !!
Mr. Gopalaraj and The Hindu are to be complimented for this clear explanation of the complex issues involved. As one who was associated with the U.S. Space program (NASA) for over a decade, I find that the Indian space program and the industry are lacking in transparency. This kind of 'revolving door' mechanism whereby officials move from the government agency to the private industry needs to be closely monitored if public interest is to be protected.
India is relatively new to this highly lucrative space business, but has to develop both the expertise and the sophistication to deal with such complex issues. The same holds for the media. The Hindu has shown the way.
Given all these facts, could The Hindu or the authour explain how Tata
comm and other private companies could make use of existing spectrum on
satellites launched by ISRO at the public chequers expense?
This example clearly shows the problems that plague developing countries. Very valuable resources are robbed by misuse of power !
Its very easy for the scientists to mislead the bureaucrats in the Space commission. Mr Nair being the ISRO chairman at that time is the person with most responsibility. There should be a CBI enquiry on this and whether any monies were paid to any of the people involved by Devas. What the government did wrong was to not grant an opportunity to the scientists to defend themselves before the govt and the court. The govt should consider the scientists innocent until proven guilty.
Is ISRO a profit centre? Is there a balance sheet prepared by the Member, Finance for any year? What does the annual report of ISRO to Parliament contain? Can 'The Hindu' estimate the loss or gain to the common man in this country by the MOON MISSION? Every project of ISRO has/had full of technological and financial risks.
A very good article that makes a strong argument about how the Space
Commission could have been aware of the deal. However, its difficult to ascertain whether Cabinet Committee was informed of it or not, and to go further and pull the PMO into this controversy. As long as there is no formal communication, any statements made by people in interviews would remain futile.
Cunning act by the PM O's office, cleaning their hands off the dirt by banning the top Scientist's of India and thereby trying to fool all the Indians that they were nowhere involved or had no idea of what had happened in the Antrix-Devas Deal...!!
This government really needs to be removed from the office now. How can these people waste public money like this? scams after scams...its never ending. We are too premature to even start looking other countries such as China, for development. If we can just look inside and clean ourselves, we will be in much better shape. Won't these ministers will take pride in ruling a developed and well managed nation? seems like they take more pride in the way they embezzle public funds and fool people. What a shame!
thank god that the deal has been cancelled,but this shows that there
might be many such deals under the veil.Bravo CAG! i think we need a
constitutional amendment granting comptrller function to CAG.so that
assesment can be done before hand .I wish a layman could under stand
what the implications of deal cold have been! Yes ,I agree that system wide malfunctioning is there but gov't should take stern action immediately against its official for knowing and also for ignorance.
A proper investigation has to be done on Antrix-Devas Deal as early as possible to find the truth behind it.
A very good analysis . Considering PMO's office to be completely ignorant about the intrinsics of the whole deal does not make a sense when infact PMO's should have been playing important roles in passing of any order . Further , just putting the blame on a few scientists is just an attempt to use them as scapegoat .
ISRO reports to DOS, which in turn to SPACE Commission (SC) and hierarchy ends finally with Union Cabinet led by PM. The DEVAS deal when made was not officially informed to SPACE Commission though as per Mr.Nair people in there knew it. Question could be why didn't ISRO's chairman who is responsible for satellite missions from GOI perspective did not take note of it and have not written any letter to PM as is the case when he has written one after GOI barred him based on CVC report. He should have been proactive if he has smelled something wrong than blaming PMO now. I did not understand why the author hope people in Space hierarchy would intervene here and bring out the facts as there are roles well defined already for each designation in the so called hierarchy?
It seems totally difficult to understand that ministers & bureaucrats
sitting at the helm of affairs, claim their ignorance & aloofness with
the issues involving the public fund earned with huge toiling, & by the
same public which has entrusted them the responsibility & privileges.
Well done Hindu!
--Fixing Responsibility And Prosecution--
I believe Investing Agencies should find out that who are the people responsible for this infamous deal and Investing Agencies should prosecute them in Court Of Law. It is very vital that all the corrupt people in all the departments should be afraid of prosecution; only barring them from government posts is not enough. If their act of omission and/or commission has caused any loss to public, the lost money should be recovered from them.
--Transparent Policies-- Indian Government should make public all the documents related to any Government-Private sector deal. All the terms and condition should also be in public domain. The Parliament should enact a law that “All the documents, including meeting minutes, related to a Government-Private sector deal will be online for at least 10 years and if somebody needs these document after 10 year, he can file an RTI to get it.”