New Delhi: The Antrix-Devas deal, which was scrapped in February last year after being subjected to criticism, was a “classic instance of failure of the governance structure” that allowed public servants to promote the agenda of a private company, said the Comptroller and Auditor General of India (CAG), India’s top audit body.
The CAG report, presented in Parliament on Tuesday, found the department of space went beyond its remit and concealed facts from the cabinet and violated rules, policies and procedures in approving a commercial agreement between Antrix Corp. Ltd, the commercial wing of the state-run Indian Space Research Organisation (Isro), and Bangalore-based Devas Multimedia Pvt. Ltd.
Isro campus in Bangalore. By Hemant Mishra/Mint
“Public interest and those of the government were sacrificed to favour a private consultancy firm,” which was promoted by two retired employees of Isro, the report said. The deal involved Isro leasing transponders using the S-band (2.5-5GHz) on two satellites—GSAT6 and GSAT6A—scheduled to be launched by it by 2013. Devas was to use these transponders for multimedia broadcasting purposes.
The report said the department of space extended a host of benefits to M/S Forge Advisors of the US to promote Devas’ interests. A memorandum of understanding (MoU) was signed between Antrix and Forge for partnership and positioning of Devas in the global satellite market in July 2003 a few months after Forge gave a presentation to the department of space about the potential of the S-band.
The leak of the audit body’s preliminary report sparked off a controversy that stemmed from what was perceived as the grant of free spectrum, a scarce resource at the centre of the 2G scam. Media reports said the initial CAG audit cited a presumptive loss of Rs 2 lakh crore. The controversy led the government to scrap the deal.
“Seventy MHz of S-band spectrum was earmarked for an indefinite period to Devas ignoring its revenue potential to the government,” said the report. “Subsequent events like the auction of 3G, in which the government received Rs 67,719 crore, and auction of Broadband Wireless Access, where government received Rs 28,543 crore, revealed that the possibility of obtaining commensurate amounts for providing this commercial service was never explored.”
The report said former Isro chairman G. Madhavan Nair had a “conflict of interest” that arose from his holding multiple posts, CAG said. “The government would have to ensure that the same person does not hold all the crucial posts and different functionaries are appointed to ensure checks and balances.”
Telephone calls to Nair’s cell phone and residence remained unanswered. A text message also did not elicit any response. A Devas spokesperson declined to comment.
The report said Nair, who appointed the Shankara committee to examine the Forge proposals, had submitted a note to cabinet that concealed critical facts. He also failed to convene the Indian National Satellite (Insat) coordination committee, of which he was chairman, which resulted in key officials being “blocked off” from the decision-making process. The committee is responsible for the overall coordination and management of the Insat system.
After signing the deal, amendments were made to the contract, which further benefited Devas, CAG said.
Isro comes under the department of space, one of the portfolios held by Prime Minister Manmohan Singh. The main opposition Bharatiya Janata Party (BJP) has targeted Singh over the issue.
The government had appointed a committee headed by former chief vigilance commissioner Pratyush Sinha to inquire into the deal. The panel had recommended administrative action in September last year. Following this, four former Isro officials found responsible for the irregularities were barred from any further engagement with the government.