Devas deal broke rules to push private agenda: CAG

“The Antrix-Devas deal is a classic instance of failure of the governance structure in which selected individuals,some serving and some retired public servants,were able to successfully propel the agenda of a private entity by arrogating unto themselves powers which they were not legitimately authorised to exercise,” the report said.

Making a note of the multiple roles exercised by Nair,the CAG report says that this could have been avoided if different persons were appointed to crucial posts to ensure checks and balances.

The report criticises the Department of Space (DoS) for its “failure to explore” the revenue potential of 70 MHz of S-Band spectrum earmarked for Devas for an infinite period. It says the DoS “went beyond its remit” as laid down in the Allocation of Business Rules.

On the role of Nair,the report observes that as ISRO chairman,he appointed the Shankara Committee to examine the proposals of M/s Forge Advisors and as secretary,DoS,he submitted a note to the Union Cabinet in which critical facts were concealed. Besides,as chairman,Space Commission,he chaired meetings where approval to GSAT-6 and 6A satellites was accorded,it noted.

“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 in the decision-making process,” the CAG report says.

The same person holding posts of chairman,ICC; chairman,Space Commission; secretary,DoS; chairman,ISRO; and chairman-cum-managing director,Antrix,clearly led to a conflict of interest.

“Public interest and that 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 adds,noting that the DoS took upon itself the task of approving the new hybrid S-DMB service,which was the prerogative of the Union Cabinet.

It also accuses the DoS of concealing the fact at the launch of the GSAT-6 satellite in November 2005 that it had signed an agreement with only one user i.e. Devas and not with different users,as mentioned in the Cabinet note.

Further,to avoid obtaining approval from the Cabinet,the DoS estimated the cost of GSAT-6A,the subsequent satellite of a similar configuration after GSAT-6,at Rs 147 crore. At this price,it fell within the financial competence of the Space Commission,while the cost of GSAT-6 was Rs 269 crore.

The CAG also says that in earmarking 70 MHz of S-Band spectrum for an indefinite period to Devas,the DoS had ignored its revenue potential to the government.

“Subsequent events like the auction of 3G in which the government received Rs 67,719 crore and the auction of Broadband Wireless Access where the government received Rs 38,543 crore revealed that the possibility of obtaining commensurate amounts for providing this commercial service was never explored,” it said.

The special treatment to Devas,as the CAG calls it,also reflected in the fact that the DoS decided to use the country-specific scarce orbital slot at 83 deg east for two co-located satellites,to be used exclusively by the private customer.

It felt even the revision of the contract was done to “reassure the investors” so that even before rolling out of any services,Devas could raise an amount of Rs 575.76 crore from foreign investors.