CAG nails ex-Isro chief in Devas deal

It was public investment for pvt profit
Last Updated 15 May 2012, 20:51 IST
The controversial Antrix-Devas agreement is a “classic case of public investment for private profits” in which Indian Space Research Organisation (Isro) led by G Madhavan Nair hoodwinked the Union Cabinet headed by the prime minister.

Nair reportedly bent every rules in the rule book to favour a company promoted by former Isro employees.

In its report tabled in Parliament on Tuesday, the Comptroller and Auditor General (CAG) accused the Department of Space of going beyond its remit as laid down in the Allocation of Business Rules. 

The report further blamed the department for concealing facts from the Union Cabinet, violating numerous rules, policies and procedures, and sacrificing the government interest by favouring the deal.

The 2005 commercial contract between Devas Multimedia Ltd – set up by the US-based Forge Advisor – and Isro commercial arm Antrix was to offer satellite digital multimedia broadcasting service for delivery of video, multimedia and internet via satellite.

As Devas services were better than comparable services like DTH and 4G and an improvement over 3G, it had considerable fiscal potential and could fetch substantial thousands of crore for the government if the auction route was followed.

Instead, a group of Isro scientists and bureaucrats favoured Devas by blocking-off concerns in the decision making process. Donning multiple hats as Chairman Isro, secretary in the Department of Space; chairman in the Space Commission and chairman of INSAT Coordination Committee Nair ignored multiple “conflicts of interests” in securing the Cabinet approval for it.
While seeking the Cabinet approval, Isro suppressed the crucial fact of signing a prior agreement with Devas for leasing out almost all transponders in the Rs 269-crore satellite, GSAT-6.

In the case of GSAT-6A, a payload with similar configuration, Isro kept the cost at Rs 147 crore so that it fell within the financial competence of the Space Commission, headed by Nair, and there was no need to go to the Cabinet again.

“The Antrix-Devas deal is a classic instance of failure of the government structure in which selected individuals were able to successfully propel the agenda of a private entity by arrogating unto themselves, powers which they were not legitimately authorised to exercise,” says the CAG report.

The fact that a group of individuals was able to conceal facts and sidestep the Cabinet is a testimony to the extent of abuse of the trust reposed on them, the report added.

Cherry-picked from two different contract models in a way that extended maximum benefits to Devas, the deal with Isro helped Devas raise Rs 575.76 crore from market without engaging in any trading, manufacturing and ground segment development.

There are 16 specific instances wherein Isro favoured Devas in its transponder lease agreement as against corresponding terms of other transponder lease agreements.
After the controversy broke out almost three years ago through a draft CAG report, the government annulled the contract, for which the Devas claimed a Rs 8,240 crore compensation from the Isro .

The Central government set up two high level panels to review the deal. The second team headed by Pratyush Sinha, former chief vigilance commissioner, held eight persons guilty, including Nair.

Besides the former Isro  chairman, other scientists include: A Bhaskarnarayana, K R Sridhara Murthy and K N Shankara. Four bureaucrats, who too were found guilty, are: S S Meenakshisundaram, Veena Rao, G Balachandhran and R G Nadaur. Appropriate action was suggested against all of them.

The indictment

* CAG report terms Antrix-Devas agreement a “classic case of public investment for private profits” 

* Isro led by G Madhavan Nair accused of hoodwinking Union Cabinet

* Nair charged with flouting rules to favour firm promoted by former Isro employees

* The report blames the Department of Space for concealing facts from the Cabinet

(Published 15 May 2012, 09:48 IST)

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