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Compliance
Scientific Department

Report No. 4 of 2012 - Compliance Audit on Hybrid Satellite Digital Multimedia Broadcasting Service, Union Government, Department of Space

Date on which Report Tabled:
Tue 15 May, 2012
Date of sending the report to Government
Government Type
Union
Union Department
Scientific Department
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Sector Science and Technology

Overview

The Report contains the results of examination of the 'hybrid satellite digital multimedia broadcasting service agreement with Devas' entered into by M/s Antrix Corporation Limited on behalf of the Department of Space and M/s Devas Multimedia Limited. The audit was conducted between July 2010 and June 2011.The report on the hybrid satellite digital multimedia broadcasting service agreement with Devas is a classic case of public investment for private profit.  The Department of Space, in its eagerness, went beyond its remit as laid down in the Allocation of Business Rules, concealed facts from the Union Cabinet and violated numerous rules, policies and procedures.Public interest and those of the Government were sacrificed to favour a private consultancy firm which was promoted by Sh. D. Venugopal and Sh. M.G. Chandrashekhar, retired employees of ISRO.

The Department of Space took upon itself the task of approving the new hybrid S-DMB service which as in the case of DTH services, was the prerogative of the Union Cabinet. Valuable spectrum frequencies, including 10 MHz were to be reserved for strategic purpose,were earmarked for Devas without obtaining approval of the Wireless Planning and Coordination (WPC) wing of DoT.The Department of Space, while seeking approval of the Union Cabinet for the launch of the GSAT-6 satellite in November 2005, suppressed the crucial fact that it had signed an agreement with only one user i.e., Devas and not with different users as mentioned in the Cabinet note.To promote the interest of the private consultancy firm, M/s. Forge Advisors, USA, the Department of Space extended to it a host of benefits.  Seventy MHz of S-band spectrum was earmarked for an indefinite period to Devas ignoring its revenue potential to the Government.  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.38,543 crore revealed that the possibility of obtaining commensurate amounts for providing this commercial service was never explored. The special treatment accorded to Devas is also reflected in the fact that in the case of Devas, DoS decided to use the country-specific scarce orbital slot at 83 East, for two co-located satellites, to be used exclusively bythe private customer.

The Antrix - Devas agreement cherry-picked from two different models15 in a way that extended maximum benefits to Devas.DoS further went on to even revise the contract to 'reassure the investors' so that even before engaging in any trading, manufacturing, ground segment development activity and rolling out of any services,it could raise an amount of Rs. 575.76 crore from foreign investors. There is an expectation that the Government should deliver a high standard of integrity in the civil services, public institutions and public services. There is a need to recognise and deal with conflict of interest issues so that the fundamental integrity of decisions, departments and the Government is not undermined.This conflict is evident in the multiple roles exercised by Dr. G. Madhavan Nair. As Chairman ISRO, he appointed the Shankara Committee to examine the proposals of M/s. Forge Advisors. As Secretary, Department of Space, he submitted a note to the Union Cabinet in which critical facts were concealed.As Chairman, Space Commission, he chaired meetings where approval to GSAT-6 and 6A satellites were accorded.  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 off in the decision-making process.

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