ISRO-Devas S band Scam

Antrix Corporation Limited is a public sector undertaking and a commercial arm of Department of Space, Government of India and Devas Multimedia Private Limited is a privately owned company having few ex-ISRO officers as its employees. They entered into an agreement on 28-01-2005 after 2 years of negotiation. As per this agreement, Antrix leases 90% capacity of S band spectrum for 12 years. For this purpose ISRO will launch two satellites GSAT-6 and GSAT-6A to Devas. The amount payable by Devas is $300 million over a period of 12 years. There are also penalty charges to be paid by Antrix in case of late delivery of satellite or performance failures or service interruptions.
Antrix Corporation
Antrix Corporation Limited was incorporated as private limited company owned by Government of India in September 1992 as a marketing arm of ISRO for promotion and commercial exploitation of space products, technical consultancy services and transfer of technologies developed by ISRO.
To implement the 2005 agreement, ANTRIX committed to develop and launch two satellites by ISRO. They are GSAT-6 and GSAT-6A.
Chairman, ISRO/Secretary, Department of Space is the Chairman of Antrix Borad that has 6 directors from ISRO and DOS and 3 external directors Shri. Ratan Tata, Shri. J.N.Godrej and Shri Ravindra Reddy (MD, MTAR).
Madavan Nair was the Chairman, ISRO / Secretary DOS of Antrix Board when the deal was signed.
Devas
Antrix signed a MOU in March 2003 with Forge Advisors, USA to explore opportunities in digital multimedia services. Later, principals of Forge Advisors, USA established an Indian company called Devas Multimedia Services Pvt Ltd. In 2008, Deutsche Telekom, Germany also obtained minority stake in it.
Agreement Cost
According to this agreement, Devas provides an upfront capacity reservation fee of US$20 million per satellite and annual lease charges starting at US$9 million per satellite and going up to US$11.25 million. The amount payable by Devas is US$300 million over a period of 12 years. Devas so far made a payment of Rs.58.37 crore as upfront capacity reservation fee for the two satellites.
BN Suresh Committee
On receipt of complaints, ISRO set up a committee in December 2009 chaired by Dr. B. N. Suresh, mandated to review and examine, legal, commercial, procedural and technical aspects of this agreement. The exact recommendations of this committee have not been made public.
Space Commission Review
The Space Commission on 2 July 2010 directed Antrix Corporation to annul this agreement citing the need of S Band for strategic requirements, including societal ones which have come up very recently and which were not contemplated at the time of signing the Agreement.
Annulment of Agreement
The Cabinet Committee on Security headed by Dr. Manmohan Singh, Prime Minister of India, annulled this agreement on 17-Feb-2011 citing strategic requirements.
High Power Review Committee (HPRC)
In parallel to the decision to annul the agreement, the Government of India constituted HPRC to review technical, commercial, procedural and financial aspects of this agreement consisting of Shri. B. K. Chaturvedi, Member of Planning Commission and former Cabinet Secretary and Prof Roddam Narasimha, Member Space Commission.
S Band
S Band terrestrial spectrum is extremely valuable for mobile broad band services as well as satellite services. The frequency which encompasses 2.0-2.7 GHz band is globally used for providing a wide variety of services: mobile broad band services using 4G technologies such as WiMax and LTE, WiFi, mobile satellite services, among others.
The Agreement, however, is only for satellite-based S-Band capacity. Experts have opined that there is a fundamental difference between application and usage of satellite and terrestrial based spectrum, and hence they are not comparable.
Loss to government exchequer
The Hindu/Business Line first reported this deal stating that it will lead to a loss of Rs 2 lakh crore to the Indian government if it was implemented. However, the Comptroller and Auditor General of India (CAG) has clarified that, “it can by no stretch of imagination, be concluded that information as given in the media reports are findings of this department”
Parliament Estimates Panel Enquiry
The Parliament Estimates Panel is examining this deal at present
List of Actions Taken
1. ISRO-Devas deal was annulled due to strategic reasons.
2. Chairman, ISRO / Secretary, DOS was stripped off from holding the post of Chairman, Antrix Board.
3. Lack of check and balances by PMO was noted.
Chairman of ISRO when the deal was implemented
G. Madhavan Nair
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Devas is ready for arbitration and ICA is one possibility for restoration of its contract with Antrix so that it may be compensated for the losses incurred.

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