S-band deal: Has ISRO been defying the government?

New Delhi: After an embarrassing disclosure over valuable S-Band spectrum being virtually gifted to a private company by the Indian Space Research Organization (ISRO), the government has set up a review committee to examine the deal. (Read: In official note, ISRO explains S-Band deal)  

Yesterday, ISRO chairman Dr K Radhakrishnan said the deal is in the process of being cancelled. But given that different ministries and objections began raising objections to the contract more than three years ago, the government now finds itself struggling to explain why it's taking so long to pull the plug.

In 2005, the commercial arm of ISRO, Antrix, signed a contract with Devas Multimedia, to build two satellites on which Devas would lease transponders in India. Bundled into the deal was 70 MHz of S-band spectrum which was priced at 1000 crores - a sweetheart deal.  

Because ISRO reports directly to the Prime Minister's Office, the controversy - which erupted in the media this week - has been especially worrying for the government.

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The explanations offered so far for a contract loaded in favour of Devas have been awkward at best. Dr Radhakrishnan said yesterday that after it became clear that spectrum was needed by national agencies, in 2009 the Space Commission began reviewing the deal and in July 2010, a decision was taken to annul the contract.

Devas says it is totally unaware of this. In a statement today, the company stressed, "Devas has never been informed by DOS/ISRO/Antrix at any time prior to February 8, 2011 that the Agreement was under review since December 8, 2009 and even to date we have received no official notices. On the contrary Devas was provided written confirmation that all required approvals had been obtained from the highest levels for giving effect to the Agreement  and repeatedly assured that the delays in delivery of the satellite capacity were only on account of technical issues."

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As far back as 2 July, 2010, the Space Commission had decided to scrap the contract but surprisingly Antrix continued to take the project forward. Antrix and Devas continued to meet on the project as late January 2011.

In fact, representatives of Antrix met Devas executives three times in the last eight months - the most recent meeting was earlier this month. And documents suggest that ISRO was ploughing ahead to meet its contractual commitments.

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The government has to spell out what part of this - if any - it was aware of. Dr Radhakrishnan said yesterday that the Cabinet in 2005 was not informed that the two satellites that it was clearing were for use by Devas, or that there was a whopping amount of spectrum being offered to the company. So what exactly did the Cabinet believe it was sanctioning? It's fundamentals like that which the review committee set up today will look at - its official mandate is to "review the technical, commercial, procedural and financial aspects" of the agreement, signed in 2005, and "to fix responsibility for lapses".

However, it can be argued that both members of the review committee have a conflict of interest. B K Chaturvedi was Cabinet Secretary in 2005 when Devas Multimedia was allowed access to 70MHz of spectrum for 1000 crores by ISRO's commercial arm, Antrix. (Watch: BK Chaturvedi speaks to NDTV on S-Band deal probe)

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Also on the committee - Roddam Narasimha - a long-standing member of the Space Commission which signed off on the deal. 

Both Mr. Chaturvedi and Mr. Narasimha therefore participated in the approval process for the Antrix-Devas deal. The committee they now form will report to the PM within a month with their post-mortem. Mr Chaturvedi said allegations - raised by the BJP among others - that he will not be able to conduct an impartial inquiry are "bunkum." Ambika Soni, Minister for Information and Broadcasting, said, "He (Chaturvedi) would know what happened, why it happened and what are the reasons behind the measures that were taken... I do feel that individuals assess the situation, rising above the fact that they were occupying a particular post unless you are personally a beneficiary."