The way in which Valuable S-Band spectrum was allocated to a single private company for an extended period of time, the Antrix-Devas agreement was highly questionable .
The agreement was singned on January 28, 2005 between Antrix Corperation Ltd. the marketing wing of the Indian Space Research Organisation (ISRO), and Devas Multimedia Pvt. Ltd. based in Bangalore. In this agreement Antrix Corperation was sought to provide 2 satellite to Devas which would be used by Devas for Satellite Digital multimedia Broadcast(S-DMB). This services would be used by fixed and portable mobile phones .
As per the agreement ISRO had to build 2 communication satellite. This satellite was then to be leased to Devas for 12 years.
This agreement had some arguable conditions:
1) The communication satellite which were to be build as per the agreement was no single satellite. This kind of satellite was not build by ISRO before. These are specially meant for communication in S-Band Spectrum. There was huge risk in building such satellites considering the Devas contract has stringent penalty clauses for when the satellites must become operational, the quality of service to be provided and tough norms for declaring “a Total Satellite Failure.” In the latter event, a replacement satellite has to be provided within a specified time span at no extra cost to Devas.Experience elsewhere in the world indicates that mobile satellite services in the S- and L-band frequencies have often proved financially unviable.
2) As per CAG the actual cost of the S-Band provided by the deal was worth 2 Lakh Crore.But the antrix made the deal in only around 1500 crore.The note to the Cabinet Committee on Security admitted that this would have not been sufficient compensation for all the costs incurred by ISRO.
3) The way this company was choosen for the control had some controversy consdering Devas is headed by a person who once held a senior position in the space programme and ISRO saying that only this company was having a viable plan for the sort of satellite-based multimedia applications that were envisaged. However, no open competitive process seems to have been even attempted in making such a choice.
Department of Space had to make assure that both Space Commission and Union Govt. was made aware of ISRO deal.
Headed by the Secretary for the Department of Space (who is also chairman of ISRO), this powerful body has top officials from the Central Government among its members.
After the Space Commission gave its clearance, the Union Cabinet approved the building of GSAT-6 in December 2005. Four years later, the Space Commission, under its delegated powers, gave the go-ahead for the follow-on GSAT-6A.
The proposals from the Department of Space seeking approval for the GSAT-6 and GSAT-6A “did not make any reference to their utilisation for the Antrix-Devas agreement,” according to the background note issued by ISRO last February. Only at its July 2010 meeting, when it recommended annulling the contract, was the Space Commission “apprised on this contractual agreement for the first time.”
However, in a recent interview with The Hindu, G. Madhavan Nair, who was chairman of ISRO and Antrix when the deal was signed and approval for the two satellites taken, has said that several people in the government, including from the Prime Minister’s Office, were aware of the details of the deal at every stage.
Besides, there are persons who are members of both the Space Commission and the Antrix’s board of directors. One such individual is the Member (Finance). Another is the Director of the ISRO Satellite Centre that is responsible for building the satellites. So it is difficult to see how the Space Commission could have been entirely in the dark about the deal with Devas.