New Delhi, Feb 17 (PTI) Government today scrapped thecontroversial S-Band spectrum deal between ISRO''s commercialarm and a private company on grounds of strategic interest andsaid it was prepared to face legal consequences.
The Cabinet Committee on Security (CCS), chaired by PrimeMinister Manmohan Singh, decided to annul the contract Antrix,the commercial arm of ISRO, had entered into with DevasMultimedia underwhich it was to lease out 90 per centtransponders on two of ISRO''s satellites GSAT-6 and GSAT-6A.
"The Agreement for the lease of space segment capacity onISRO/Antrix S-Band spacecraft by Devas Multimedia Pvt. Ltd.
entered into between Antrix Corporation and Devas MultimediaPvt. Ltd. on 28th January, 2005 shall be annulled forthwith,"announced Law Minister Veerappa Moily after the meeting.
He said when the question of strategic requirementarises, the government cannot give S-band spectrum even toAntrix for commercial use.
"We have thoroughly examined this matter and ultimatelywe have come to the conclusion that under provisions of theagreement and the law governing that, it can be annulled," hesaid when asked whether the impact of the decision wasdiscussed by the CCS.
Under the agreement signed in January 2005, Devas was tolease transponder capacity from the two satellites at a costof USD 300 million (approximately Rs 1350 crore) spread over12 years.
Some estimates said the deal was heavily undervalued,which triggered an uproar with the Opposition partiesattacking Prime Minister Manmohan Singh, who is directlyincharge of the Department of Space, over selling the preciousspectrum to a private firm cheaply.
Devas Multimedia had yesterday threatened to move courtif the government took any unilateral decision to terminatethe deal.
"Even if they go to court, they are not likely tosucceed," Moily said when asked whether the government wasready to face the legal challenges put up by Devas.
Joining issues on the deal, Defence Minister A K Antonytold reporters today that a "mistake" was committed inreaching the deal without consulting the defence forces asS-Band spectrum was mainly for the strategic forces in whichthe country''s three services got a major stake.
S-Band was spectrum was a "very precious asset for us"and has to be given to the armed forces, paramilitary andother strategic forces, he said. (More) PTI SKU AKK AJD NAB