CAG says draft report on 2G loss highlighted possibilities

New Delhi, Nov 3: Against the backdrop of dispute over figures of presumptive loss in 2G spectrum allocation, the CAG has said the draft report which had put Rs 2,645 crore as one of the loss figures could not "conclusively" bring out the potential loss and merely highlighted "possibilities."

The government auditor has also refuted claims that CAG Vinod Rai had discouraged then DG, Audit (Post and Telecommunications) R P Singh - the lead auditor in 2G spectrum allocation - from seeking comments of the DoT which he wanted to include in the final report.

Reacting to suggestions made by some Congress members in meetings of Parliament's Public Accounts Committee (PAC) that Rai had overruled report of Singh, who had put the loss at Rs 2,645 crore on the basis of inflation cost, CAG said the first draft reported prepared by the Delhi branch office of DG (Post and Telecommunications) on April 20, 2010 carried a figure of Rs 48,374 crore as loss on account of allotment of spectrum to 122 licenses issued by the DoT.

The report was redrafted by R P Singh, who calculated "possible figures" of loss using three methods, and forwarded to CAG's office on May 31, 2010, CAG has informed PAC in a note.

The CAG said the figure of Rs 6,5725 crore was worked out on the basis of the offer made by S tel. But the office of the DG (P and T) felt the figure was "invalid" as S tel had withdrawn the offer in the High Court.

"Rs 1,39,229 crore based on 3G auction rates was worked out, of which loss of Rs 36729 crore calculated on the total additional 2G spectrum beyond 6.2MHz spectrum allocated to the operators was included in the report," the CAG said.

Since TRAI had not recommended charging 2G start up spectrum at 3G rates, Rs 1,02,497 was mentioned only in the covering letter.

The report mentioned a third figure of Rs 2645 crore as loss in respect of 122 licenses based on cost inflation index, "without acknowledging the market realities of telecommunication sector."

"It is quite clear that this report could not conclusively bring out the potential or likely loss and only highlighted the possibilities based on various parameters without complete examination of records," the note said.

It said further audit queries were raised with the DoT and relevant records of Finance Ministry were requisitioned and audited by the officers of DG (P and T) before a final draft was prepared after issuing the penultimate draft to DoT and the Finance Ministry in July, 2010.

The note, which has been seen by CAG Vinod Rai, refutes claims that Rai had discouraged Singh - the lead auditor - from seeking comments of the DoT which he wanted to include in the final report.

"There is no question of CAG wanting to prevent DG (P and T) from obtaining comments from DoT...it is part of audit procedure to obtain response...," it said.

PTI