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PAC seeks probe into allocation of satellite capacity to private DTH ops

MUMBAI: The Public Accounts Committee (PAC) has called for a probe into alleged wrongdoings by the Department of Space (DoS) in allocating satellite capacity to private direct-to-home (DTH) operators which resulted in loss of revenue to the public exchequer.

The cases, which was flagged by the Comptroller and Auditor General (CAG) in 2014 and later by PAC in 2016, date back to more than a decade when the private DTH sector was witnessing a flurry of activity with the entry of new players.

In its 71st report titled ‘Management of Satellite Capacity for DTH Services by Department of Space’, the committee has directed the DoS to conduct inquiries into out-of-turn allocation of satellite space and the grant of exclusive first right of refusal for using Ku-band transponders at 83 degrees east of GSAT-10 satellite to Tata Sky.

It also asked the DoS to conduct a probe into the undue favour given by Antrix Corporation, the commercial arm of ISRO, to private DTH operators by not collecting transponder lease charges in advance leading to accumulation of transponder lease charges to the tune of Rs 62.5 crore.

Another issue flagged by PAC is the non-revision of transponder lease charges levied against DTH operators by the DoS that led to a loss of Rs 36.17 crore.

The committee noted that DTH transponder lease agreements had a lease period of 5–10 years with no provision for revision of prices whereas lease agreements with foreign satellites ranged from 1 to 6 years with provision for price revision from 5% to 33%.

The committee also asked for a probe into 1.5 months’ bonus period provided by the DoS to Sun DTH, which resulted in a benefit of Rs 3.56 crore to the DTH company.

Reiterating their earlier recommendation, the committee desired that the department/ministry concerned earnestly fine-tune their system for allocating satellite capacity and to reduce the time taken for clearances/approvals from the stakeholders and intimate this committee about the developments in this area.

Out-of-turn allocation of satellite capacity to Tata Sky

PAC asked the DoS to thoroughly investigate through an external agency the out-of-turn allocation of satellite capacity to Tata Sky and appraise it of the outcome.

The committee noted that while Tata Sky was fifth in order of preference of satellite capacity allocation, it was granted precedence on INSAT-4A and given exclusive rights at the prime slot of 83 degrees east in December 2005 superseding Doordarshan (DD) which was later allocated capacity on INSAST-4B launched in January 2007.

The committee further noted from the submission of the DoS that DD was allocated satellite capacity on a foreign satellite before allocation of capacity to Tata Sky on INSAT-4A and DD migrated to INSAT-4B at the end of the contract period.

Expressing shock, the committee noted that the national broadcaster was allocated capacity on a foreign satellite and then a private broadcaster was given exclusive rights on INSAT-4A. The committee observed that the national broadcaster being the first in precedence should have been given preference on Indian satellite being a free to air service accessed by majority of population across India and also has an obligation towards the citizens of this country.

It also noted that the charges paid to a foreign satellite for usage by Doordarshan was a wasteful expenditure, more so, since Tata Sky could not be retained on INSAT-4A in addition to the revenue forgone fearing litigations by Tata Sky, taking advantage of its first right of refusal.

The committee asked the DoS to provide reasons for apparent favoritism towards Tata Sky and further desired that punitive action may be taken against all those responsible for the same.

The MIB on its part submitted to PAC that the Doordarshan started their test services in a foreign satellite during June 2004. During this period, the INSAT/GSAT system did not have high power Ku-band satellites. The decision to start the DTH services was taken by Doordarshan. After examining the options of starting DTH services in INSAT- 4A satellite. ICC has also noted this decision in its 68th meeting held on 17 June 2004.

In view of the above justification, the submission of the Department may be considered favourably, the MIB submitted.

Grant of exclusive rights over prime orbital slots

The committee further expressed displeasure that their recommendation for conducting an enquiry in grant of exclusive rights over prime orbital slots to Tata Sky and taking action against the guilty within a period of three months has not been paid heed as the MIB has set up a committee after a passage of the deadline.

The committee said it would like the matter to be thoroughly investigated through an appropriate agency and apprised of the outcome thereof.

The DoS had given Tata Sky the exclusive first right of refusal for using Ku-band transponders at 83 degrees east of GSAT-10 satellite, which allegedly gave it a very advantageous position over other DTH service providers.

Due to this, the Ku-band transponders of GSAT-10 could not be allocated to any other DTH service providers and remained idle thereby causing a loss of Rs 60 crore per year to the exchequer.

The committee hoped that the committee formed for investigating the matter will conduct a detailed enquiry in the matter to bring out the truth and to take punitive action against those found responsible.

It also expressed unhappiness with the DoS for non-furnishing of information relating to the conduct of an enquiry in to the grant of exclusive right over the prime slot of 83 degree east to Tata Sky and to take stern action against the guilty persons within three months of the presentation of the Fortieth Report.

Outstanding dues from back-to-back agreements

The committee has also called for an enquiry into Antrix’s decision for not collecting advance payment as per the transponder lease agreements which led to undue favour to DTH operators and accumulation of transponder lease charges.

The DoS arranged foreign satellite capacity to Indian DTH service providers for short term period through Antrix as a temporary measure to ensure that the service could be brought back to INSAT system when Indian satellite capacity was eventually available.

The DoS entered in back to back agreements for Dish TV, Sun DTH, Airtel, Reliance and Videocon. The transponder lease charges to the tune of Rs 62.55 crore remained to be recovered from these parties.

The committee recommended that erring officials be identified and accountability be fixed on them by means of punitive action and also a thorough investigation be done by agencies such as CBI, DRI, ED, etc. to further probe the matter and bring the guilty parties to justice.

It further noted that till March 2014, an amount of Rs 57.17 crore was recovered and the balance Rs 5.38 crore was still to be collected.

The committee sought information about the action taken by the DoS to collect the outstanding amount of Rs 5.38 crore.

The committee felt that satellite capacity allocation contributed a handsome amount of revenue to the government treasury, and the DoS faltering in administering established rules and procedures leading to the flow of revenue was totally unacceptable.

It insisted that a robust system of internal control should be established while making financial transactions and desire that SOPs in this regard may be issued urgently. They desire to be apprised of the findings of the committee proposed to be constituted to look into the matter.

Loss due to non-revision of transponder charges

The committee expressed dismay that despite their recommendation to set up an inquiry by the DoS to consider the lease agreements with various parties and take stringent action against those responsible for agreeing to terms that were against the interest of the exchequer and apprise them of the action taken within three months of the presentation of Fortieth Report (16th Lok Sabha), the DoS has not initiated any action as yet.

Instead, the DoS has submitted that the lease agreements with foreign satellites were entered for a short-term period and to examine periodic revision clause, a committee would be constituted.

The committee reiterate that the price revision clause should be incorporated in all the transponder lease agreements which extends beyond one year irrespective its entire term. The committee, therefore, reiterate their earlier recommendation that the service providers be charged at competitive rates and the lease term should also be uniform for everyone ensuring level playing field across the DTH sector thereby leading to more transparency and healthy competition and further desire that the committee be apprised of the action taken in this regard.

Allocation of bonus time

On the issue of allowing bonus free period of 1.5 months to Sun DTH which resulted in a benefit of Rs 3.56 crore to Sun DTH, the committee found the reply of the DoS untenable that Standing Committee of the DoS had taken such a decision as Sun DTH could not get regulatory clearances from Network Operating Control Centre (NOCC)/DoT for uplink in first three months.

The committee further noted that DoS demand for payment for the bonus free time earlier ended in Sun DTH, initiating arbitration proceedings and bringing out an injunction from the Madras High Court.

The committee is of the view that the government collectively was responsible for such a situation wherein the DoS had to bear costs to save the commercial interests of the service providers for retaining them.

The committee, therefore, recommended that the Government of India should streamline all the necessary procedures relating to satellite capacity allocation, especially the clearances and approvals from the concerned Ministries in a time bound manner.

The committee felt that exemplary disciplinary action be taken against the then officials who did not give approvals in stipulated periods.