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ISRO S-Band Scandal Grows

By Doug Messier
Parabolic Arc
February 10, 2011
Filed under

ISRO is in deep trouble over an insider deal it made involving to allocate valuable S-band spectrum to capabilities with a well-connected media company. The furor over the controversy has been growing daily as critics and government officials spar over details and responsibility.

The 2005 deal between Devas Multimedia and ISRO’s commercial arm, Antrix, involves the space agency building two S-band satellites, GSAT 6 and GSAT 6A, and the company leasing 90 percent of capacity getting use of them to deliver Internet services. ISRO did not actually allocate S-band spectrum to the company, but provided capacity on the satellites to use the spectrum. The scarce S-band spectrum was provided to deal was made with Devas with no competitive bidding. Devas includes two former high-ranking ISRO officials.

Critics have attacked the no-bid deal as having cost the government millions of dollars while benefiting a well-connected company. They view it as yet another example of the deep corruption afflicting the government of Prime Minister Manmohan Singh.

Officials from ISRO and Singh’s government have been scrambling to explain the agreement and their actions concerning it since the scandal broke wide open. Officials have various issued statements and clarifications, few of which seem to address directly the corruption charges hanging over the deal. There are conflicting claims about who did what, and who knew what and when.

Citing recent terrorist attacks, officials have said the government needs the S-band spectrum for emergency purposes. This consideration, they claim, is driving their ongoing effort to cancel the agreement. A decision is expected soon:

Sources said a recommendation to annul the deal will be accepted by the Union Cabinet next week. Sources said a cornered prime minister has asked officials to put the issue on the agenda of the Cabinet as early as next week to deflect rising criticism on a matter concerning a department directly under his control and having huge financial implications.

ISRO officials have said that the process of terminating the contract is complicated and time consuming. It could be quite costly as well:

The contract has many penalty clauses including $20 million as “upfront capacity reservation fee,” $9 million on annual lease fee (which Devas would have to pay to Isro had it hired the transponders on-board the satellite) and delayed delivery penalty of $5 million. Devas was to use the GSAT transponders for 12 years.

But how much Isro would actually have to be pay would depend on the legal stand Devas Multimedia takes after analysing the controversy and the actual progress made in the GSAT 6 project, sources said.

The penalty may include the possible revenue loss, which Devas anticipated from the satellite-based services it planned to launch using the high-power spot-beam in the S-band such as satellite-based internet access. The taxes and service charges Devas has paid so far may be added too.

There seems to be great surprise that such a scandal is taking place at the widely respected ISRO, which is a symbol of India’s high-tech prowess and global rise. The space agency’s achievements in space are a source of great national pride.

I’m not sure why they are surprised. The space agency is not particularly open or candid about its taxpayer-funded work. During the Chandrayaan-1 mission, ISRO went to great lengths to downplay problems with the lunar probe. For example, the agency doubled the spacecraft’s orbit claiming that all work at the lower altitude had been completed. This was false; the real reason was a major system failure that made the spacecraft difficult to control at its original altitude. This news didn’t become public until two months later.

One hopes that the outcome of this scandal is that ISRO operates more responsibly in the future, and that it is more accountable to the people for whom it work.