Devas to govt: Move to scrap deal questionable

Devas Multimedia has written a letter to the Department of Space, questioning the rationale behind the government’s move to scrap its deal with Antrix, the commercial arm of the Indian Space Research Organisation (Isro). The letter has been sent at a time when the Parliament’s Committee on Estimates is examining the allocation of S-band spectrum by Isro to Devas.

Devas will explore legal options, if the government fails to explain why without citing any proper reason, the deal had been annulled, the company is learnt to have indicated. According to officials, the company is yet to get a response from the government.

Devas Chief Executive Officer Ram Viswanathan declined to comment. However, he had earlier said Devas’ agreement with Antrix was “legally binding” and “the government’s unilateral decision without due investigative process and without following the principles of natural justice is disturbing and inappropriate.”

The Cabinet Committee on Security had on February 17 officially annulled the deal, stating that due to the country’s strategic requirements, it would not be able to provide orbit slot in S-band to Antrix for commercial activities.

Under the deal, Antrix was to provide 70 MHz of the scarce S-Band space segment to Devas for its digital multimedia services. This was to be done by leasing 90 per cent of the transponders in satellites GSAT-6 and GSAT-6A, proposed to be launched by Isro.

In 2005, Antrix signed a contract with Devas to build two satellites on which Devas would lease transponders in India. Bundled into the deal was 70 MHz of S-band spectrum.

After news reports about the possible revenue loss appeared, the government and Isro said the project was under review and action had been initiated to terminate the contract. In December 2009, Isro ordered a review of the deal and subsequently, the Space Commission recommended its annulment on July 2, 2010.

There are clauses in the contract under which the government can annul the agreement. However, the clauses specify that Antrix has to pay Devas Rs 58 crore should the deal be scrapped. This is the amount Devas has so far paid as upfront capacity reservation fee for the two satellites.