DEVAS deal annulment only involves upfront costs: ISRO
The Indian Space Research Organisation today said it could annul the agreement with DEVAS Multimedia on allotting space spectrum using S-band - high value and scarce radio waves - and had only to pay upfront costs of Rs 58.37 crore received from the firm.india Updated: Feb 10, 2011 18:37 IST
The Indian Space Research Organisation (ISRO) on Thursday said it could annul the agreement with DEVAS Multimedia on allotting space spectrum using S-band -- high value and scarce radio waves - and had only to pay upfront costs of Rs 58.37 crore (about $13 million) received from the firm.
"ANTRIX may terminate this agreement in the event ANTRIX is unable to obtain the necessary frequency and orbit slot coordination required for operating PS-1 (Primary Satellite-1) on or before the completion of the pre-shipment review of PS-2 (Primary Satellite-2)," the ISRO said.
ANTRIX is a commercial arm of ISRO and had entered into an agreement on allotting the space specturm with DEVAS, a private firm headed by some former ISRO officials.
"In the event of such termination, ANTRIX shall immediately reimburse DEVAS all the Upfront Capacity Reservation Fees and corresponding service taxes received by ANTRIX till that date," the space agency said in a 'background note' on the ANTRIX-DEVAS agreement following allegations that it had caused losses worth billions of rupees.
"To operationalise this agreement, ANTRIX committed to development and launch of two satellites by ISRO referred to as Primary Satellite-1 (PS-1) and Primary Satellite-2 (PS-2) in the agreement."
"DEVAS has so far made a payment of Rs.58.37 crore as upfront capacity reservation fee for the two satellites," the ISRO note said.
The note asserted that "upon such termination, neither party shall have any further obligation to the other party under this agreement nor be liable to pay any sum as compensation or damages (by whatever name called)".
According to the note, the two satellites were yet to be launched and the government was under no obligation to utilise these satellites for the ANTRIX-DEVAS contract.
"The satellites, PS-1 and PS-2, are still being developed by ISRO and have not yet been launched. No transponders have been given on lease to ANTRIX or DEVAS. The government of India has taken no decision on allocation of space segment using S-band spectrum to ANTRIX or DEVAS," the note said.
It said the decision to annul the accord was taken after a review of the need to utilise S-band "in the best national interest because it is needed for strategic and societal communications".
"The S-band spectrum has acquired prominence in recent years because of the growth of mobile phone services and evolution of the concept of digital multimedia via satellites," it noted.
The S-band frequency spectrum has been in use for the INSAT series since 1983 for broadcasting (for Doordarshan) and later for mobile satellite services. In the 1990s, the ITU (International Telecommunications Union) started allocating a segment of S-band for mobile satellite service and land mobiles, the background note said.
The note did not see a hurdle to the annulment of the deal because it agreed to be "responsible for obtaining all necessary governmental and regulatory approvals relating to the orbit slot and frequency clearance".
"It does not mean that orbit slot shall be compulsorily given to ANTRIX by ISRO/government. The central government/ISRO is not duty bound to provide orbit slot to ANTRIX for commercial activities, especially when there are strategic requirements," the note said on the basis of the advice given by the union law and justice ministry and the additional solicitor general.