Author: Paranjoy Guha Thakurta
Publication: Outlook
Date: November 9, 2009
URL: http://www.outlookindia.com/article.aspx?262570
Introduction: Tell-tale flotsam establishes
A. Raja's culpability in the telecom scam
Andimuthu Raja has chosen to brazen it out.
But are his days as Communications and IT minister numbered? The Congress-led
upa today needs the support of the dmk less than it ever has since May 2004.
After the cbi raids, there is no doubt that the spectrum scam, running into
more than Rs 50,000 crore, is turning out to be an embarrassment for the government.
Raja says he consulted the PM and Pranab Mukherjee
while allotting mobile phone licences with spectrum on a 'first-come-first
served' (fcfs) basis-significantly, he does not categorically say they approved
his decisions. Neither has Manmohan Singh really said he approved of what
Raja did. The PM merely said allegations raised by the Opposition are not
always correct and that he would not publicly discuss what transpired in cabinet
meetings.
Raja also says the solicitor-general (now
attorney-general), Goolam E. Vahanvati, approved his decision to bring forward
the cutoff date to receive applications for licences. What he does not say
is that the Delhi High Court has stayed this decision. Raja takes refuge in
the National Telecom Policy of 1999, a cabinet decision of the Vajpayee government
in 2003, and a single paragraph in a set of recommendations made by the regulator
trai in 2007 that runs into 178 pages, to claim that he followed in the footsteps
of his predecessors and the regulator's guidelines. These are, at best, half-truths.
Successive documents put out by trai had recommended
open auctions for allocation of scarce spectrum. The regulator's suggestions
have been cherry-picked and ignored to enable foreign companies to pick up
equity stakes in Indian companies-conclusively (and ironically) establishing
that each all-India licence that was given in January 2008 for Rs 1,651 crore
(or prices determined in June 2001) had an actual market value that was six-seven
times higher.
What Raja cannot justify is that two of the
biggest beneficiaries of his decisions are real estate firms (Swan and Unitech)
with no experience in telecom and which had close relations with him in his
earlier avatar as Union minister of state of environment and forests.
On September 25, 2007, hours after Unitech
put in 22 applications in the name of eight companies, the cutoff date was
brought forward through an innocuous three-line press note. In three working
days, 373 additional applications were received from local firms, not global
players. Still, he chose not to accept new applications. Raja waited until
D.S. Mathur, the then secretary, DoT, and Manju Madhavan, member, finance,
Telecom Commission, (who had both resisted his moves) were out of the way-the
former retired and the latter retired prematurely-and a new secretary, Siddharth
Behura, was appointed on January 1, 2008, before letters of intent were issued.
Is it not true that the pmo engaged the DoT
in November 2007 (as did the law ministry) calling for the establishment of
an empowered group of ministers to award licences? And that Raja refused to
oblige on the specious plea that only "procedures" had to be decided,
not "policy issues"? Further, the then finance secretary, D. Subbarao
(now rbi governor), wanted the DoT to stay its actions, but he too was ignored.
Raja's claim that high spectrum prices would
increase charges paid by consumers is not borne out by facts. Despite Vodafone
paying $11 billion (nearly Rs 55,000 crore) for a 67 per cent controlling
stake in Hutchison Essar in February 2007, telecom tariffs have crashed by
nearly a third since then.
Raja cannot deny that on January 10, 2008,
at 2.45 pm, an announcement was posted on the website of the DoT stating that
letters of intent would be issued to companies between 3.30 pm and 4.30 pm
after they paid huge application fees immediately by demand draft with supporting
documentation. Nor can he deny that a mad melee ensued that afternoon in the
corridors of Sanchar Bhavan-well-heeled ceos were manhandled by bouncers hired
by their business rivals before the cops turned up, late as usual.
Raja also knows that the central vigilance
commissioner wrote to DoT secretary Behura on November 15, 2008, asking him
"not to lose sight of the malfeasance and moral indifference in pursuing
with the decision" to allot licences and spectrum on an fcfs basis to
companies that subsequently sold their stakes at fancy prices to foreign firms.
What is the PM waiting for? Will he call Raja's bluff? Or will he continue
to maintain silence over Raja's claims that imply that the PM and some of
his senior colleagues were accomplices in the biggest scandal in independent
India?
(The writer is an independent journalist and
educator.)
