The government on Thursday announced the scrapping of the controversial contract between Isro’s commercial arm, Antrix Corporation, and Devas Multimedia due to strategic reasons.
Briefing reporters after the meeting, law and justice minister M. Veerappa Moily said the Cabinet Committee on Security (CCS) decided to annul the contract that Antrix had entered into with Devas. “The agreement for the lease of space segment capacity on Isro/Antrix S-Band spacecraft by Devas Multimedia Pvt. Ltd, entered into between Antrix Corporation and Devas Multimedia Pvt. Ltd on January 28, 2005, shall be annulled forthwith,” Dr Moily said.
“When the question of strategic requirement arises, the government cannot give S-band spectrum even to Antrix for commercial use,” the minister said, adding that the decision to annul the agreement was taken after careful examination of the matter.
On the alleged threat of Devas Multimedia to move court if the government took any unilateral decision to terminate the deal, Dr Moily said if the company went to court they are “unlikely to succeed”.
Explaining the need to scrap the agreement, an official statement said there has been an increased demand for allocation of spectrum for national needs, including that for the needs of defence, paramilitary forces, railways and other public utility services, as well as for societal needs. “In view of the country’s strategic requirements, the government will not be able to provide orbit slot in S-band to Antrix for commercial activities, including for those which are the subject matter of existing contractual obligations for S-band,” Dr Moily informed.
The law minister explained that resorting to the force majeure clause of the agreement was one of the options before the government to cancel the deal.
After the controversy regarding possible revenue loss due to the deal, the government had said the project was already under review and action had been initiated for termination of the contract.
The Prime Minister had on Wednesday reiterated that the deal had never been operationalised and rejected suggestions that his office had held “back-room talks” with Devas after the Space Commission’s recommendation that the deal be cancelled.
Meanwhile, defence minister A.K. Antony on Thursday said, “They (Isro) committed a mistake, the government has corrected it. We (the MoD) were not consulted. The S-band is mainly for strategic forces in which our Army, Navy and Air Force have a major stake because it is a precious asset for us.”
Commenting on Mr Antony’s remarks, Dr Moily said the issues raised by the defence minister “can be a subject matter” before the B.K. Chaturvedi Committee set up by the Prime Minister.
The law minister also said the decision to scrap the deal was a “very calibrated decision” and that he was confident of its legality. The two-member committee led by Mr Chaturvedi will review the technical, commercial, procedural and financial aspects of the agreement between Antrix and Devas.