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2G scam: Raja points fingers at Dr Singh, Chidambaram

April 22, 2013 20:30 IST

Former telecom minister A Raja, the main accused in the 2G scam, was not allowed to appear before the Joint Parliamentary Committee that is looking into the alleged mishandling in 2G spectrum allocation.

In a 106-page statement sent to the JPC on Monday, the Dravida Munnetra Kazhagam leader has given a blow by blow account of what, how and why 2G spectrums were allotted at lower prices.

Read A Raja’s statement implicating the PM and the FM

Obviously, this is the stout defence of an accused who has been charge-sheeted in a major corruption case and is currently out on bail. This is not the whole truth.

Raja, who had spent 15 months in Tihar Jail after he was arrested in connection with the case in February 2011, says that nobody should suffer his fate.  

Read what he says in his conclusion in the papers sent to JPC, which is headed by Congress leader P C Chako.

"This JPC has been constituted to examine all matters relating to allocation and pricing of Telecom Licenses and Spectrum from 1998-2009.  I am submitting this Written Statement to the JPCin an attempt to set out the entire sequence of events and roles of various individuals in relation to the grant of UAS Licenses and allocation of 2G spectrum.  I have had to do this because despite my repeated requests, the Chairman of the JPC has declined to permit me to depose before the Committee.

As the proceedings of the JPC have shown, the facts pertaining to the grant of licenses and allocation of spectrum can be appreciated only after taking into account the huge number of records and documents along with the oral testimonies of the hundreds of persons involved.  At the end of the day, however, the story is simple: an effective and affordable nation-wide telecommunication system is crucial for the development of the country as a whole.  Successive governments have realised this and thereby treated telecom as an infrastructure item.  We have also realised that a properly regulated market-based approach was the best way to let the sector grow.

Accordingly, the primary aim of the government in the telecom sector was not to earn revenue, but to ensure effective and affordable services to the whole country.  The idea was to keep entry barriers low and encourage more players to enter the sector.  As the players competed with each other to add subscribers, teledensity increased and tariffs fell.  At the same time, income to the Government, based on the revenue-share model, exponentially increased with an in-built indexation.  This was a situation to the benefit of all stakeholders.

Spectrum is the core resource on which the entire wireless industry is built.  A certain amount of spectrum had to be given to every operator, so that he could conduct his operations.  At the same time, there had to be an efficient regulatory system that ensured that the operator used the allotted spectrum optimally, and the industry did not fall prey to spectrum hoarding.  I attempted to achieve this by tightening the subscriber base criteria for allocation of spectrum over and above start-up spectrum.  After tremendous opposition from the COAI, these criteria are now in place and are forcing the operators to use spectrum efficiently.

The unfortunate fact is that prior to my tenure, there was no transparency in disclosure of spectrum availability and allocation.  This acted as a major barrier to entry of new operators and the GSM segment was virtually cartelised by the COAI.  It is only as a result of my efforts that we were able to introduce new players and allocate spectrum to them, which was earlier lying unused.  It is worth reiterating that not even 1 MHz of spectrum allotted by me came from the Defence Services or any other source: it was simply lying without being coordinated; a waste of a national resource.  Why was it kept this way, and why new players were not allowed earlier? Why did companies that got licenses in December 2006 have to wait till January 2008 to get spectrum?  I suspect that the answer is known to all.

The DoT was supposed to have been following the First Come First Serve system, but nowhere was it defined as to how FCFS would operate when there were two sets of licenses and two sets of applications.  Both the Access Servises  Wing and the Wireless Planning Co-ordination  Wing have separately followed FCFS.  This is what I explained to the Hon’ble PM in my letter of 26.12.2007: “The first come first serve policy is also applicable for grant of wireless license to the UAS Licensee”.  The nuances of how the FCFS system would operate never became an issue earlier, since the DoT was processing only one application at a time – and since the applicants were all mostly COAI members, nobody protested against this method.  This sequential processing obviously could not be done when a large number of new applications arrived, and I approved the DoT proposal to issue Letter of Intents simultaneously.  After LOIs had been issued, it was also duly informed to me that they had been issued simultaneously.

Once LOIs had been issued simultaneously, there is no procedure, and really there cannot be a procedure, to refuse to accept the LOI compliances from an LOI holder and ask him to wait till some other LOI holder gave his compliances.  The only logical and transparent method is to fix priority in order of receipt of compliances, which is what was done.  All the applicants did in fact submit compliances on the same day or the next day, and none was prejudiced by this method.  I further ensured this by the method of simultaneous allocation of spectrum, as far as possible.  Thus, seniority became a non-issue and that is why no operator raised any grievance.

The decision to process applications received till 25.09.2007 and the issue of dual technology are relatively smaller issues.  I approved the proposal to process applications received till 25.09.2007 because it was consistent with a harmonious reading of NTP-99, UASL Guidelines and TRAI Recommendations, considered along with the likely number of eligible applicants, likely availability of spectrum (including possibility of spectrum vacation), and past precedent of licensees waiting for spectrum allocation.  I was in fact open to processing all the pending applications, but the thenS(T) was not in favour of this and hence this decision was taken.  Insofar as dual technology was concerned, the Tata file was cleared as soon as they furnished the required No Dues Certificate and was not delayed for any reason.  The question of their inter se priority with new applicants was never referred to me for a decision and was handled by the WPC internally. 

The earlier procedure followed by the DoT was to allow several extensions of time to applicants to comply with eligibility conditions till issuance of LOI, and in some cases even after issuance of LOI.  There is no power in the UASL Guidelines or anywhere else for this to be done, but it was being done.  On what basis?  Again, I suspect that the answer is known to all.  After I took charge, I stopped this practice and directed that eligibility had to checked at the time of application and not subsequently.  It is on the basis of this decision that the CBI has charged Swan Telecom and Unitech Group as being ineligible – and the twist in the tale is that I am supposed to have conspired with them!  It is really absurd.

Today, after the intervention by the Supreme Court, cancellation of licenses and the attempted auction of spectrum, the telecom wheel has turned a full circle.  There are no new operators, and no one is keen to enter the business.  Tariff increases have already been announced, and are likely to be announced again.  The telecom success story is finished.The so-called theory of conspiracy between me and some private operators has fallen flat after the combined investigation of CBI, ED and Income Tax Departments could not identify a single rupee of any bribe with me or even my extended family.  Where has this left the country?

I took no unilateral decisions.  Every major decision of mine was taken after consultation first with the DoT officers and thereafter with the Hon’ble PM, FM and EAM.  All issues including entry fee, non-auction of spectrum, FCFS, processing of applications till 25.09.2007, etc., were personally discussed by me with the Hon’ble PM and the DoT proceeded only thereafter.

On several issues in this case, one can the view that the decision is a matter of opinion.  Different options were available, and the DoT chose a particular option.  I also accept that some other authority may have a different opinion.  For instance, the Planning Commission says that telecom should not be seen as a source of revenue, but the CAG is concerned only with maximising revenue.  These sort of institutional differences should be left to be determined by the Executive, which is of course answerable to Parliament.  Instead, the CBI, the Supreme Court and various other bodies started imposing their opinions, leading to this current situation.

It must be understood that the CBI is the investigative and prosecuting arm of the Central Government.  If the Hon’ble PM says in Parliament that there has been no loss to the exchequer, how can the Government stand by and watch silently while the CBI prosecutes me for allegedly causing loss to the exchequer?  It is truly unbelievable and this attitude of the Government can perhaps only be explained as an exercise in blame-shifting or acting on political considerations.

The inter-institutional differences and aberrations mentioned above have been responsible for my personal liberty being sacrificed for fifteen months, though I do believe that I have emerged stronger from this.  But all this could easily have been avoided if the Government had backed its Minister and presented the case properly before the Supreme Court.I can only hope that if this kind of situation recurs, no other Minister is made to suffer my fate.  In conclusion, I would like to state that I stand by every decision that I took, and I am confident of emerging from this controversy with my name cleared by the judiciary and by history."

A correspondent In Delhi