Tuesday, November 16, 2010

2G spectrum scam: Raja ignored PM's advice, says CAG report

New Delhi:  The report that pushed A Raja through the exit door of the Telecom Ministry has been tabled in the Lok Sabha. Prepared by the government's auditor, the Comptroller and Auditor General (CAG), the document holds Raja responsible on many fronts for violating guidelines, indulging in favouritism and costing the government Rs. 1.76  lakh crores by mishandling the allocation of 2G spectrum in 2008.

There were loud and angry scenes in Parliament once again today, courtesy the Opposition - the Lok Sabha has been adjourned till Thursday, since tomorrow is a national holiday for Eid.

Finance Minister Pranab Mukherjee met senior BJP leader LK Advani in the latter's office to discuss a possible end to the stand-off in Parliament. Parliamentary Affairs Minister Pawan Bansal was at the meeting too.

Raja was forced to resign on Sunday night under considerable pressure from the Congress, which has been attacked in Parliament by a united Opposition for corruption within its ranks. 

The resignation was described as a welcome step by the Opposition but it continues to demand a Joint Parliamentary Committee (JPC) to investigate the 2G scam.  The government has said there is no question of agreeing to this.

Parliament has not functioned at all this winter session - the Opposition says it won't let the House get to work till a JPC is announced.

What the CAG Report says about Raja

"The Honourable Minister of Communication & IT, for no apparent logical or valid reasons, ignored the advice of Ministry of Law and Ministry of Finance, avoided the deliberations of the Telecom Commission to allocate 2G spectrum, a scarce finite national asset at less than its true value on flexible criteria and procedures adopted to benefit a few operators." The report also says Raja ignored PM's advice.

Details are also emerging on how Raja bent the rules for a few corporates who walked away in 2008 with 2G licenses at what experts describe as throwaway prices based, inexplicably, on 2001 rates.

Several of the companies should have been declared ineligible, says the CAG report.

Swan Telecom and others favoured

Swan Telecom was among those that won a 2G license in 2008.  The charges in the CAG report are that Swan should not have been considered for a license because Reliance Communications held 10.7% stake in Swan - and according to the rules, a telecom operator cannot own more than 10% stake in another telecom company operating in the same service area.

The application should have been rejected by the Department of Telecom (DoT).

The CAG report says, "It was evident at the time of applying for license that the substantial equity of M/s Reliance Telecom in M/s Swan was 10.7%. Since M/s Reliance Telecom was operating in all the service area for which M/s Swan Telecom had applied for the license, their application was not in conformity with Clause 8 of the guidelines".

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