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Tag: First-come first-served

  • Government holds Brief for 2 G Scam Corruption in Supreme Court

     

    English: The supreme court of india. Taken abo...
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    Government of India has filed a petition in the Supreme Court against its Ruling in the 2 G scam, cancelling 122 Licences and observing the First come first served approach to National Resources is flawed.

    Filing against this , the Government states

    ” the Department of Telecommunication defended the first-come-first-served policy and submitted the court’s recommendation for auction in case of distribution of natural resources went against the principles of the Constitution.

    “The finding in the judgment that the state is duty bound to conduct a public auction whenever it distributes natural resources, such that said resources always go to the highest bidder, is contrary to the principle in the Constitution and various legislations which prescribe various alternative method of distributing natural resources, including the policy of first-come-first served,” the plea said…

    The government’s petition filed under Article 137 of the Constitution contended that the Supreme Court verdict of February 2 “is liable to be reviewed since there are errors which are apparent on the face of the record.”

    The petition said: “The court would further have had to consider that as the urban market is already captured by existing telecom providers, there is a need to induct new telecom service providers who would provide service in semi urban and rural areas,” it said.

    The petition further said: “The court failed to appreciate that in order to facilitate tele density it was necessary to offer at competitive rates thereby allowing millions of rural and semi urban consumers to gain access to telecom services.”

    It also maintained that the apex court’s prescription of a single method for distribution of all natural resources, including spectrum, through the “auction” route was contrary to the principle of separation of powers embodied in the Constitution….

    “The impugned judgment is, with the greatest respect, internally contradictory as it holds the policy was flawed because it did not adhere to the principles of equality, while acknowledging that the policy was based on the twin principles of level playing field between different players, as well as including the need to promote affordability and increase penetration of wireless services in semi-urban and rural areas, both of which promote the principle of equality,” the petition said.

    http://www.deccanherald.com/content/231512/2g-judgement-went-beyond-limits.html

    The Supreme Court, if one were to read the judgement carefully does not totally rule out the FCFS principle, but has passed this order in this case as the even the FCFS principle was observed to suit the Companies and to fill in the pocket of the Politicians and A.Raja.

    What are the other sources open for distributing Natural Resources?

    Tendering is what comes to mind.

    First come first served Policy-in how many instances has it been followed and with what results?

    The purpose of Tendering is to have available options to determine the best.

    In the FCFS, how does one find that out and by what yard stick?

    By the ability of the Companies to bribe?

    The Supreme Court has interfered in the 2 G case at corruption has come to light-that too corruption at astronomical proportions.

    True the Court does not have the power to usurp or interfere with the Executive.

    But when the Executive is Corrupt and is mending laws to suit the personal aggrandizement of the Politicians-by even holding meetings among Ministers with our-notes, calling them,’paperless decisions’ and sets impossible terms for genuine participants in the tendering processes by asking to remit money to the tune of Crores as EMD with in a couple hours,the Court has every right to dictate to the Executive..

    The statement that only FCFS alone will ensure Teledensity is laughable.

    Another ridiculous part of the Review petition is that the Companies have to invest more in the case of Tenders and it will become unviable to run the Service effectively and the Common man will be affected.

    How and why does the Tendering Authority worried about the economics of the companies participating in the Tender?

    Do they not know that none will quote if the project is not viable.

    The Government, by filing the Review Petition has more than tipped its intentions of burying the 2 G investigation.

     

     

     

    Related articles

  • 2G Spectrum Scam-Full Story,Origin,Growth(?) and Modus operandi.

    Idea Cellular Logo
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    Mahajan ‘assisted’ Reliance Infocomm to become a nationwide operator without paying full licence fee

    Telecom scams are not new. In August 1996, the CBI registered an FIR against former telecom minister Sukh Ram after recovering 3.62 crore from his residences in Delhi and Himachal Pradesh — he made it to the Guinness Book of World Records for the wrong reasons! Thirteen years later, in 2009, he was sentenced to three years of rigorous imprisonment for “criminal conspiracy” and spent time behind bars for a month before being released on bail.

    Raja claimed 2G and 3G spectrums were not comparable, just as basmati rice was not the same as PDS rice

    During the NDA government, there was a major controversy when telecom companies were allowed to move from a licensing regime to a revenue-sharing one. The sudden removal of Jagmohan from the post of communications minister in 1998 was reportedly a consequence of his refusal to toe the line of a section within his government. In July 1999, following the recommendation of a Group of Ministers headed by Jaswant Singh, the fixed licence fee regime was changed to a revenue share one. This was adversely commented on by the CAG. According to Ratan Tata, if a hypothetical amount was to be calculated at that point of time, the loss to the exchequer would be about Rs. 50,000 crore.

    Other ministers for communications during the NDA regime, including the late Pramod Mahajan, were accused of assisting Reliance Infocomm to become a nationwide operator offering “full mobility” in its cellular phone operations without paying the full licence fee. This decision of the DoTwas against TRAI recommendations and the resultant loss to the exchequer was said to be in the region of 1,100 crore. However, the sheer size of the subsequent undervaluation and misallocation of spectrum makes the earlier scandals pale into relative insignificance.

    ON 10 JANUARY 2008, at 2.45 pm, an announcement was posted on the DoT website stating that letters of intent (LOIS) for issuance of licences bundled with spectrum would be given to applicants between 3.30 pm and 4.30 pm. The announcement added that application fees running into thousands of crores of rupees would have to be paid immediately by demand draft, along with supporting documentation.

    It was made clear that LOIS would be issued to those who deposit their fees first, beating others by even a fraction of a second — this was the infamous first come first served (FCFS) system (or the way movie tickets are sold) that privileged not financial wherewithal, technical competence or experience but speed, clout and foreknowledge. Even the FCFS system was not properly adhered to and the CAG categorically stated that those who obtained licences had prior information about how to apply for these LOIS.

    The CAG found that 13 firms that got 85 out of the 122 new licences in 2008 did not satisfy DoT eligibility criteria

    A few months earlier, the cut-off date for receipt of applications for licences was suddenly brought forward to enable particular companies to jump the queue. Here are a few examples: Swan Telecom, which had submitted its application on 2 March 2007, was given a licence with spectrum for Delhi on 28 August 2008, while Spice Communications, which had submitted its application in August 2006, was not given spectrum for the same service area.

    For Maharashtra, Spice, which submitted its application on 31 August 2006, got a licence in May 2009, whereas Unitech and Videocon got their licences with spectrum much earlier in September 2008 though the two companies had submitted their applications for licences more than a year later in September 2007. Idea Cellular (date of application: 26 June 2006) also got a licence in May 2009 while Unitech (date of application: 24 September 2007) got its licence in September 2008.

    THE STORY did not end here. Some of these companies expanded their equity bases by inducting foreign partners who paid large sums of money for the shares. Three examples: in September 2008, Swan Telecom sold 45 percent of its shares to Etisalat (of the United Arab Emirates) for $900 million or around Rs. 4,200 crore — the company had obtained its licence for only Rs. 1,537 crore and did not possess major assets other than a piece of paper, the licence. A month later, Unitech Wireless offloaded 60 percent of its stake to Telenor (of Norway) for Rs. 6,200 crore — this company too counted among its assets only a licence for which it paid Rs. 1,651 crore in January 2008. Thereafter, Tata Teleservices sold 26 percent of its shares to NTT DOCOMO of Japan for Rs. 13,230 crore. Thus, the DoT had undervalued spectrum by between seven and 10 times its true market worth.

    This became even more evident in 2010 when the government was able to raise more than Rs. 1,11,500 crore through public auction of third generation (3G) spectrum. Raja claimed 2G spectrum and 3G spectrum were not comparable just as basmati rice was not comparable to rice from the PDS (public distribution system). This argument is fallacious in the context of valuation of spectrum for a simple reason: the spectrum used is the same; only the nature of services provided is different by deploying superior technology — in other words, the same spectrum can be, and is, used to provide faster data transfer and other mobile telecom services.

    The CAG found that 13 companies that had received 85 out of the 122 new licences issued in 2008 did not satisfy the DoT eligibility conditions. The companies did not have the stipulated paid-up capital at the time of application and 45 out of these 85 licences were issued to companies which failed to satisfy the condition that providing telecom services should be the main object clause in their memoranda and articles of association.

    Crossed lines (from left): Since 1999, Ram Vilas Paswan, Pramod Mahajan, Arun Shourie, Dayanidhi Maran, A Raja and Kapil Sibal have helmed the telecom ministry
    Crossed lines (from left): Since 1999, Ram Vilas Paswan, Pramod Mahajan, Arun Shourie, Dayanidhi Maran, A Raja and Kapil Sibal have helmed the telecom ministry

    The CAG also pointed out that spectrum was provided beyond the contracted 6.2 megahertz (MHZ) to nine existing operators in 2007 despite a number of applications pending for new licences. These were Aircel, Bharti, BPL (Mumbai), the public sector undertakings Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL), Idea, Reliance, Spice (Punjab) and Vodafone.

    The biggest beneficiary of additional spectrum was BSNL (61.6 MHZ in 19 telecom circles) followed by Bharti (32.4 MHZ in 13 circles), Vodafone (19.6 MHZ in seven circles), Idea (12.6 MHZ in six circles), MTNL (124 MHZ in Delhi and Mumbai circles) and others. The total loss to the exchequer on account of allocation of additional spectrum at low prices: Rs. 36,993 crore.

    In January 2008, when the DoT issued all-India licences at Rs. 1,658 crore, the price was the same as that which had existed in 2001. The CAG used two parameters for assessing the possible “presumptive” or “notional” loss which the exchequer has suffered. In November 2007, S Tel had written first to the PM and later to Raja offering to pay Rs. 13,752 crore over 10 years for allotment of 6.2 MHZ of GSM spectrum.

    The CAG took this figure as a benchmark and calculated that the government would have generated revenue of 67,364 crore by selling 122 licences, 35 licences under the dual-technology regime and excess spectrum beyond the contracted amount of 6.2 MHZ.

    Further, after taking into account the revenue that was generated after the 3G auction, the price of spectrum for the 122 licences issued can be established at Rs. 1,11,512 crore against the Rs. 9,014 crore that the government actually earned. In addition, Rs. 40,526 crore would have been generated by selling 35 licences under the dual-use category and Rs. 13,841 crore for excess spectrum. Hence, the CAG report estimated the total loss to the exchequer, based on the 3G auctions, at Rs. 1,76,645 crore.

    http://www.tehelka.com/story_main48.asp?filename=Ne010111THEABCOF.asp


  • Swan Telecom front for Reliance Telecom: CAG.

     

    Raja’s link is reported to be in Chennai, for Swan.

    Highlighting irregularities in 2G spectrum allocation, the CAG has said Swan Telecom, one of the companies that got the licence, appeared to act as a “front company” on behalf of Anil Ambani-led Reliance Telecom and doubted the latter’s “intention”.
    Related:

    NEW DELHI: Highlighting gross irregularities in the allocation of 2G spectrum in 2008, the Comptroller and Auditor-General of India has said that “the entire process lacked transparency and was undertaken in an arbitrary, unfair and inequitable manner” causing a “presumptive loss” of over Rs.1.76-lakh crore to the exchequer. It indicts the former Communications and Information Technology Minister A. Raja for failing to adhere to laid guidelines and ignoring the concerns and advice of Prime Minister Manmohan Singh and the Union Finance and Law Ministries.

    The CAG’s Performance Audit Report titled “Issue of Licences and Allocation of 2G Spectrum by the Department of Telecommunications (DoT)” was tabled in Parliament on Tuesday.

    It said the DoT issued 122 new licences for 2G spectrum in 2008 at 2001 prices by flouting every canon of financial propriety, rules and procedures.

    The DoT did not follow its own guidelines on eligibility conditions, arbitrarily changed the cut-off date for receipt of applications post-facto and altered the conditions of the FCFS (first-come first-served) procedure at crucial junctures without valid and cogent reasons, “thereby giving unfair advantage to certain companies over others,” the report said.

    The CAG report blames Mr. Raja for violating the FCFS policy, but says the Prime Minister, the Minister of Law and Justice, the Finance Secretary, the DoT Secretary and the Member (Finance) in the Ministry were “not in favour of hasty allotment of licences without revision of spectrum prices.”

    In a severe indictment of DoT, the CAG report said it failed to do the requisite due diligence in the examination of the applications submitted for the licences, leading to the grant of 85 out of 122 licences to “ineligible applicants.” These companies, created barely months ago, deliberately suppressed facts, disclosed incomplete information, submitted fictitious documents and used fraudulent means for getting licences and, thereby, access to spectrum, it pointed out. The companies that won licences despite being ineligible include Unitech, Datacom (now Videocon), S-Tel, Swan Telecom (now Etisalat DB) and Loop Telecom.

    The CAG report said the owners of some of these licences, “obtained at unbelievably low price, have in turn sold significant stakes in their companies to the Indian/foreign companies at high premium within a short period of time. The premium earned by these new entrants to the telecom sector was nothing but the true value of the spectrum, which should have normally accrued to the public exchequer, had the transparent and fair market mechanism been followed for the allocation of UAS licences,” it added.

    Underlining the need for fixing responsibility and enforcing accountability for the lapses, the CAG report said the entire process of allocation of 2G spectrum raises serious concern about the systems of governance in DoT, which need to be thoroughly reviewed and revamped.

     

    In its report tabled in Parliament, the CAG said the Swan Telecom’s application was “in effect against the intent and spirit” of the Unified Access Service Licencing (UASL) guidelines as it was among those beneficiaries which “suppressed facts, disclosed incomplete information and submitted fictitious documents” to the Department of Telecom.

    he audit by CAG found that the e-mail ID of the corporate as well as registered office of Swan Telecom Pvt Ltd in its application dated March 2, 2007 was shown as hari.nair@relianceada.com, the report said, adding the same e-mail ID was also given for the correspondence address and the authorised contact person of the applicant company.

    The CAG said the Company Secretary Hari Nair had given a certificate while applying for a UAS licence for J&K service area in January 2007 that the Tigers Traders Private Limited held the shares of Swan (then Swan Capital Private Limited) as trustees of Indian Telecom Infrastructure Fund and these corporate beneficiaries are not part of Reliance ADA Group and neither Anil Ambani nor his family or Reliance ADA Group companies holds any shares in these companies.

    However, “the total equity/stakes of Reliance Telecom Ltd (RTL) in Swan Telecom was of Rs 1002.79 crore against equity holding of Rs 98.22 crore by the majority share-holder Tigers Traders Pvt Ltd”, the CAG said, adding it “raises doubts about the intention of the RTL and the control it would exercise in a new company incorporated barely few months ago”, the audit report said.

    http://hindu.com/2010/11/17/stories/2010111750770100.htm