Date:20/12/2008 URL: http://www.thehindu.com/2008/12/20/stories/2008122055871200.htm

National

CPI(M) sees a Rs. 1 lakh crore telecom scam

Special Correspondent

NEW DELHI: The Communist Party of India (Marxist) on Friday said it sees a Rs. 1 lakh crore scam in the allocation of spectrum to 2G telecom service providers, and demanded that Prime Minister Manmohan Singh take immediate action.

The party alleged that Minister for Communications A. Raja “continues to mislead” Parliament and the larger public by obfuscating matters. “What is more disturbing is the deafening silence on the part of the Prime Minister on this issue”

At a press conference, party’s Polit Bureu member and MP Sitaram Yechury and the former MP, Nilotpal Basu, said the party estimates the “mega scam” caused a loss to the national exchequer in the range of Rs. 1 lakh crore that includes some Rs. 60,0000 crore on account of undervaluation of new licences.

The rest of the loss was estimated to be on account of undervaluation of crossover licences for the existing CDMA operators and by not charging the market value of surplus spectrum from the existing GSM operators; each of which amounted to Rs. 20,000 crore approximately.

Mr. Yechury said the party forewarned the Prime Minister in February, when the Left parties were supporting the United Progressive Alliance government, of an impending scam by issuing new licences at 2001 price on first come first serv basis.

Two deals

This, he said, was confirmed with the two deals struck by two of the licensees, Swan Telecom (September 2008) and Unitech (October 2008), with two foreign companies, Etisalat and Telenor respectively, at prices that were 5.7 to 7 time more than what they had paid for their licences.

The CPI (M) leaders said instead of allocating new licences on the basis of public auction, the Department of Telecom (DoT) manipulated norms to allocate licences to favoured private players and facilitate the private auction of spectrum at a later date.

The Minister made a blatant attempt to mislead both Parliament and public by claiming that neither the Central Vigilance Commission nor the Telecom Regulatory Authority of India had raised any objection to the allocation.

Mr. Yechury said since the Minister made this statement in the Lok Sabha on December 15, the party MPs in the House would take it up.

The CPI(M) said the TRAI recommendations in October 2003 clearly stated that new licences should be allocated through a multi-state auction process. The TRAI wrote to the DoT in January that its recommendations cannot be implemented either in bits and pieces or while ignoring interlinkages between various recommendations.