The Spectrum allocation Scam! (update)
(Post Updated: Earlier information on 3G was not correct )
BJP has actually accused Telecom Minister A. Raja of carrying out the largest Scam that India has ever seen – worth close to 60,000 crores !!
Here is what BJP GS Arun Jaitely had to say about the Scam:
‘Applications for telecom licenses were invited setting Oct 1, 2007, as the deadline. An artificial cut-off date, Sep 25, 2007, was created and applications received between Sep 25 and Oct 1 were summarily rejected. Rules of the game were changed after the game had begun,’ he said.
The BJP leader alleged that ‘all friendly applicants, mostly real estate companies, had been advised to put in their applications before Sep 25â€². The licenses and the spectrum allocation were then allotted to nine operators at a price of Rs.1,650 crore per operator, he said.
‘This price,’ he said, ‘was not taken on the basis of the 2007 market value but on the basis of an auction held in 2001.
‘The value of the license and spectrum in 2007 could not be the same as in 2001. The telecom market has grown phenomenally during this period,’ he said, adding the companies ‘post allotment didn’t operate the service’.
All they (the private companies) owned was a shell company and a guaranteed spectrum. They availed 74 percent Foreign Direct Investment (FDI) policy of the government and found buyers and joint venture partners from the international market.
‘The companies were overnight valued at over $2 billion (over Rs.9,000 crore) and a large chunk of the equity was sold by at least three licensees to overseas partners at a price of Rs.6,000-7,000 crore. Obviously the government lost over Rs.60,000 crore for the nine licenses collectively along with the spectrum,’ he said.
Although, this is just one side of the story and Telecom minister A Raja has completely washed his hands off the controversy, I tend to agree with it – because here nothing can be made up – These are just numbers and they are in open.
I think we will have to wait and watch as to how this whole investigation unfolds.
What do you think – Could this be the largest Scam India has ever seen or the allegations are just plain baseless?