PM deflects blame in 2G scam, says Raja promised transparency (Roundup)

Wednesday, February 16, 2011

NEW DELHI - Deflecting blame in the 2G spectrum scam that has dented his image, Prime Minister Manmohan Singh Wednesday said he had asked former communications minister A. Raja to ensure fairness and was in turn assured of “complete transparency”. He said the matter of licences was “never brought to me or the cabinet”.

“In allocation of 2G spectrum, the issue of licences was never brought to me or the cabinet. That was the decision of the (then communication) minister,” he said at a press conference here, adding that DMK’s Raja had assured him of “complete transparency” on the issue.

Raja quit in November over irregularities in the allotment of 2G spectrum to telecom companies that caused huge losses to the national exchequer. He is now in Central Bureau of Investigation (CBI) custody.

Clarifying his stand, Manmohan Singh said: “I wrote a letter to Raja on Nov 2, 2007. I listed a number of issues that you (he) must look into and (ensure) they are dealt (with) in (an) equitable, fair and transparent manner. One of the issues I asked him to look into was the possibility from the legal and technical angle of having an auction of spectrum.”

He said Raja wrote back saying he was absolutely “transparent in dealings”.

“I will be so in the future and you have my assurance that I have done nothing and I will do nothing that will be inconsistent to the promise I have made to you,” Manmohan Singh said, citing Raja’s letter.

The prime minister admitted he had received complaints against Raja but “I was not in a position to make up my mind if anything was seriously wrong”.

“Complaints were coming in, complaints were coming from all sides. Some were from those who had not benefited, some were from those who had benefited partly,” he said.

“I don’t know what was the motivation of the people who got the spectrum. I thought it was the prevailing practice and Raja was continuing with that policy,” Manmohan Singh added.

The companies that got spectrum in 2008 have been accused of trying to make a quick buck as they sold significant stakes in the telecom firms to foreign joint venture partners or other entities.

But Manmohan Singh said he did not interfere as he was told that some telecom operators sold their stake to other companies to finance their roll-out obligations.

“Now if they have to roll-out (services), they require money and that money can be raised by the way of borrowing or by diluting equity,” he said. “Therefore at that stage I did not think I should interfere.”

According to CBI, Unitech was allotted Unified Access Service licenses in 22 circles for Rs.1,658 crore and offloaded 60 percent of its stake to Norway’s Telenor for Rs.6,100 crore even before the roll-out.

Similarly, another telecom operator, Swan, was allotted licenses in 13 circles for Rs.1,537 crore and sold 45 percent of its equity to Etisalat for Rs.4,200 crore.

Manmohan Singh also said the calculation of the loss to the exchequer from the 2G scam depends on the methodology adopted, with figures from different sources varying widely.

“The then existing policy of the government was that auctions should not take place and if auctions have not taken place, then what is the basis to calculate the loss? There are various estimates but you have to assess what is the right magnitude after asking yourself what was the right price,” the prime minister said.

“CAG (Comptroller and Auditor General) has said it is a presumptive loss.”

According to the CBI, it would be wrong to say there was no loss to the exchequer in the spectrum scam. This contradicts the remarks of new Communications Minister Kapil Sibal, who had said the CAG was utterly erroneous in pegging the loss at Rs.1.76 lakh crore (around $40 billion) while awarding airwaves for 2G phone services in 2008.

The minister, who was later slammed by the Supreme Court, had also said the 2G scam caused “zero loss” to the government.

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