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Raja tweaked policy to aid Swan, Unitech

NEW DELHI: The CAG report on the 2G spectrum scam has thrown up fresh evidence of how former telecom minister A Raja used his office to manipulate the definition of first-come, first-served (FCFS) to give Swan and Unitech a greater advantage over even the carefully handpicked new licencees. Raja pulled off this colossal scam by insisting that he followed policy and procedure established since 2003 to give away licenses on a FCFS basis, when in fact, he did not. Violating the established FCFS policy is just one of the many violations that helped perpetrate the Rs 1.76 lakh crore scam — but CAG's report shows that this in particular, is directly attributed to Raja himself. On page 63 of its report, the CAG has attached a copy of a DoT release on its use of FCFS policy for award of new licences showing Raja made changes in the definition of FCFS in his own handwriting. The FCFS system followed since 2003 gave priority for spectrum allocation based on date of application. According to the CAG, "MOCIT (Raja) personally without any sound and valid reason took away the sanctity of date of application and the date of compliance of LOI conditions became the date of priority, which is not accepted principal of FCFS being followed by DoT till then. It was for the first time in the history of DoT that the date of compliance of LOI was considered a criterion for the issue of UASL licenses". Raja used press meets and releases to hide this modification and continues to state, "I am following policy established by my predecessors since 2003". The CAG shows how this clever alteration was used to switch companies in the queue, bringing those like Swan and Unitech who had applied much later, right up ahead over Spice and Idea in the priority for spectrum allocation. Essentially, the queue of applicants was illegally formed. Unsurprisingly, this created the most impact in the Delhi circle where spectrum demand far exceeds supply. In the case of Swan, this change of definition of FCFS allowed Swan to get spectrum as early as 28 August 2008 despite submitting its application just 6 months earlier on 2 March 2007. No other applicant has been awarded spectrum for Delhi, not even Spice, which had submitted its application in August 2006 — eight months ahead of Swan. This is because Raja knew that there was spectrum for only one operator in Delhi. For Maharashtra, Spice (date of application 31 August 2006) had to wait 2 years for spectrum till May 2009, while Unitech and Datacom (Videocon) who applied a year after Spice, got spectrum within a year and eight months ahead of Spice, in September 2008. Idea was awarded spectrum after more than two years, in May 2009, despite an application of June 2006. Unitech became the key beneficiary, jumping ahead of the queue, to receive spectrum in Sept 2008, eight months before Idea, despite having applied 14 months after Idea. It is likely the victims kept quiet as they all hoped to eventually gain from the allotment of spectrum in 2008 at 2001 prices. Raja's careful manipulation of FCFS helped both Swan and Unitech make a killing within 9 months by selling 45% and 60% of their equity stake to Etisalat and Telenor respectively at 6-7 times their cost — without a single customer or a rupee in revenues. Clearly, Raja neither followed FCFS policy that existed since 2003 nor implement TRAI recommendations of 2007.

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