Spectrum allocation is `largest scam in India`: BJP

The BJP on Monday alleged that the spectrum allocation scam was the "largest scam in independent India."

Updated: Oct 26, 2009, 23:57 PM IST

New Delhi: The opposition Bharatiya Janata Party (BJP) Monday said the alleged irregularities in allotting wireless radio spectrum and licences by the telecom ministry to nine private operators in 2007 was the "largest scam in independent India" that cost the government a whopping "Rs.60,000 crore".

"In terms of monetary value, it is the largest scam in independent India. It is a monumental scam. It cannot be a subject of controversy. It is a mathematical calculation," Leader of Opposition in the Rajya Sabha Arun Jaitley told reporters here.
Demanding that Telecom Minister A. Raja of the DMK should be sacked, the BJP general secretary took exception to Prime Minister Manmohan Singh "intervening in the matter".

"I don`t think the prime minister should intervene when the investigation is on," Jaitley said.

Manmohan Singh said Sunday that allegations about the scam were incorrect but he refused to answer a question about the opposition parties` demand that Raja should resign following last week`s Central Bureau of Investigation (CBI) raids on the offices of his ministry.

Jaitley said the government had in 2007 recommended an "open licence regime".

"Applications for telecom licences 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 25".

The licences and the spectrum allocation were then alloted 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 licence 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," Jaitley said.

"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 licencees 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 licences collectively along with the spectrum," he said.
Alleging that the United Progressive Alliance (UPA) was trying to "cover up" the scam, the BJP leader said, "It was unfortunate that the prime minister has chosen to comment on the innocence of the minister".

"The compulsions of the coalition politics should not come in the way of the an honest investigation. The minister should cease to be in office. His continuation is itself a deterrent to an honest investigation," the BJP leader said.

"It is an open and shut case, not only for the investigation and trial but for conviction also," he said.