Entry Fee Offset in Spectrum Bids Caused Rs 5,476-Cr Loss: Government Auditor

New Delhi: Adjustment of one-time entry fee paid by telecom companies whose licences were quashed by the Supreme Court against the spectrum price they paid in 2012-13 deprived national exchequer of Rs 5,476.3 crore, a CAG report tabled in Parliament said today.

“Set-off of the non-refundable entry fee of Rs 5,476.30 crore paid by licensees in 2008 whose licences were declared illegal and quashed by the Supreme Court against the auction price payable for spectrum in 1800 MHz/800 MHz held in November 2012/March 2013 deprived the government of the revenue to that extent,” the audit report on communication and IT sector stated today.

The government in 2012 decided to adjust the licence fee paid by companies whose permits were quashed in the 2G case.

The rider was the adjustment will be provided in the spectrum price those players will shell out in the auction to procure the airwaves.

The major beneficiaries of this scheme are Telewings Communications (now Telenor), Videocon Telecom and Sistema Shyam Teleservices.

The report further said the government continued to allocate wireless frequencies in spectrum band of 3.3-3.4 Ghz without auction free of cost despite recommendation from regulator Trai in violation of the apex court judgment that said spectrum should be allocated through auction.

CAG added that the continued allocation “administratively, free of cost resulted in significant loss to the public exchequer by way of non-realisation of one-time charges which the government would have realised had they auctioned the spectrum”.

“This was despite recommendation of Trai to auction the spectrum in the 3.3-3.4 GHz band, which also violated the intent and spirit of the Supreme Court judgment,” the report said.

CAG has rapped the Telecom Regulatory Authority of India (Trai) for setting up regional offices by ignoring directions of the central government, which incurred an expenditure of Rs 14.12 crore till March 2014.

CAG noted deficiencies in contract management, web hosting and application development by the National Informatics Centre Expenditure, which ran up a cost of Rs 14.88 crore.

“Lack of proper monitoring and delays at various stages resulted in hardware and software worth Rs 12.09 crore becoming obsolete,” the report said.

Further, NIC failed to forfeit the bank guarantee worth Rs 2 crore on failure of the vendor to execute work under the e-court project due to lack of co-ordination among the user groups concerned, it stated.

The auditor also found defective planning by the state-run BSNL in implementation of CDR (call data record) based billing and customer care solution.