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NEW DELHI: A CAG report tabled on Friday in Parliament has severely criticised the UPA government for drastically reducing Rs 600 crore penalty imposed on private telecom operators to just over Rs 5 crore. The decision was taken within days of telecom minister A Raja being arrested in February 2011 for the 2G scam.
The UPA government's decision came in the context of violation of a scheme to provide connectivity in remote areas using a part of the licence fee paid by telecom companies. Under the universal service obligation fund (USOF), the government launched the scheme in 2007 to provide mobile connectivity in 500 remote districts in 27 states that are not covered through wireless or mobile services.
Reliance Communications Ltd (RCL) and Reliance Telecom Ltd (RTL), both part of Anil Dhirubhai Ambani group, were among the selected 14 companies for providing mobile services in select rural and remote areas in service areas where they already operated.
According to CAG report, both the Reliance companies "had unilaterally switched off 1191 and 228 BTSs (base trans-receiver stations) out of 1607 and 1598 commissioned BTSs respectively". The reasons cited by the two companies for the abrupt decision was marked as "not agreed to by the ministry". And it issued a show cause notice to the two companies on December 21, 2010 and January 6, 2011 to explain within 15 days why financial penalty not exceeding Rs 50 crore for each of the 12 circles should not be imposed.
However, on February 16, the ministry moved to impose a much lower penalty, totalling just over Rs 5 crore, citing another clause in the contract. The ministry defended the decision saying the "competent authority (the minister) had clearly exercised his discretion judicially and after taking into account all relevant factors".
The federal auditor has, however, rejected the ministry claims. "Treating the act of M/s RCL and M/s RTL of unilaterally switching off the radiating BTSs in an arbitrary manner as mere interruption of services under clauses 2.3 and 2.4 of USOF Agreement by the Ministry instead of as violation of terms and conditions of the UASL Agreement under clause 10.2 (ii) was unjustified," the audit has said.
UPA reduced Rs 600 crore penalty of telcos to Rs 5 crore: CAG - The Times of India
The UPA government's decision came in the context of violation of a scheme to provide connectivity in remote areas using a part of the licence fee paid by telecom companies. Under the universal service obligation fund (USOF), the government launched the scheme in 2007 to provide mobile connectivity in 500 remote districts in 27 states that are not covered through wireless or mobile services.
Reliance Communications Ltd (RCL) and Reliance Telecom Ltd (RTL), both part of Anil Dhirubhai Ambani group, were among the selected 14 companies for providing mobile services in select rural and remote areas in service areas where they already operated.
According to CAG report, both the Reliance companies "had unilaterally switched off 1191 and 228 BTSs (base trans-receiver stations) out of 1607 and 1598 commissioned BTSs respectively". The reasons cited by the two companies for the abrupt decision was marked as "not agreed to by the ministry". And it issued a show cause notice to the two companies on December 21, 2010 and January 6, 2011 to explain within 15 days why financial penalty not exceeding Rs 50 crore for each of the 12 circles should not be imposed.
However, on February 16, the ministry moved to impose a much lower penalty, totalling just over Rs 5 crore, citing another clause in the contract. The ministry defended the decision saying the "competent authority (the minister) had clearly exercised his discretion judicially and after taking into account all relevant factors".
The federal auditor has, however, rejected the ministry claims. "Treating the act of M/s RCL and M/s RTL of unilaterally switching off the radiating BTSs in an arbitrary manner as mere interruption of services under clauses 2.3 and 2.4 of USOF Agreement by the Ministry instead of as violation of terms and conditions of the UASL Agreement under clause 10.2 (ii) was unjustified," the audit has said.
UPA reduced Rs 600 crore penalty of telcos to Rs 5 crore: CAG - The Times of India
