Deal with Devas will not have covered satellite costs

| | Updated on: Feb 15, 2011

The agreement between Devas Multimedia and Antrix would not have compensated for the investment cost borne by the Department of Space.

According to an internal Government note, the total cost of GSAT-6 and GSAT-6A works out to Rs 766 crore whereas Antrix would have got revenues of only Rs 1,350 crore over 12 years.

“The estimated revenue does not appear to compensate for the investment cost by DoS and cost of capital. The Space Commission (at its meeting on July, 2010) observed that the revenues shown in the agreement have not taken into account the risk factor in developing the satellite and their in-orbit flawless operation for 12 years,” the note said.

The revenue estimates assume that Devas becomes cash positive, that there are no penalties on account of late delivery of the spacecraft and the satellites functioning to full life span.

Published on February 17, 2011

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