RIO DE JANEIRO – Alcântara Cyclone Space, the bi-national company created in 2007 by Brazil and Ukraine, has fallen on hard times. The two allies formed the partnership to launch commercial satellites from the Alcântara Launch Center in Northeastern Brazil.
Alcântara Cyclone Space on Hard Times
Since December 2011, Alcântara Cyclone Space has not paid the contractors who do work on the launch site of the Ukrainian Cyclone-4.
According to Folha de São Paulo, the company has $20 million dollars in cash and debt of $25 million dollars with the building contractors.
The business plan, which the Board never approved, states that the company will be in deficit for 20 years.
And even then, will only achieve profitability if it can protect technology that would give it access to the largest private satellite market, the U.S.
“It may be that, as a matter of resources, the project has to take a break to reorganize,” the Brazilian director of Alcântara Cyclone Space, Brigadier Reginaldo dos Santos told Folha.
According to the Ukrainian director, Oleksandr Serdyuk, the consortium formed by Camargo Correa and Odebrecht have halved the number of workers at the site in Alcantara. He said that it would halt construction if the payments of $15 million dollars per month are not resumed.
“We’re not going to make the first launch in 2013, as requested by governments,” said Serdyuk.
To support the launch plans, Alcântara Cyclone Space is calling for an extra $400 million dollars, half from the Brazilian government. This is in addition to the $65 million dollars that Brazil already committed to deposit this year, but which the government cut in the fiscal adjustment.
President Rousseff will have to decide by September – the month in which Alcântara Cyclone Space will run out of money – to throw away the $98 million dollars the country has invested in the company or to inject an extra $268 million dollars into the project.
Serdyuk and Santos highlight the strategic nature of the project. “Brazil in three years and for $250 million dollars, is receiving a launch center and access to space,” Serdyuk told Folha. “I think it costs about the same as a soccer stadium in Brazil.”
The prospect of making money with private launches was the motto used by the then Minister of Science and Technology, Roberto Amaral to convince then president Lula to fund the Alcântara Cyclone Space project in the first place.
In 2007, when the two allies formed the company, the forecast called for the governments to investment $30 million dollars, with the first launch scheduled for 2010.
Experts warned then that the costs were unrealistic and the market uncertain.
Amaral spoke of six or seven launches per year, but nobody outside the company had ever seen the Alcântara Cyclone Space business plan.
Santos said that the revised plan, which the company is preparing now, speaks of five launches per year at most.
“The plan became economically very small.”
The Brigadier also said that the debt with the Brazilian contractors is “friendly” and the company is servicing the contracts with the Ukrainian companies.
He attributes the escalation in cost and delay to the fact that Alcântara Cyclone Space is a development project. “It’s a package deal.”