How 10 years to launch a satellite for $ 300 million and not do it: instruction from Ukraine

10 years ago, Ukraine borrowed more than $290 million to build the first Ukrainian telecommunications satellite, Lybid. It was planned that it could be launched into orbit as early as 2011, but something went wrong: the cost of the project is constantly growing, and the satellite never flies anywhere. Writes about this with the BBC.

Фото: Depositphotos

2011, 2012, 2013, 2014, 2017 - all these are the years in which the Lybid launch was supposed to take place, but each time the historic day for the Ukrainian space industry was postponed for various reasons.

The last time the promise to finally bring the project to its logical conclusion was made in the Concept of the Ukrainian space program, which was approved by the Cabinet of Ministers last year: the document said that the satellite would be put into orbit in 2019 year.

However, things didn’t go beyond plans again.

Meanwhile, on October 22, the High Anti-Corruption Court will hold a preparatory hearing on the case, which concerns damage to the state-owned enterprise Ukrkosmos. The defendants are the ex-head of Ukrkosmos and a former freelance adviser to the general director of the State Space Agency. According to law enforcement officers, it was their actions that became one of the reasons for the failure of the next Lybid launch.

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However, the fate of the Ukrainian satellite would be no less dramatic and curious without this criminal case.

The history of the spacecraft, the cost of which is constantly growing, billions of hryvnias for which are still allocated from the state budget, but which cannot be launched in any way.

"First Ukrainian"

Lybid was supposed to be the first Ukrainian telecommunications satellite. Among other things, it would allow Ukrainian TV channels to save money by using the resources of the Ukrainian apparatus: now they have to buy the resources of foreign satellites and spend millions of dollars on this every year.

In addition, the Lybid resource was planned to be sold to foreign telecommunications companies. According to some estimates, over the course of 5-7 years of operation, the satellite would bring Ukraine about $700 million and would completely recoup the funds spent on it.

In 2009, the Canadian government agency Export Development Canada (EDC) agreed to finance the project, which allocated a loan of $292 million under Ukrainian guarantees.

Despite the fact that “Lybid” is used to being called a Ukrainian satellite, Ukraine has no direct connection to its production: the Canadian company Macdonald Dettwiler and Associates Corporation (MDA) was responsible for the production of the technological “filling”, while the satellite platform itself, on which this the equipment had to be installed - the Russian enterprise Information Satellite Systems.

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Ukrainian participation in the projects was limited to the creation of a launch vehicle, which should deliver the spacecraft into orbit. It was supposed to be made by the Southern Machine-Building Plant.

The plans sounded encouraging: already in 2011-2012, launch Lybid into orbit from the Baikonur Cosmodrome in Kazakhstan and transmit TV channel traffic via satellite during the European Football Championship, which took place in Ukraine and Poland in 2012. But it didn’t work out.

“Slept through a place in orbit”

In 2011, it turned out that there was nowhere to launch Lybid: the then chairman of the State Space Agency, Yuri Alekseev, explained that the Ministry of Transport and Communications, several years earlier, simply “slept through” the point assigned to Ukraine in geostationary orbit, when it did not confirm interest in the position 38,2 degrees east longitude.

This position was once allocated to Ukraine and is one of the most optimal points for the placement of the Ukrainian satellite. Every few years Ukraine confirms its interest in maintaining this position, but for unknown reasons, the Ukrainian side did not do this on time.

This led to the fact that the “Ukrainian” place in orbit was taken by the French company Eutelsat, which planned to launch its own satellite there.

And although the parties subsequently managed to reach a compromise, and Ukraine negotiated for itself another orbital position, it became clear: the cost of Lybid would increase by several million more, and the launch would definitely not happen as planned.

At the same time, project participants reported that the launch of Lybid into orbit was postponed to 2013. Subsequently, the launch date was moved forward another year. These plans also failed to come true.

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Crimea, annexation, space

The annexation of Crimea in 2014 became for Ukraine not only a political, but also a space - in the literal sense of the word - problem: the control of Lybid should take place from the territory of the National Center for Control and Testing of Space Facilities, located in Yevpatoria.

After the annexation of the peninsula by Ukraine, it lost control over this complex. The result is another delay in the project schedule and another increase in costs.

The Ukrainian authorities allocated funds for the construction of a new satellite control center near Kiev - it seemed that the problem had been solved, and the launch of Lybid was just around the corner. But again no.

Money is lost

The production of "Lybid" was actually completed in August 2014. Construction of the ground control complex near Kiev is a year later. The only thing missing was a launch vehicle, the production of which at the Southern Machine-Building Plant in Dnepr was “stuck” back in September 2013.

The reason is $8,2 million in rocket engine costs that got lost between the Canadian MDA and its contractor. In 2016, the National Anti-Corruption Bureau took up the case.

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Further more. Without waiting for the conclusions of the investigation, in 2017 the MDA unexpectedly announced that it was suspending its participation in the Lybid projects.

The company explained this with force majeure circumstances related to the annexation of Crimea and the loss of the satellite control center in Yevpatoriya.

Assurances from the Ukrainian side that the problems had been solved and a new ground-based control complex “Lybid” had already been erected near Kiev, MDA was not convinced, said the current chairman of the State Space Agency Pavel Degtyarenko: they had to go to court.

The trial in London arbitration began last year: Ukraine demands that MDA return the money received by this company under the contract - for which Ukraine is still paying a loan to Canada.

What did NABU find out?

The investigation revealed that back in the early 2010s, an intermediary company, Briklin Limited, appeared in the project, which received funds from the Canadian MDA and was supposed to transfer them to the Ukrainian contractor, Yuzhmash.

Briklin Limited actually transferred part of the money received, but the Ukrainian company never received 8,2 million. It is these that have been lacking for several years to create a launch vehicle and complete the Lybid project.

According to law enforcement officials, the money was withdrawn to the accounts of offshore companies - some of them were allegedly spent on purchasing real estate in the United States, and some were cashed out.

Those accused of organizing the scheme are ex-head of Ukrkosmos Sergei Kapshtyk and former freelance adviser to the general director of the State Space Agency Mikhail Grinshpon.

The first is accused of abuse of power, the other is accused of misappropriation and embezzlement of property, acquiring it through abuse of official position, as well as laundering proceeds from crime.

Grinshpon himself in a conversation with reporters in 2017 did not deny that he was related to Briklin Limited. To the question of where the media disappearedstavva, he replied: “Remember in Cyprus, when the banks were all closed? It's officially all there."

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On October 22, the High Anti-Corruption Court will hold a preparatory hearing in the case of the disruption of the Lybid launch.

Meanwhile, the satellite itself has been ready for several years and has been in storage in Russia. All this time, funds continue to be allocated from the Ukrainian budget to repay the cost of the project - as they say in NABU, about six billion hryvnia have already been paid for the loan.

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