Chinese Contractor Agrees to Accelerated Schedule for APT’s Apstar 9 Satellite

by

PARIS — The ability of China’s main satellite manufacturer and launch services provider to meet a tight commercial deadline will be tested with the Apstar 9 contract from APT Satellite Holdings of Hong Kong.

In addition to its 24-month schedule from contract signature to launch, the $211.2 million deal for the construction and launch of Apstar 9 includes an unusual feature whereby the Chinese contractor agreed to provide an aging satellite to be moved to Apstar 9’s intended orbital slot to allow the company to retain regulatory rights to it.

The contract was signed in November, permitting work to begin pending final approval by an independent APT review board. The board’s approval, which came in mid-January, was required under Hong Kong stock market regulations because the Chinese government, which owns Apstar 9 manufacturer China Aerospace and Technology Corp. (CASC), also has a majority equity stake in APT.

Apstar 9 is designed to carry 39.5 C- and 21 Ku-band transponders and to operate at 142 degrees east longitude. To preserve APT’s rights to the slot at the International Telecommunication Union, the two contracting parties agreed that CASC would move one of its satellites into that position.

The Chinasat 5A spacecraft, launched in 1998, was drifted into the 142 degrees east position in late 2013.

APT has agreed to pay CASC $3.02 million for use of the satellite for two years to develop the market while Apstar 9 is being built.

It is unclear whether APT and CASC had signed an agreement for long-lead items for Apstar 9, or an authorization to proceed, before the formal Apstar 9 commitment in November.

In any event, the delivery schedule for the satellite is exceptionally short. According to APT filings with the Hong Kong Stock Exchange, CASC will receive a $1.5 million incentive payment if it delivers the satellite to the Chinese launch site by Sept. 10, 2015.

But if delivery is not made in time to permit a launch by Nov. 30, 2015, CASC will pay penalties of between $50,000 and $90,000 per day, rising to $120,000 per day if the launch, aboard an enhanced Chinese Long March 3B rocket, slips by more than 90 days.

APT said it has the option of leasing the satellite from CASC in lieu of procuring it. The company opted for a lease arrangement in 2004 with Loral Space and Communications of New York for the Telstar 18/Apstar 5 satellite, which is now owned by Telesat of Canada.