Israel Aerospace Industries to pay $10 million for late delivery of satellite destroyed in Falcon 9 explosion

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WASHINGTON — Israel Aerospace Industries was ordered to pay Spacecom $10 million for late delivery of Amos-6, a satellite that ended up being destroyed in SpaceX’s 2016 Falcon 9 fueling mishap.

In a Nov. 1 filing with the Tel Aviv Stock Exchange, Spacecom said the late fee is the result of arbitration over the ill-fated telecom satellite’s protracted production.

Spacecom ordered Amos-6 from IAI in 2012 for $200 million in anticipation of a launch in 2014 or 2015. In its filing, Spacecom did not say when it was originally supposed to take delivery of the satellite, but by 2015 the launch of Amos-6 had slipped by a year. Spacecom representatives could not be reached for comment by press time.

In mid-October, a Spacecom representative said the company was negotiating with IAI for its next satellite, Amos-8, following the Israeli government’s involvement in the program.

“We are talking with Israel Aerospace Industries to do it with them,” Tsachi Dahan, head of Spacecom’s vertical solutions business, said at the VSAT Congress here Oct. 16.

Spacecom originally ordered Amos-8 as a replacement for Amos-6 from U.S.-based Space Systems Loral in March, after citing speed to market as a primary contractor selection criteria. It terminated the deal six months later following criticism at home that its decision to shop overseas jeopardized IAI’s ability to stay in the telecom satellite manufacturing business.

On Sept. 3, three weeks before Spacecom canceled its SSL order, Israel’s Ministry of Science and Technology announced that Amos-8 would be built in Israel with government support. The ministry didn’t say who would build the satellite but it released a rendering of the spacecraft with state-owned IAI’s logo on one of the antennas.

When it contracted with SSL, Spacecom planned to have Amos-8 built and launched by 2020.

Spacecom is currently filling a void the loss of Amos-6 left over Africa by borrowing AsiaSat-8 from Hong Kong-based AsiaSat for $22 million annually. The four-year contract ends in 2020 unless Spacecom exercises its option to extend the lease by another 12 months. Spacecom has said it would prefer not to pay for a fifth year.

It might not have much choice, however, but to extend the lease into 2021. Building and launching a geostationary telecom satellite typically takes two to three years, and Amos-8 is not yet finalized.