Spacecom cancels Amos-8 contracts with SSL and SpaceX

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WASHINGTON — Israeli satellite operator Spacecom said Sept. 25 that it has terminated contracts awarded earlier this spring to manufacturer Space Systems Loral and launch provider SpaceX for Amos-8, a telecommunications satellite the Israeli government said Sept. 3 would be built in Israel instead.

Spacecom notified the Tel Aviv Stock Exchange that it would not be making an Amos-8 down payment that was due Sept. 25, rendering the manufacturing agreement with SSL null.

Spacecom also disclosed that it had notified SpaceX that it was terminating its contract for a 2020 launch of Amos-8 aboard a Falcon 9 rocket. According to the filing, which Spacecom translated into English for SpaceNews from the original Hebrew, Spacecom “is entitled to receive a return of funds paid to SpaceX for the launch of AMOS-8, minus an agreed upon amount that will remain with SpaceX.”

Spacecom’s March decision to buy Amos-8 from a U.S. company instead of state-owned contractor Israel Aerospace Industries (IAI) sparked concern that Israel might lose its ability to produce telecom satellites within its borders. While IAI has built Earth observation satellites for foreign customers, Spacecom is IAI’s primary customer for telecom satellites.

The Israeli government told Spacecom in late April that it intended to order a satellite from IAI and place it in the same geosynchronous orbit as most of Spacecom’s fleet. Then, on Sept. 3, Israel’s Ministry of Science and Technology announced that Amos-8 will be built in Israel with government financial support.

Spacecom ordered Amos-8 from SSL as a replacement for the IAI-built Amos-6 satellite destroyed during SpaceX’s Falcon 9 fueling mishap in September 2016. In December 2016, Spacecom leased an orbiting satellite from AsiaSat to serve as temporary replacement for Amos-6.

In its Sept. 25 filing, Spacecom was vague about what the government’s Amos-8 decree means for Spacecom’s Amos-6 replacement plans.

“As the company has earlier reported, the company is promoting in the best manner the AMOS-8 satellite program. The company is examining the program’s feasibilities with several options, including potential joint efforts with the Government of the State of Israel,” Spacecom said.

SSL’s loss of the Amos-8 contract deals another setback to the Palo Alto, California-based company’s geostationary satellite manufacturing business that parent company Maxar Technologies is considering selling, partnering off, or closing altogether.

The now-canceled $112 million contract called for SSL to build Amos-8 on a tight schedule — Spacecom wanted the satellite in orbit in 27 months. IAI said at the time it “stood no chance” competing with SSL on price without state support.