WASHINGTON — A U.K. parliamentary committee said it will review the steps that led to the government’s bid for struggling megaconstellation startup OneWeb, arguing that the $500 million investment decision was rushed and jeopardizes British taxpayer dollars.
Darren Jones, chair of the Business, Energy and Industrial Strategy Committee in Parliament, said Wednesday that the decision to take a 45% stake in OneWeb appears to have been hurried through before the government could fully evaluate whether it was a smart move.
“This whole decision-making process seems unusual and doesn’t have the transparency that it requires,” he said in a video posted to Twitter. “Therefore, my committee will be holding an inquiry to understand the decision making behind this purchase.”
Jones’ committee oversees the British government’s Department for Business, Energy and Industrial Strategy, which announced July 3 that it and partner Bharti Global, an Indian telecommunications company, were acquiring OneWeb. Bharti Global is also investing $500 million into OneWeb, which raised $3.4 billion before filing for Chapter 11 bankruptcy protection in March.
Jones on July 22 released a series of letters between Samantha Beckett, the acting permanent secretary at the Department for Business, Energy and Industrial Strategy, and Alok Sharma, that department’s Secretary of State. In a letter dated July 8 — five days after the U.K. announced its intent to co-purchase OneWeb — Beckett wrote that she had “insufficient time to make a full assessment of the proposed investment.”
Beckett said while there were “good reasons to proceed” with investing in OneWeb, “it was not possible for me to assure Parliament that the investment represents value for money to the standards expected.”
One week prior to the OneWeb investment, Sharma informed Beckett that he had received approval from Rishi Sunak, Chancellor of the Exchequer (the government’s chief financial minister) to proceed with buying the megaconstellation startup out of bankruptcy.
Sharma said he consulted with the U.K.’s treasury, space agency, members of his department and cabinet officials before pledging to invest in OneWeb, and concluded the government would have a positive return.
Sharma said OneWeb could connect millions of people globally to the internet, and has the added upside of “potentially bringing future manufacturing to the UK.”
OneWeb currently builds its satellites at a purpose-built $85 million factory in Florida with Airbus through the joint venture OneWeb Satellites. Before filing for bankruptcy, OneWeb launched 74 of a planned 648 satellites.
Jones, in announcing the inquiry, took issue with the lack of clarity on if, when and how much of OneWeb’s constellation would be produced in the U.K.
“Using nearly half a billion pounds of tax-payers money to gamble on a ‘commercial opportunity’ whilst still failing to support manufacturing jobs with a sector deal is both troubling and concerning,” Jones said in a July 22 statement.
OneWeb’s bankruptcy court approved its acquisition by the U.K. government and Bharti Global on July 10. The purchase is expected to close late this year.