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The Growing Costs of RADARSAT-1 and -2 RADARSAT-1 Guarding He Canadian Space Agency Es- the Henhouse? Timates That RADARSAT-1 Cost That’S Nothin’

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The Growing Costs of RADARSAT-1 and -2 RADARSAT-1 Guarding He Canadian Space Agency Es- the Henhouse? Timates That RADARSAT-1 Cost That’S Nothin’ The Growing Costs of RADARSAT-1 and -2 RADARSAT-1 Guarding he Canadian Space Agency es- the henhouse? timates that RADARSAT-1 cost That’s nothin’. Tabout $620 million. Of that, the I own it! taxpayers’ share was about 90%: $500 million from the federal government (81%) and about $57 million (9%) from four provincial governments (BC, On- tario, Quebec and Saskatchewan.)1 On the other hand, the corpo- rate sector is said to have chipped in about $63 million (10%).2 However, say- ing that these companies ‘shared the cost’ of RADARSAT requires some Adapted from a cartoon by Noah Kroese. creative accounting. Since these were A sly fox offered to provide the farmer with a henhouse the same companies the government but asked for several months rent in advance. The farmer hired to build RADARSAT, we could paid the fox using taxes he’d collected from the hens. The say their share was also paid with pub- lic funds. Their contributions were, in fox then used their money to build a henhouse. The farmer effect, self-serving business expenses. thought it was a great deal because the fox had “invested” At best, their donations were “dis- in the project. The fox, who’s clever, always votes for the counts” offered in exchange for lucra- farmer; while the chickens vote for him because they’re not. tive contracts to profit their businesses. The $620-million pricetag does U.S. spy agencies, which have pur- RADARSAT-1 data, the government’s not include RADARSAT-1’s launch. It chased millions of dollars worth of ad- cunning plan for RADARSAT-2 was to was blasted into space on November 4, ditional RADARSAT-1 data and time. cover almost all of its costs while hand- 1995, by a Delta-II rocket from Califor- ing it over completely to MDA. nia’s Vandenberg Air Force Base. This RADARSAT-2 The public money spent on was arranged through war-industry go- ccording to the Canadian Space RADARSAT-2 was apparently not for liath, McDonnell-Douglas, with whom Agency (CSA), the “total building or buying the satellite. Rather, NASA has a launch-services contract.3 Aproject cost” for RADARSAT- the funds given to MDA are described The launch, worth some $50 mil- 2, including its launch, as advance payments “in exchange for lion,4 was done “in exchange for rights “is estimated at $525 million, with the data” once RADARSAT-2 is opera- to access the satellite on a pro rata ba- government contributing $434 mil- tional. While privatisation advocates sis.”5 So, in lieu of paying NASA for lion, and the balance of $91 million see this as a sensible way to do busi- the launch, Canada gave the U.S. gov- provided by [MacDonald, Dettwiler ness, others see evidence of a corpo- ernment a supposedly proportionate and Associates] MDA.”7 rate-welfare state gone awry. share of RADARSAT’s data and mis- That means the government, i.e., the Even those praising the busi- sion time. A NASA media release noted: taxpayers’, share is about 83%. ness acumen of standing ‘free enter- “U.S. government agencies will have The CSA reported that these prise’ on its head, may not like how RA- access to all 6-month-old archived cost estimates had doubled from the DARSAT-2’s costs skyrocketed while RADARSAT data and direct approxi- original contract, which it described as the satellite itself remained earth mately 15 percent of the satellite’s a “firm price agreement.” In December bound. Here’s the CSA account of how observing time.”6 1998, when the CSA and its prime con- costs grew from the “firm” $225 million: Because RADARSAT-1 has tractor, MDA, signed their “Master “In March 2000, Treasury Board ap- operated day and night—regardless of Agreement,” the CSA agreed to pay proved an increase of $47.1 million weather conditions—for 10 years, the $225 million (74%), while MDA would to cover the cost of changing bus U.S. government has been able to con- “invest” $80 million (26%).8 So, while suppliers...and an increase of $12.3 trol some 90,000 hours of RADAR- the government’s share of the costs million for upgrades to existing sat- SAT-1’s “observing time.” Besides giv- rose from 74% to 83%, private indus- ellite ground station infrastructures. ing the U.S. government this direct tries’ share dropped from 26% to 17%. In June 2000, Treasury Board ap- control of the satellite’s operations, the However, the ownership, con- proved an increase of $108 million deal also gave U.S. agencies unlimited trol and (burdensome) profit-making re- to cover...a commercial launch as a access to years of its archived data. sponsibilities of this project, were never result of NASA withdrawing from However, all that guaranteed intended to be shared with the people the agreement to provide launch for access was not enough for the U.S. De- of Canada. Following on the ‘success’ RADARSAT-2 in exchange for partment of Defense, the CIA and other of privatising the marketing and sale of data.... In June 2001, Treasury Board 28 Press for Conversion! (Issue # 58) March 2006 approved an increase of $6 million References 5. Ibid. to cover...a potential future tandem 1. RADARSAT-1, Construction and Cost 6. NASA Media Release, “RADARSAT mission with RADARSAT-3. www.space.gc.ca/asc/eng/satellites/ Launch Aboard Delta II Rocket Set Nov. .... Additional delays will require the radarsat1/construction.asp 3,” October 27, 1995. www-pao.ksc.nasa.gov/kscpao/release/ CSA RADARSAT-2 project office 2. Ibid. 3. The Delta II Vehicle, January 1995. 1995/107-95.htm remain operational..., at an additional 7. CSA Annual Report, 2005. cost of $3.8 million.”9 www.ilc-usn.com/conversions/propuls/ elv/delta/dedesc.htm www.space.gc.ca/asc/eng/resources/ Until RADARSAT-2 is actually opera- 4. RADARSAT-1, Satellite Fact Sheet publications/report_mcp-2005.asp tional, one wonders how firm the cur- www.tbs-satellite.com/tse/online/ 8. Ibid. rent $434-million estimates really are. sat_radarsat_1.html 9. Ibid. Meet MacDonald, Dettwiler and Associates RADARSAT Given to Subsidiary of U.S. “Missile Defense” Firm ormed in 1969 by John References MacDonald and Werner 1. Corporate Profile <www.cbr.ca> Dettwiler,1 MacDonald, 2. Today’s IPOs F www.smallcapstocknews.com/markets Dettwiler & Assoc. (MDA) _ipos.asp?rsRowcount=305&totalcount=392 soon began trading on the To- 3. 3rd Quarter Report 1995, Orbital ronto Stock Exchange.2 sec.edgar-online.com/1995/11/14/00/ On August 31, 1995, 0000820736-95-000018/Section2.asp MDA became a wholly-owned 4. “Orbital Seeking Sale of Canadian subsidiary of Orbital Sciences,3 MDA,” Space & Tech, Feb. 26, 2001. a top U.S. rocket maker and con- www.spaceandtech.com/digest/ sd2001-08/sd2001-08-005.shtml tractor for the “missile defense” 5. “Orbital & MDA Finalize Merger,” weapons program. Orbital’s Washington Business Journal, Septem- purchase of MDA US$67 mil- ber 8, 1995. lion4 was finalised in November Google cache: mgv.mim.edu.my/ 1995,5 the month of RADAR- Articles/00638/96020633.Htm 6. “RADARSAT/Delta II Rocket Ready 6 www.mda.ca SAT-1’s launch. When our for Launch Nov. 3,” October 27, 1995. government privatised the When RADARSAT-1 was launched in www-pao.ksc.nasa.gov/kscpao/re- $1.15-billion RADARSAT sys- lease/1995/114-95.htm tem, MDA was the beneficiary. 1995, a U.S. “missile defense” firm 7. Ibid. In Dec. 1999, Orbital sold purchased MDA for US$67 million. 8. July 9, 2000. 33% of MDA shares to Mon- When our government privatised RA- www.spacenewsfeed.co.uk/2000 9. MacDonald Dettwiler & Association treal’s CAI Capital Partners, for DARSAT, MDA was the beneficiary. companies.infobasepub.com/ US$75 million.7 In four years, detail_pages/337.html MDA’s value had increased by 335%. gave Orbital a profit of about 390%. 10. Ibid. In July of 2000, Orbital sold During Orbital’s control of 11. Investor Group Exercises Rights to some more MDA shares on the Toronto MDA, the Liberal government priva- Acquire Orbital’s Shares in MDA Stock Exchange.8 Of the 6 million shares otpp.ca/web/website.nsf/web/MDA tised to MDA the marketing of all RA- 12. Marc Boucher, “MDA Back in Cana- 9 offered by Orbital for $14 each, it sold DARSAT-1 data and ownership of RA- dian Control,” April 19, 2001. about 1.5 million ($21 million). So, Or- DARSAT-2. This largesse accounts for www.spaceref.com/news/viewnews. bital still held about 62% of MDA.10 much of Orbital’s financial success. html?id=324 Orbital finally gave up its control of • Donations to Liberal Party: MDA made regular 13. Elections Canada MDA in early 2001, by selling 18 mil- donations to the Liberal Party, but no other, giving <www.elections.ca/ 11 lion shares for some US$163 million. them at least $139,000 (1993-2004).13 (This amount may intro.asp?section=fin The Canadian investors that bought not be complete as Election Canada statistics do not &document=index> Orbital’s remaining shares included the include donations made to riding associations, to MPs 14. CPP Investment Board Ontario Teachers’ Pension Plan Board, between elections or to party leadership campaigns.) (latest data, Mar. 31, 2005). the BC Investment Management Corp. • Canada Pension Plan (CPP): The CPP has about <www.cppib.ca/invest/ 12 holdings/pubequity> and CAI Capital Partners. $7.5 million invested in MDA.14 15. Ploughshares Working This put MDA back into the • Industry Canada: The Defence Industry Produc- hands of Canadian investors after six Paper 91-2 and the In- tivity Program and Technology Partnerships Canada dustry Canada website.
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