SaxaVord Owes Contractors Money it Can’t Pay

By Andrew Parkinson,
Published by European Spaceflight, 16 November 2023

Shetland Space Centre Limited owes approximately one million pounds to Shetland-based DITT Construction for the development of SaxaVord spaceport, two sources told European Spaceflight. The company currently does not have the funds to pay the amount after a £139 million debt facility promised by CEO Frank Strang in May failed to materialize.

The construction of SaxaVord Spaceport began in late March 2022. At its peak, more than 60 people were working on site to build out key infrastructure that would enable the facility to support launches of small rockets from Scottish shores. However, by August 2023, things had changed, with at least a portion of contractors being sent home. According to a statement given to the Shetland Times, the official reason for the contractor’s departure was that workers were being given “time off because the project was so far ahead of schedule.” That, however, now looks to have been cover for its financial troubles.

Speaking to European Spaceflight, the sources have said that while an investment from billionaire backer Anders Polvson has allowed the company to keep the lights on, additional funding is needed to secure the future of the facility.

In June, SaxaVord CEO Frank Strang told the Unst Community Council that the company had spent £30 million over 14 months. This appears to represent the full extent of the company’s financial reserves plus in additional £10 million in debt and loans. This would leave the company flat broke and in need of additional funding.

In May, Strang told the Science, Innovation, and Technology Committee that he had secured a £139 million debt facility “from the markets.” Considering the company had, up to that point, secured approximately £20 million pounds to date, this appeared to mark a significant vote of confidence in the facility’s future. However, the debt facility has not been announced publicly in any way by the company, and there is no evidence that it has been used if it ever actually materialized.

The most significant elements of the facility that have been completed to date are the facility’s first launch pad and launch stool, which were completed towards the end of 2022, and the shell of the integration building. In January 2023, Germany’s Rocket Factory Augsburg announced that it had secured exclusive rights to the only launch pad that had been completed. With testing of the RFA ONE core stage expected to begin at the site in early 2024, this appears to be one of the elements of SaxaVord that has been completed on schedule. There is, however, at least one significant element of the infrastructure missing.

Eagle-eyed observers that have seen the images of the stool, which have been wildly distributed, may have asked how an RFA ONE rocket will be moved from the ground up onto the launch stool, which is several metres in the air. It may be that case that it intends to use a crane like SpaceX have been doing for early integrations of Starship. However, that will only be a temporary fix.

In late October, RFA UK received a £3.5 million grant from the UK Space Agency, which is being funded through the European Space Agency’s Boost! programme. The funding is to be used to “develop and operate the infrastructure and test equipment needed to enable them to launch the RFA ONE launch system.” This should assist the company to deliver on a proposed Q2 2024 maiden flight of RFA ONE.

When asked for a comment on SaxaVord owing approximately one million pounds, a spokesperson said that the company does not “comment on commercial matters.” The spokesperson also included the same comment word for word that it had given to Shetland News in August.

“The overall project is firmly on track,” the statement read. “SaxaVord continues to have excellent dialogue with the authorities and is fully expecting to receive its spaceport licence very soon from the Civil Aviation Authority. We are looking forward to hosting vertical rocket launches in the coming months.”

DITT Construction was also asked to comment but declined to asking that all questions be directed to SaxaVord.

Although the non-payment of its bills has slowed progress, construction on the site has not ceased entirely. A photo released as part of the third edition of the SaxaVoice newsletter shows that the cladding of the site’s integration hangar has been completed.

Germany’s HyImpulse Technologies, which recently signed a letter of intent to conduct orbital flights from SaxaVord despite moving the maiden flight of its suborbital SR75 rocket away from the facility, has identified a lack of institutional support for the facility’s troubles.

In October, HyImpulse submitted written evidence to a Scottish Affairs Committee investigation. In its submission, the company explained that while SaxaVord had received just £378,000 in public funding, Sutherland had received at least £17.1 million and Prestwick £23 million.

“This distribution of public funds to support spaceport infrastructure is surprising since the main conduit for inward investment from launch service providers looking either to just conduct launches or looking to establish manufacturing in Scotland is SaxaVord Spaceport,” the HyImpulse statement explained.

See: Original Article