What’s going on with SaxaVord contractors?

What’s going on with SaxaVord contractors?

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On Friday, the Shetland Times reported that SaxaVord Spaceport officials had announced that construction workers on site had been given time off because the project was so far ahead of schedule. This was slightly undercut by a brief statement in which the company explained that development was firmly on track. The two statements appear to contradict one another. So, I thought I’d take a closer look.

Plans for SaxaVord Spaceport were submitted to the Shetland Islands Council (SIC) for approval on 6 January 2021. The plans were met with a number of objections with the Historical Environment Scotland group holding up construction through 2021 with SaxaVord being forced to submit a revised planning application in December. The revised application satisfied all objections and on 28 February 2022, SIC granted the company permission to build three rocket pads.

Since receiving planning approval, the company has improved infrastructure around the facility, which includes repaving roads, and in late 2022 completed the first launch table which will be used by Rocket Factory Augsburg (RFA). Most recently, the company began the steelwork for the integration building in June with the building starting to take shape. However, construction isn’t the most pressing barrier between the spaceport and its operational status.

In August 2021, CEO Frank Strang told the Unst Community Council (UCC) that the company had begun working on its Spaceport Licence and that five people were working on it full time. The application was submitted to the Civil Aviation Authority (CAA) in March 2022. As of June 2023, the company was working through request for information queries from the CAA. Also in June, Strang told the UCC that he believed the company would receive a spaceport licence in approximately eight weeks time and that the range licence would follow six to eight weeks later. The company has applied to host up to 30 launches a year from the spaceport’s three launch pads. However, the company has revealed plans to potentially request that the limit is upped to 50 launches a year at a later date.

The company has also submitted an Airspace Change application to the CAA. The change is required to ensure the safety of other airspace users from launch activities and vice versa. The “permanent airspace reservation” would be activated for the minimum specified periods necessary to support launch operations. According to SaxaVord project manager Elizabeth Johnson, this is expected to be approved by March 2024. However, this will not impede launch operations. Prior to recieving approval for a permanent Airspace Change, the company can apply for temporary danger areas.

The SaxaVord team has grown significantly in the last year. In 2020, the team was made up of just 14 people. In 2021, it was 21 and by January 2022 it was 30 employees. In March 2023, it was 60 employees and today, the company employs 80.

In a post on SaxaVord's LinkedIn page, a commenter raised concerns that contractors for SaxaVord were not being paid. You would think the company could deny this and refer that commenter to its contractors who could corroborate, right? Instead, the company’s civil works manager Archie Cairney explained that the commenter should not comment if they don't know the circumstances. That sounds a lot like a tacit confirmation, doesn't it? Yes, we're not paying them, but there's a good reason for it. It should be noted that although the commenter does not work for one of the contractors being used by SaxaVord, he is the managing director of a company that hires out Earth-moving equipment in Shetland.

To get to the bottom of this question, I took a look at funding. If they can afford to pay contractors then there’s likely not much reason for them not to.

In June, Frank Strang told the UCC that it would cost between £80 and £100 million pounds to develop SaxaVord. At the same meeting, Strang revealed that the company had spent £30 million over 14 months. In December 2022, the company stated in its newsletter that it had spent £19 million to date. This could be interpreted as the company burning through around £10 million every six months.

In order to come to a figure for the total amount raised by the company to date, I took a look at statements of capital following an allotment of shares published on the UK's Companies House website by Shetland Space Centre Limited, which is the company under which SaxaVord officially operates. In examining those records, I found the following:

23 Aug 2021 - £3,561,700.75

13 Sept 2021 - £1,672,557.35

29 Oct 2021 - £20,000.10

24 Jan 2022 - £1,797,948

20 April 2022 - £5,104,500

10 Oct 2022 - £2,977,970.60

6 Feb 2023 - £2,197,500.20

15 Aug 2023 - £1,999,998.53

I didn't go further back than 2021 as company filings show that in 2020 Shetland Space Centre Ltd had just £14,706 in cash on hand. This means that most of the major funding efforts like came after 2020.

The company also received £378,000 in funding from the UK Space Agency to fund the development of a launch rail for suborbital launch vehicles.

If that is the sum of the company’s funding efforts, then it has raised just over £19.7 million to date. A BBC article published on 1 August states that the company also has received £10 million in debt and loans. On that basis alone, the company should be coming right up to the line in terms of available cash. There is, however, another consideration.

On 17 May 2023, the UK's Science Minster George Freeman was answering questions from the Science, Innovation, and Technology Committee in a hearing regarding the future of the UK space launch sector. The meeting was convened in the wake of the failed Virgin Orbit launch. During the meeting, SaxaVord CEO Frank Strang gave oral evidence to the committee with his launch operations manager Dave Ballance.

During the meeting, the committee chair asked Strang to discuss the progress of SaxaVord and when a first launch can be expected to take place. During his answer, Strang revealed that the company had secured a £139 million debt facility from the markets. Considering the company had secured less than £18,00,000 pounds up to this point, the securing of a £139 million debt facility was stunning. Despite this, no additional questions were asked by the committee about the debt facility. Instead, the chair asked how much the company had raised from public sources. Strang replied that this was a sore point for the company. Although he admitted that the company had received the funding for the launch rail, he explained that without public funding nobody believes that you are real. Rather brazenly, he went on to challenge the government to match the company's funding efforts pound for pound.

Although the £139 million debt facility announcement was reported uncritically, SaxaVord itself did not make a single public announcement with no press release or social media post. There is also no indication of filings being made to Companies House confirming it. So, why would the company be against publicly announcing an instrument that all but guarantees that the spaceport will be completed?

Currently, the suborbital HyImpulse SR75 launch is the only mission from SaxaVord. The German launch startup received a launch licence in late July and has a vehicle that is almost ready for launch. Rocket Factory Augsburg’s maiden RFA ONE launch appears to be the next most likely to occur and the company recently securing €30 million is a positive sign. During the 17 May Science, Innovation, and Technology Committee hearing, Strang revealed that RFA had planned to begin stage testing at SaxaVord in July. This, however, obviously didn’t happen.

Strang has already stated that the first orbital launch from the facility will occur no earlier than the spring of 2024. Strang made these comments during a June UCC meeting. Interestingly, the meeting minutes state the following “The first Suborbital launch is planned for the beginning of October, this will be done by HyImpulse. Orbital one in the spring next year. This will be the first launch in UK/Europe. The next launch will be by Lockheed Martin.” That appears to indicate that the first orbital launch from SaxaVord will be aboard the ABL Space vehicle for Lockheed Martin and not the RFA ONE. However, it’s definitely up for interpretation. It could mean that Lockheed Martin will be the second orbital launch. That, however, also remains to be seen. ABL Space has one failed launch behind them and definitely isn’t ready to move launch operations to the UK just yet. That may, however, change with additional flights still planned for later this year. Latitude is another European launch company preparing to launch from SaxaVord. However, that launch will not take place before late 2024 or early 2025.

Launch is, however, only one of the planned revenue streams for SaxaVord. According to Strang, the three main streams for the spaceport are 1) launches, 2) tourism/accommodation (the company has revealed plans for a new hotel), and 3) data. The company also has a 50-year lease for a nearby airfield. The company plans to extend the runway and refurbish the airfield’s hangar. However, in the next two years, the company is unlikely to be generating much income.

If the company were to accept even a small portion of the £139 million debt facility, it could very quickly get into a situation where it cannot make the repayments considering its income potential over the first few years of operation. It may, as a result, be using the debt facility as a last resort. I do, however, remain a spectacle. The fact that so little is known about this debt facility and that the company appears unwilling to talk publicly about it makes me suspicious.

One last point on funding: In the June UCC meeting minutes, Strang is quoted as saying that the company has applied for £10 million pounds in funding from the European Space Agency. This appears to reinforce the idea that SaxaVord either doesn’t have the debt facility or is using it as a last resort.

This is a little off topic but I found it interesting. I have seen a lot of comments voicing concern that the strong wind conditions in Unst would make launching rockets from the site difficult for large portions of each year. During the 17 May Science, Innovation, and Technology Committee hearing, Strang answered this question directly.

“As you will be well aware, Shetland is way up there in the north. We got 10 years worth of Met data on the winds in Shetland. To launch, you need three hours of 30 knots or less of wind. In the months from the spring to the autumn, believe it or not, 95% of days have three hours—it could be three in the morning, of course—of suitable winds. In the winter, it is one day in three.”

30 knots, for context, is around 55 km/h. This appears to be typical. Atlas V, Falcon 9, and the Space Shuttle all had wind speed limits of around 30 to 34 knots. However, those are larger heavier vehicles. I have not been able to find any data on smaller vehicles.

Going back to that original statement: construction workers on site had been given time off because the project was so far ahead of schedule. The question then is: is SaxaVord ahead of schedule?

The UCC minutes from May and June give us three data points. Johnson stated in May that the steel and steel erectors for the first integration facility (Hangar A) would be arriving in June, allowing work to begin. In June, Strang stated that the spaceport licence would be approved in eight weeks and that the first suborbital launch was planned for the beginning of October. He also explained that work on Hangar A was three-quarters of the way through - that was in June.

It’s now August and 11 weeks have passed. So, the launch licence has not come as quickly as the company would have liked. Additionally, with HyImpulse receiving a launch licence with a window that only opens in December, an October flight is, of course, out of the question.

The steel and steel erectors appear to have indeed arrived when Johnson said they would, maybe even before. This allowed the company to steam ahead with work on Hagar A with Strang stating in June that the facility was three-quarters of the way through. However, a photograph from early August posted on the Shetlink community forum shows that the construction of Hagar A is still far from complete.

This is, of course, a subjective conclusion, but I don’t see work on the spaceport being “far ahead of schedule.” Are they “firmly on track”? Sure, I’d buy that. But if you’re on track, why send contractors home to ensure the development falls behind schedule?

It may very well be that the company has chosen to slow down, allowing it time to secure additional funding to be in a better financial position when it hosts the facility’s maiden flight. If they were to complete the spaceport this month, they would still be without a licence and would be waiting months for a maiden flight to take place. Slowing down does, as a result, appear to be a prudent move. Again though, this is very much speculative on my part.

In response to queries from European Spaceflight, the CAA told me that before granting a licence it must be satisfied the applicant has the financial resource to carry out their proposed activities. So, when a licence is granted we’ll be able to answer the funding question.

In terms of progress toward granting the licence, the CAA told me that they “don’t foresee major disruptions to timelines.”

“We’re making good progress on the Spaceport and Range Control Licence applications. At this point in time, we don’t foresee major disruptions to timelines. We, of course, must prioritise safety and there’s no guarantee at the end of the process that a licence is granted if we do not deem the activity appropriately safe.”

To confirm whether or not contractors are being paid, I did reach out to one of the project’s primary contractors, DITT Construction, who declined to comment.

SaxaVord is being heralded as a prime example of UK excellence in space. And to a degree, I think that’s deserved. However, I get extremely nervous when reporting around a project sounds more like propaganda than journalism. Strang has admitted that SaxaVord will need multiple clients to be economically viable. It will, as a result, be relying on unproven launch startups becoming operational success stories. And in a market as flooded as small launch in Europe, that is most certainly not a guarantee.

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