The overnment wants the new satellite be built by Israeli industry in order to preserve the unique knowledge gained over decades.
The security-defense cabinet yesterday decided that Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) would build the Amos 8 satellite as part of government support being given to the Israeli space industry.
The decision was taken in view of doubts over the past year about the development and production of the Amos 8 satellite in IAI's outer space plant. Spacecom Satellite Communications Ltd. (TASE:SCC) announced in recent months that it would purchase its future satellite from US company Loral Space & Communications Inc.
The cost of developing the Amos 8 was previously estimated at $220 million. Spacecom claimed that the price was too high and contracted with Loral to buy a satellite for $112 million. In recent months, however, Spacecom twice halted its plans for a public bond issue for funding the deal. Space industry sources said that the reason for the halt was the announcement by the Israeli government that it would build its own communications satellite manufactured solely by local industry.
The Ministry of Science and Technology recommended that the new satellite be built by Israeli industry in order to preserve the unique knowledge gained over decades. Most of this activity took place at IAI. Senior company executives warned during the past two years that if the company did not receive a new order for a communications satellite, it would have to shut down its activity in this sphere and focus its efforts on other satellites.
The crisis in the communications satellite industry hit the headlines following the explosion of the Amos 6 satellite built by IAI for Spacecom. Two years ago, in early September 2016, a technical failure on the launch pad at Cape Canaveral in the US caused the destruction of the rocket and the satellite. The rocket was manufactured by SpaceX, owned by billionaire Elon Musk.