Rocketplane faces funding crisis
Posted: Monday, September 10, 2007 6:15 PM by Alan Boyle
NASA has given notice to one of the winners of its $500 million spaceship competition that it’s no longer interested in working with the company due to its investment woes. That could open the way for termination of the agreement with Oklahoma-based Rocketplane Kistler as early as next month. In response, Rocketplane’s chief executive officer told me that “we are working on possible cures” for the funding crisis.
Rocketplane Kistler |
An artist's conception shows Rocketplane
Kistler's K-1 rocket blasting off.
|
George French, who serves as the company's chairman as well as CEO, declined further comment on the company's financial fix - which was first reported by Aerospace Daily & Defense Report. However, NASA confirmed that it sent Rocketplane the notice on Friday after the company missed two scheduled milestones in the Commercial Orbital Transportation Services program, or COTS.
"As a result of a review of that performance, NASA decided that further efforts by the company are not in the agency's interest," agency spokeswoman Beth Dickey told me today. She said the notice came in a letter signed by Scott Horowitz, NASA's associate administrator for exploration systems.
The letter itself did not mention any deadline, but under the terms of NASA's agreement with the company, the agency could terminate its relationship with Rocketplane 30 days after sending the letter, Dickey said.
Rocketplane Kistler and California-based SpaceX have each been getting a share of the $500 million set aside for supporting the development of private-sector spaceships capable of resupplying the international space station after the space shuttle fleet is retired in 2010. After last year's COTS competition, $207 million was allocated for Rocketplane's K-1 launch system, and $278 million for SpaceX's Falcon 9 rocket and Dragon pressurized capsule. Another $15 million covered NASA's administration costs.
NASA has been distributing the money as the companies meet pre-specified milestones, and Rocketplane received $32.1 million for hitting the first three milestones, Dickey said. However, the company failed to hit the fourth milestone - which was to raise $500 million in private investment by the end of May. Dickey said Rocketplane also missed the deadline for a review of the design for its pressurized cargo module, with the company saying its funding woes were preventing work on the review.
Rocketplane did raise $40 million in cash last year for the K-1, Dickey said, and some work was being done on the launch vehicle even though NASA funds were held up. Even if NASA terminates its agreement, Rocketplane will not have to refund the money already received. Under the termination scenario, NASA would set up a new competition for the remaining $175 million that has been set aside for Rocketplane, Dickey said.
The competitors for that money would likely include spaceship companies that are working with NASA on an unfunded basis, in hopes of getting future COTS funds. Those companies include PlanetSpace and t/Space as well as Constellation Services International, SpaceDev and Spacehab. Rocketplane could also enter the new competition, Dickey said.
French did not detail the "possible cures" for his company's financial woes, but Dickey said if Rocketplane were to attract $500 million in investment over the next month, NASA would take that into consideration when weighing whether to terminate the relationship.
The terms of the agreement also could conceivably be amended to make things easier on Rocketplane. The company has been facing difficulties in its money-raising efforts - in part because investors nowadays are warier of high-risk ventures (which take in private-sector space ventures as well as subprime housing loans), and in part because NASA has been sending mixed signals about how it intends to get crew members and cargo to the space station when the shuttles go away.
In addition to the relatively low-cost COTS program, NASA has been pursuing its own multibillion-dollar moonship development effort. The space agency has also made deals with the Russians for low-cost resupply flights after 2010, and recently put out a request for more information about resupply services. All these programs could be seen as supporting rivals for Rocketplane, SpaceX or other companies seeking to break into the spaceflight business - and that's not reassuring for would-be investors.
SpaceX says it has been meeting its financial as well as technical milestones for the COTS program - and the fact that SpaceX's founder, Elon Musk, has been putting more than $100 million of his own dot-com fortune into the company may have something to do with that.
Rocketplane Kistler's pockets don't seem to be quite as deep. What's more, Rocketplane has a separate program to develop a suborbital spaceship known as the Rocketplane XP. Reports from Oklahoma indicate that work on the K-1 orbital vehicle has slowed up the timetable for building the suborbital XP, and the current best guess is that the XP won't enter commercial service until 2010.
Rocketplane's French declined to provide specifics about the XP project, other than to note that other companies in the suborbital space industry have been weathering setbacks as well. California-based Scaled Composites, which is building the SpaceShipTwo rocket plane for Virgin Galactic, suffered a fatal accident during testing in July that founder Burt Rutan said would force a delay in SpaceShipTwo's schedule. Before the accident, Virgin Galactic had been targeting its first flights for 2009. Now 2010 sounds more realistic.
"Everyone is experiencing difficulties, but no one is giving up, and neither are we," French said.
