Graham Warwick/VANCOUVER

Canada is to order a European spacecraft bus for its Radarsat-2 earth observation satellite, after original supplier Orbital Sciences (OSC) was denied an export licence by the US Government.

Industry minister John Manley says Canada will select a supplier within the next eight weeks. The move will increase the programme's cost, now C$305 million ($203 million), and delay the launch, planned for 2001, he says.

Radarsat-2 is being built by Vancouver-based McDonald Dettwiler and Associates (MDA), a subsidiary of OSC. Following recent changes to US satellite export licensing rules, OSC was unable to obtain US Government approval to work with, or export to, MDA.

Manley blames the denial on US security concerns over the capability of the radar-imaging satellite and Canada's concept of dual nationality. US regulations place technology access restrictions on Canadians holding another nationality, he says.

OSC is the latest victim of the tightening of controls on US satellite exports after a Congressional investigation concluded that Hughes and Loral had illegally transferred technology to China.

In April, the Asia-Pacific Mobile Telecommunications consortium, which includes China, cancelled a $450 million satellite contract with Hughes after the US company was unable to obtain licences. Loral's $120 million Chinasat 8, originally scheduled for launch by China in May, remains undelivered following suspension of its licence.

The Washington DC-based Satellite Industry Association has warned that US manufacturers could lose $7-8 billion over the next five years if the US Government blocks commercial satellite sales to, and launches by, China.

Industry is concerned that the shift of responsibility for licensing to the State Department will result in approval delays and affect US manufacturers' competitiveness.

Licensing issues have also contributed to the delay of the next Sea Launch flight.

Source: Flight International