CHANGE IN SATELLITE LAUNCH PLANS

[Anchor Lead]

The launches of the Korean multi-purpose satellite Arirang-6 and the Compact Advanced Satellite 500-2 have been scrapped because of international sanctions imposed on Russia due to its invasion of Ukraine. The Korean satellites were to be launched into space using Russian projectiles. The replacement of the scheduled launches will likely cost tens of billions of won, but chances of getting back tens of billion of won paid in contract money to Russia are quite slim.

[Pkg]

The Compact Advanced Satellite 500 was launched last year. Its mission is to observe disasters. The satellite was lunched using a Russian projectile. The Compact Advanced Satellite 500-2 and the multi-purpose satellite Arirang 6 were also to be launched using Russian projectiles in the second half of 2022. Both satellites have already undergone performance tests, but their launches have hit a snag. Because of Korea's participation in sanctions against Russia, which ban exports of strategic materials due to Russia's invasion of Ukraine, Korea can no longer use the projectiles of entities affiliated with Russia's Aviation and Space Agency. The Korean government said last month it was trying to proceed with the plans to use Russian projectiles as well as find alternatives. However, recently it has concluded that launching the satellites from Russia would be unfeasible. The government is looking for ways to launch the satellites either from the U.S. or Europe, and has requested the parliament to include the substitute launch cost of 47.3 billion won in the 2023 state budget.

[Soundbite] (Ministry of Science and ICT Official(VOICE MODIFIED)) : "The satellites are now ready. We need to launch them so they can fulfill their roles as soon as possible."

The problem is Korea may never retrieve the contract deposit it has already paid to Russia. The deal signed by the two countries stipulates its cancellation in case of war or other unforeseeable catastrophes. Korea has paid more than 46 billion won for the launches of the two satellites so far. The contract deposit, excluding local tests, is estimated at tens of billions of won.

[Soundbite] Lee In-young(Science, ICT, Broadcasting and Communications Committee) : "Terms and conditions need to be modified and preventative measures should be taken to prepare for unexpected events."

The Ministry of Science and ICT says it's going to negotiate the refund of the contract deposit. If the talks do not proceed smoothly, it will request the Korean Commercial Arbitration Board to arbitrate the case.