Space: Cosmodrome Corruption Crises Confirmed


December 4, 2019: The much troubled Russian space program suffered another embarrassing setback in November when the government revealed the results of its investigation into corruption that has crippled efforts to complete construction of the new Vostochny space center (Cosmodrome). Construction of Vostochny has been underway for nine years now and it is still not finished. Costs have risen as a result and are now approaching five billion dollars. The corruption involved 58 (so far) people convicted and punished for stealing $172 million. However, about 32 percent of that was recovered before it could disappear into offshore bank accounts or investments.

Some of the corruption involved the use of substandard materials. This was the case with a launch pad and the defective concrete has to be laboriously removed and replaced with concrete capable of handling large rocket launches. Most of the corruption involved payroll (reporting more workers working more hours that was actually the case) and purchases (of items that did not exist or were substandard).

The government auditors admitted that a lot of the problem was the result of Russia still keeping details of such projects secret. Many of the scams would have been obvious if, as in the West, financial details of construction were public (available for anyone to see) records. “Classified” (secret) projects are always more prone to corruption or incompetence that goes undetected longer because few people are monitoring how the money is spent.

Vostochny is for commercial, not military, launches and keeping construction details secret does not encourage potential foreign customers. Vostochny will only be profitable if there are a lot of foreign customers. The government wanted to make Vostochny a project demonstrating how the Russian space program is making a comeback. Instead, Vostochny is turning out to be a reminder that not much has changed in Russia.

There have been some successes at Vostochny. In early 2016 the first satellite launch at Vostochny went off without a problem. A Soyuz rocket put three civilian satellites into orbit. The second launch took place in late 2017 and failed. The third launch, in early 2018 was a success. Another launch in late 2018 was a success as was one in early 2019. A second, larger, launchpad is under construction and by 2020 nearly half of Russian satellite launches will be carried out at Vostochny.

This new Cosmodrome is in the Russian Far East (Amur Province, just north of Manchuria), unlike the Soviet era site in what is now the independent state of Kazakhstan. Construction of the Amur site began in 2010 as Russia realized Kazakhstan was becoming a very difficult landlord. Construction of Vostochny initially moved quickly because the site used to be Svobodny 18, an ICBM base that was shut down in 1993 as part of the START disarmament treaty. Svobodny 18 was not completely abandoned in the 1990s and allowed to fall apart.

Amur Province was ultimately selected because of weather; the area averaged only 50-60 overcast days a year, had a dry climate and calm winds. There was also an absence of earthquakes.

Construction went according to schedule as the first launches were planned to begin in 2016. This was made possible by the government acting quickly when the first signs of corruption surfaced. Three construction executives were arrested for corruption and many others threatened. Construction continues, mainly to build equipment and facilities for handling heavier cargoes, including supplies and components for space stations. Over a year ago there were signs that the corruption arrests had not eliminated corruption and that a lot of it was still going on undetected. Until the release of the recent report, it was unclear how extensive the corruption was and how much damage it was doing to the construction effort.

While Vostochny will get Russian commercial launches, military launches will largely remain at Plesetsk, near the Arctic Circle. While Plesetsk's location is good for some types of launches (high inclination, polar, and highly elliptical orbits), the place is frozen most of the year and more expensive to operate because of the climate.

In 2013 Russia agreed to remain in Baikonur after the Kazakh government agreed to reduce its demands for higher rent. Russia had threatened to cut launches at Balkinor from 75 percent of the Russian total to ten percent by 2020. Kazakhstan originally demanded a lot more money and threatened to shut down Balkinor if the Russians did not pay. At the time Russia paid Kazakhstan $115 million a year for the use of Balkinor, in addition to the $50 million a year spent to maintain the facility. Many Kazakhs saw Balkinor as an ATM and anytime there was a cash shortage, they could make a withdrawal and the Russians would be forced to pay. The Russians convinced the Kazakhs that plans to leave Balkinor were real. It was pointed out that Balkinor was where the commercial satellites were launched and Russia sold these “launch services” to a growing list of foreign customers. If Russia paid the higher fees the Kazakhs were demanding the foreign customers would have to pay more than what other competitors charged and Russia would have to abandon Balkinor as uneconomical.

Russia had already moved all military launches to the smaller space center at Plesetsk. Russia can turn Baikonur into a big cash cow via commercial launches but the Kazakhs were finally convinced about this when construction of Vostochny began and moved ahead with unusual speed. Thus the Kazakhs agreed to more reasonable rent and, for the moment, Russia's largest satellite launch site is still in Kazakhstan. With Vostochny now operational the Kazakhs have to pay more attention to being a good landlord.

Founded in 1955 by the Soviet Union, Baikonur was long the main satellite launch facility for the Russians. But after the breakup of the Soviet Union in 1991, Baikonur found itself in the newly minted Central Asian nation of Kazakhstan. There it became more expensive and difficult for the Russians to use. Russia has leased the Baikonur complex from Kazakhstan since 1991 but this has led to periodic disputes over lease terms and the danger to locals from launch accidents. These disputes were settled but the costs kept rising. The Russians valued the Baikonur launch site as it is very efficient for some types of launches; geostationary, lunar, planetary, and ocean surveillance missions, as well as all manned missions. But having your main launch site in a foreign country was seen as untenable. So the Russians began building a replacement site to the east, in Russian territory. All manned space programs will be moved to Vostochny by 2020. At that point, the Russians will be able to abandon Baikonur, even though they have a lease that lasts until 2050. If the Russians leave, they will take or destroy all their gear with them. No point in leaving anything to help a competitor launch satellites.




Help Keep Us From Drying Up

We need your help! Our subscription base has slowly been dwindling.

Each month we count on your contributions. You can support us in the following ways:

  1. Make sure you spread the word about us. Two ways to do that are to like us on Facebook and follow us on Twitter.
  2. Subscribe to our daily newsletter. We’ll send the news to your email box, and you don’t have to come to the site unless you want to read columns or see photos.
  3. You can contribute to the health of StrategyPage.
Subscribe   Contribute   Close