Given the bad economic news, it's time for NASA and the Obama transition team to assume the worst, and consider the possible impact of the credit crisis on space station operations.<
The first warning signs have ready appeared. News has come from Russia that after a four month delay, RKK Energia has received a $100 million dollar loan for its production lines. The loan was delayed, according to Russian government officials, because of the liquidity crisis impacting banks worldwide.
The Russians, by the way, have long used government loans to pay for international commitments for the International Space Station. Back in the mid 1990’s, after much prodding, pushing and complaining, the Russian government finally provided the loans to allow Russian industry to build the core block for ISS, known as the Service Module.
This current loan, provided by the Russian bank Sberbank, will be used for building the next two year’s worth of Progress and Soyuz spacecraft. The terms of the loan are not known. For example, whether it is a two year loan, or a series of commitments. It is apparently part of a financial package worth more than $18 billion from the Kremlin that is scheduled to be used for critical state needs, including defense, aerospace and space companies.
That’s all good. But the difficulty of Energia in procuring its desperately needed loan should be a warning shot to NASA and all of us who have embraced the commercialisation of space operations. Consider NASA’s COTS program, which paves the way for private companies to handle ISS cargo operations. How doable are the financial projections of the three bidders? What happens if the liquidity crunch prevents them from carrying out their routine business?
There’s no reason to reconsider COTS. But incoming NASA officials need to anticipate a financial market that will not be receptive to extending credit as in the past, and what this means for ISS. This financial storm has already taken down some pretty major players in developed consumer markets. Now is the time for the governmental members of ISS to consider—and anticipate--the impact of the economic crisis on companies meeting their ISS obligations.