Ukraine faces $800 mln loss as Brazil pulls out of `Cyclone` project: Yuzhnoye Design Office

Tuesday, July 19, 2016 - 12:00 (EEST) Section: Latest news

Ukraine faces a loss of $800 million following Brazil`s decision to exit a project on a joint Cyclone-4 carrier rocket production, according to a press release issued by Ukraine`s Yuzhnoye State Design Office.
On July 16, 2015, the ambassador of Ukraine in Brazil was given a notice of denunciation of a long-term cooperation agreement regarding the production of the Cyclone-4 carrier rocket, according to the report. The Ukrainian side was given time until July 16, 2016, to present its objections.
”In the absence of such objections, the Brazilian side will be fully entitled to issue a document declaring the agreement permanently terminated, which, in our view, creates additional difficulties for protection of rights and interests of the Ukrainian side,” the company`s representatives argued.
Notably, the Ukrainian side represented by the State Space Agency of Ukraine (SSAU), which has been supervising the project, has not undertaken any measures yet.
”According to available information, as of July 16, 2016, no measures have been undertaken by the SSAU with regard to the performance of contractual functions and protection of Ukraine`s interests,” the statement read.
”According to provisions of the convention [Vienna Convention on the Law of Treaties], the lack of direct objections to the termination of the agreement will significantly complicate further protection of the rights and interests of Ukraine with no possibility to claim compensation for damages suffered by the Ukrainian side in connection with termination of the treaty,” according to the statement.
As UNIAN reported earlier, in late May 2016, Head of the State Space Agency of Ukraine Lyubomyr Sabadosh said Ukraine would demand compensation at the international court for unilateral termination of the agreement by Brazil.
UNIAN memo. Ukrainian-Brazilian Cyclone-4 project provides for development of a new Cyclone-4 space carrier vehicle in Ukraine and the construction of the ground complex for its launches at the Alcantara launch site in Brazil. The project aims to provide spacecraft launch services for the benefit of Ukrainian and Brazilian space programs, as well as those of other countries on a commercial basis. The launch was initially scheduled for 2010, but was later postponed to 2013, and then to 2014. In May 2015, the SSAU head stated that Brazil had suspended work on the project. Ukraine is said to be considering the possibility of relocating the launcher complex from Brazil to the United States.