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Friday, December 07, 2012

Raise £1.2 billion By Telling the People It is for Space & Then Spend It on Our Chums

"The UK Space Agency is to invest £1.2bn in a range of space projects.

The aim, said the Government Agency is to "provide the UK with increased leadership in a rapidly growing global sector and building on the British space industry’s £9.1bn contribution to the economy."

No actually it isn't. This is indeed £1.2 bn new money beyond the £300 million a year we already provide to ESA but it isn't going directly to "invest" in the British Space industry

Britain’s investment in European space projects was agreed by the Minister for Universities and Science, David Willetts as he finalised negotiations for the UK at the European Space Agency’s (ESA) Ministerial Council in Naples, this week.

  Yes its going to European bureaucracy.

     OK some of it will not stick in their sticky hands but come back to, under European administration, be spent by favoured British companies.

      Some of that returned investment will even do some good.

Reaction Engines Ltd believes its Sabre engine, which would operate like a jet engine in the atmosphere and a rocket in space, could displace rockets for space access and transform air travel by bringing any destination on Earth to no more than four hours away.

That ambition was given a boost on Wednesday by ESA, which has acted as an independent auditor on the Sabre test program.

"ESA are satisfied that the tests demonstrate the technology required for the Sabre engine development," the agency's head of propulsion engineering Mark Ford told a news conference.

"One of the major obstacles to a re-usable vehicle has been removed," he said. "The gateway is now open to move beyond the jet age."

The space plane, dubbed Skylon, only exists on paper. What the company has right now is a remarkable heat exchanger that is able to cool air sucked into the engine at high speed from 1,000 degrees Celsius to minus 150 degrees in one hundredth of a second.....

The firm has so far received 90 percent of its funding from private sources, mainly rich individuals including chairman Nigel McNair Scott, the former mining industry executive who also chairs property developer Helical Bar.

Chief executive Tim Hayter told Reuters he would welcome government investment in the company, mainly because of the credibility that would add to the project.

But the focus will be on raising the majority of the 250 million pounds it needs now from a mix of institutional investors, high net worth individuals and possibly potential partners in the aerospace industry.

   So 90% private means no more than £25 million from ESA. Not that good a return on our "investment" of £1,200 million.

  The "credibility" bit is, however, of considerable interest. Reaction Engines is Alan Bond eho designed the HOTOL space shuttle project years ago. Nobody doubts it would have worked but there was no government support for it.

   So does credibility mean that businessmen with money to invest are more convinced of the ability to understand this technology and its applications than they themselves are and so need the civil servants to assure them it works?

   Of course not. What it means is that the real investors have to be assured the government aren't going to wreck it. Call a commission of enquiry; enforce a (fracking) ban; spend 5 years refusing planning permission (eg Trump); build a windmill at thje end of the runway (eg trump); bring in a windfall tax when its working; nationalise it etc etc.

    Which shows how far from a free market we are, even when it looks like a market decision. Technical and business decisions take 2nd place, at best, to whether the government is on board. This is also why Virgin has given up using Lossiemouth for their launch site and gone to Sweden - nobody in the Scottish government was willing to say they wanted it and would fight the bureaucracy to stop them screwing it up.

   It, in turn, proves that had our government not been preventing it we could have had a free market space industry by now.

   Look, for example, at Bristol Space's Ascender. For years theyn have been able to build their suborbital Ascender for £50 million. 4% of the extra we are giving Europe's bureaucrats. This could have been raised by private investors if government had given it the nod years ago.

   More proof, if it were needed, of 2 things:

1 - that "the primary purpose of government spending is to pay government employees and their friends - the nominal purpose is secondary, at best" - in this case that they money raised in the name of space is cynucally never intended to be mainly used for that purpose, it is intended for European government employees, but it very much easier if it is called a "space development budget" rather than a "European fat cat development budget".

2 - the only way to fund space development, if that were really the intention, would be X-Prizes. If it is possible to raise 90% of the money commercially and if we accept thjat NASA, ESA etc are wasteful compared to private schemes then the estimate of X-Prizes being 33-100 times more cost effective than normal government contracts seems proven. Actually if we included the fact that British government projects are consistently 8 times more expensive than the engineering costs it would almost certainly be over well 100 times.

   Taking it as 100 times this £1.2 billion would be worth £120 bn ($200 bn)(20 years of NASA's budget) and the £300 million a year we are already providing would be 5 times NASA's annual budget.

   Now where would Britain's already fastest growing industry (10% a year & £10 bn) be by now if it had actually been given that much support - as UKIP, alone of all the parties, wants.

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