Fierce Competition Among Private Geostationary Satellite Companies Begins
KAI Files Objection to LIG Nex1 Selection
Disputes have arisen among related companies over the bidding for the development project of the Cheollian Satellite 5, a geostationary satellite. As this is a large-scale national R&D project with a total investment of 323.8 billion won scheduled through 2031, and the first to be led by the private sector, competition among companies is expected to intensify.
On April 22, Korea Aerospace Industries (KAI) announced that it had officially filed an objection on April 10 after the Cheollian Satellite 5 Project Steering Committee selected LIG Nex1 as the preferred negotiation partner for the satellite bus development project. The contested project is the "Geostationary Meteorological and Space Weather Satellite System and Bus Development" initiative. Previously, at the steering committee meeting on April 1, LIG Nex1 was confirmed as the preferred candidate based on technology and capability evaluations.
KAI claims that LIG Nex1 has almost no track record of leading or executing satellite system or bus development projects and does not possess satellite assembly or testing facilities, arguing that a proper technical evaluation was not conducted.
Issues of conflict of interest among evaluation committee members have also been raised. Some evaluators are reportedly former employees of the Korea Aerospace Research Institute (KARI) who were directly involved in the development of Cheollian Satellite technology in the past. KAI argues that, since the project structure allows for technology transfer from KARI if necessary, these evaluators could receive royalty payments. Although royalties are not part of the evaluation criteria, KAI asserts that the evaluation process was influenced because LIG Nex1’s proposal involves paying higher royalties. KAI points out that similar issues have repeatedly occurred in other projects, such as the Korean Launch Vehicle Advancement Project and the Korean Positioning System (KPS) structural system project.
LIG Nex1 maintains that there is no issue, as it possesses core technologies such as image radar control devices. The company claims it has participated in projects including the high-performance Synthetic Aperture Radar (SAR) payload for the Multipurpose Practical Satellite 6, the Cheollian 3 geostationary public multi-purpose communications satellite, the Korean Positioning System (KPS), and the microsatellite system project. LIG Nex1 also counters that it has invested in and is set to complete its own satellite system integration and testing facilities, with the new testing facility scheduled for completion in June.
The Korea Meteorological Industry Technology Institute plans to review the objection and respond within the 30-day deadline. Industry insiders believe that this conflict has arisen as competition in the sector intensifies, with more companies entering the space systems business. There are concerns that such objections may become more frequent during the evaluation stages.
An industry official stated, "Since technical evaluations are often based solely on qualitative assessments, conflicts could intensify as more large-scale projects begin. As the industry grows, it is increasingly important to establish a fair evaluation system."
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