April 1, 2008 / 6:26 PM / 10 years ago

Space firm dismisses Alliant Tech deal fear

OTTAWA (Reuters) - A Canadian space firm seeking to sell sensitive satellite technology to U.S. ammunition and rocket maker Alliant Techsystems Inc ATK.N on Tuesday dismissed concerns that the deal could endanger national sovereignty.

MacDonald, Dettwiler and Associates Ltd (MDA) MDA.TO wants to dispose of a range of satellite technology and land-based data processing centers, some of which are used by the Canadian government. These include the high-tech Radarsat 2 satellite, launched last December.

Critics say the sale could result in Washington preventing Ottawa from seeing data from the satellite, such as images revealing whether U.S. ships were sailing through Canada’s Arctic waters.

MDA Chief Executive Daniel Friedman said Radarsat 2 was a Canadian satellite operating under a license granted by the Canadian government.

“This license provides the government with control over operation of the satellite and the use and distribution of the date received from the satellite. It is important to note that this control is not dependent on (the) corporate nationality of the licensee,” he said.

“I believe the government of Canada has all the necessary powers and authority to ensure that in future it will continue to exercise full control over Radarsat 2,” he told Parliament’s standing committee on industry, science and technology.

Federal Industry Minister Jim Prentice has until April 21 to decide whether to block the $1.325 billion deal on national security grounds. MDA also plans to sell a unit that makes robotics for the International Space Station.

Ottawa is obliged to review all proposed foreign purchases of Canadian companies worth C$270 million ($262 million) or more. It has never vetoed a deal.

The question of satellites has caused problems between Canada and the United States in the past. Canadian officials said in 1999 that NASA would not launch Radarsat 2 because it was too powerful and could threaten U.S. security.

The satellite eventually made it into space on the back of a Russian Soyuz rocket launched from Kazakhstan.

Friedman did not directly address questions about NASA, saying only that MDA had initially had a launch deal with Boeing (BA.N) which fell through for technical reasons.

Pressed by legislators on why the sale was a good idea, Friedman said Canadian federal spending on space was not enough to support a company of MDA’s size.

“We must continue to grow our export business and by far the largest growth opportunity for exports is represented by the U.S. space and defense market,” he said.

“To gain the required access to this market we need a partner ... that employs U.S. citizens with government access and security clearances. Without this partner, we cannot get the work,” Friedman said.

($1=$1.03 Canadian)

Reporting by David Ljunggren; Editing by Bernadette Baum

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