MEPs have launched an investigation into the $ 500 million (£ 400 million) government investment in the bankrupt satellite company OneWeb, amid the disclosure that a senior official warned taxpayers could lose.
The government took part in the broadband satellite company as part of a post Brexit space strategy.
On Wednesday it emerged that a permanent secretary in office raised concerns, warning that the deal was "unusual".
The head of Parliament's works council, Darren Jones, called the deal a gamble.
Jones, chairman of the Committee for Business, Energy and Industrial Strategies, said in a statement that news about the permanent secretary's concerns "raise concerns about this investment" and "raise further questions about how the government ... came to plump for this largely USA- satellite company went bankrupt. "
He went on to say that "using almost half a billion pounds of taxpayer money to wager on a" commercial opportunity "while failing to support manufacturing work with an industry agreement is both worrying and worrying."
OneWeb is creating a satellite network to support broadband and GPS services. But the company collapsed in March, blaming the Covid crisis for not being able to get more financial support.
Earlier this month, a joint bid from the British government and Indian mobile operator Bharti Global won a bidding war for the company.
But it was made clear on Wednesday that Sam Beckett, the chief official from the Department of Business, Energy and Industrial Strategy (BEIS), said that all proposed money could be lost.
"While in one scenario we could get a 20% return, the central case is marginal and there are significant downside risks, including the fact that venture capital investments of this type can fail, with the consequence that all the capital value stock may be lost, "she wrote.
The comments were part of a letter for "ministerial leadership", a way for public officials to register a stronger opinion than usual. Ministers are obliged to formally bypass the official's objections to instruct the expense to move forward. The content of the letter must also be made public.
Overcome worries
Beckett said that an assessment by the British Space Agency identified "substantial technical and operational obstacles" that OneWeb would have to overcome in order to become a "profitable and profitable business" and that there was a high probability that additional taxpayer funding would be needed.
However, commercial secretary Alok Sharma overcame Mrs. Beckett's concerns and the government continued with the offer.
Sharma said that Chancellor Rishi Sunak has agreed to the purchase and that other private sector investors have been involved in the offer for OneWeb.
The government hopes that London-based OneWeb can take the place of the EU Galileo program, which the United Kingdom left when Brexit entered into force in January of this year.
Beckett said: "I fully understand your, the Prime Minister and Chancellor's interest in wider benefits such as the potential long-term geopolitical benefits for foreign policy and soft power that would come with the sovereign ownership of a fleet of satellites.
"Also, I don't underestimate the potential opportunity this investment represents for UK interests globally.
"He would be the first mega-constellation operator, if he succeeded, and would have the potential to connect millions of people, especially those in remote rural locations without broadband access."
However, she wrote that she could not be sure that the investment met Whitehall's stringent value for money requirements and therefore asked for formal order from Mr. Sharma to proceed.
OneWeb, which is based in London and a production base in Florida, aims to complete the construction of a constellation of satellites in low Earth orbit.
- The United Kingdom acquires a stake of £ 400 million in the satellite company OneWeb
- The British space company blames the coronavirus for collapse
The UK government sees satellites as a way to meet commitments on the introduction of superfast broadband and believes that the OneWeb constellation could also provide a precise satellite navigation system.
Seventy-four satellites in an initial network of 648 had been launched when the company announced that it was seeking bankruptcy protection. Most experts believe that at least another $ 3 billion is needed to use the entire constellation.
