Financial

Surplus cash funds Sunspace deal

Read time 2min 20sec
The DST's purchase of Sunspace is funded through unspent money initially allocated to other areas.
The DST's purchase of Sunspace is funded through unspent money initially allocated to other areas.

Amid an ongoing clampdown on government spending, the state has moved a total of R27.5 million from various other programmes within the Department of Science and Technology (DST) to pay for its purchase of Sunspace.

The cash has been shifted from unspent money meant for goods and services, as well as employee compensation, across several sub-programmes, in tranches of between R3 million and R12 million. According to the revised estimates of national expenditure, the amounts are for the "purchase of Sunspace assets".

The DST bought Sunspace earlier this year for R55 million, and paid the first R27.5 million instalment in August. The department's purchase of the satellite manufacturing company was the only viable solution after it hit a difficult period due to a lack of government support.

Sunspace battled for several years before it was bailed out, leading to staff going without salaries for about two years. The initial tranche was mainly used to settle some of the outstanding money due to employees.

Under the deal, most of the former staff moved to Denel, which has created a unit to host the intellectual property and capabilities, based in Stellenbosch. Denel has since created Spaceteq, incorporating Sunspace, which aims to develop a multispectral, high-resolution, Earth-observation satellite called EO-Sat1, for operation by 2017.

More money

Another R37.3 million for space science has been allocated to the department, taking the total amount available for this initiative this year to R846.6 million.

During the first half of the year, the period upon which the medium-term budget is based, the department spent 65.1% - or R4 billion - of its total budget. Last year, it spent 99.5%, of which 62.8% went into the first half.

The gain was due to some projects being wrapped up earlier than expected, notes treasury documentation.

Government will spent a total of R16.8 billion on science and technology in the current financial year, a figure that will rise to R19.5 billion by the 2016/17 year, at an average annual growth rate of 5.2%. "Budgetary support is provided to finance research, upgrade facilities and improve regulatory oversight."

Treasury also notes the Square Kilometre Array (SKA) receives "substantial funding". In February, treasury said the mega project would receive another R1.1 billion in funding over the next three years.

The SKA, which aims to probe issues such as the fate of the universe, is made up of 500 000 antennas scattered across 3 000km in both Southern Africa and Australia. Work on the two phases should start in the next few years and wrap up in 2024, at an estimated cost to member countries of EUR1.5 billion.

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