Debts or Incorrect Behaviour: What Is The Essence of The Conflict over Baikonur?

News recently emerged that Kazakhstan seized the property of the subsidiary of Roscosmos The Center for the Operation of Ground-based Space Infrastructure Facilities (TsENKI) operating at Baikonur and intends to recover the debt in the amount of 13.68 billion KZT from it. The media began to say that the conflict could lead to Russia's withdrawal from Baikonur. Orda.kz looked into the situation.

The international conflict broke out due to the Russian side's debt of 13.68 billion KZT owed to JSC "Joint Kazakh-Russian Enterprise "Baiterek". It arose as a result of the work on the EIA (environmental impact assessment) of the Soyuz-5 rocket.

The Compulsory Enforcement Service of Kazakhstan later arrested TsENKI's property in Kazakhstan. In addition, Roscosmos's subsidiary is prohibited from taking material valuables and assets out of Kazakhstan. The ban on departure also extends to the operation's head, he cannot leave Kazakhstan until the end of the investigation.

The court of the Astana International Financial Center made this decision at the end of November 2022. At the same time, a writ of execution was issued. TsENKI Representatives received a corresponding notification at the end of January 2023.

Some media believe that debt is a formal cause of the discord. The main reason for the arrest is allegedly tied to the new head of Roscosmos, Yuri Borisov. He displayed "incorrect behaviour" and expressed harsh statements. This concerns the criticism regarding the delay in launching the launch pad – a project that is being handled by the Minister of Digital Development and Aerospace Industry Bagdat Musin. In turn, Musin called Borisov's criticism a "diplomatic miscalculation."

No Rocket, No Pad

The Kazakh-Russian joint venture Baiterek was established in 2005 to implement a common space exploration program. It assumed the transition to the use of environmentally friendly launch vehicles on Baikonur instead of using Proton rockets with poisonous heptyl.

On March 4, the Baiterek project turned 18 years old, but nothing that was planned within its framework has really been implemented yet.

According to the agreement, Kazakhstan was responsible for the launch pad, and Russia was responsible for the development of the Soyuz–5 rocket. The rocket has been developed since 2017. It was initially planned to use the Zenit launch vehicle manufactured in Ukraine. But in 2014, due to the annexation of Crimea and the outbreak of war in the Donbas, Bayterek's hopes of using Zenit were no more.

Baikonur was supposed to get a second wind thanks to the new rocket and launch pad. Putin and Nazarbayev signed an agreement on it for their respective sides. The project was also dubbed the "Nazarbayev Start". The issue of renaming was considered even at the level of the Ministry of Digital Development and Aerospace Industry. Bagdat Musin assured that the decision on renaming will be made only after the completion of the project.

"We want to finish the work first, and then, in the process, when we present it to the heads of state, then we will make a decision on renaming,"

Bagdat Musin said on the sidelines of the government.

But a completely different question arises: will the project be completed in principle?

In July 2022, the Kazakh authorities announced that the opening of the ground infrastructure was postponed for a period of six to twelve months. Shortly after the appointment of the new head of Roscosmos, Yuri Borisov, he and the Minister of Digital Development, Innovation and Aerospace Industry of Kazakhstan, Bagdat Musin, agreed to postpone the date of the first test launch of Soyuz-5 from the Baiterek space complex from 2023 to 2024.

However, Borisov criticized the delays in launching the launch pad and Minister Bagdat Musin quite a bit. Musin called the criticism of the head of Roscosmas a "diplomatic miscalculation."

In November, the Kazakh side sued the Russian side for the lack of work on environmental impact assessment and won.

According to Artur Shakhnazaryan, a journalist and environmental activist from Atyrau, the work was not carried out because Moscow does not have the promised rocket.

"The project was doomed from the moment when the Ukrainian Zenit withdrew from the game. Creating a new rocket from scratch is quite a long process. Moscow says that the Kazakh side does not have a launch pad, and Astana complains about the lack of verification. Therefore, I believe that the absence of an EIA check is due to the absence of the rocket itself. But no one has cancelled the penalties, so Kazakhstan has all the legal grounds to collect a fine from TsENKI."

Now the plans for the completion of the Baiterek project or Nazarbayev Start look vague. In 2019, ex-Minister of Digital Development Askar Zhumagaliyev said that the construction of the complex will cost Kazakhstan $233 million. Meanwhile, the Russian side's rocket cost the state budget of the Russian Federation 62 billion rubles, almost 816 million dollars. Whether Baiterek will become another long–suffering unfinished project, dusty on the shelf, for both countries is quite likely, Artur Shahnazaryan believes.

"A similar outcome of events should have been expected since the agreement signed by the parties was initially poorly docked. Despite the fact that everything is legally and formally correct on our part, a launch site is needed for the EIA check. Why isn't it ready yet? Where were $233 million from the Kazakh budget spent? If there is a preliminary agreement to postpone the launch to 2024, then why all the fuss?"

Orda.kz has already sent an official request on this and other issues to the Aerospace Committee of the Republic of Kazakhstan.

Will Russia Leave Baikonur?

In 1994, Russia and Kazakhstan signed a lease agreement and determined the cost of the service at $115 million. Later, in 2004, the lease was extended until 2050. However, during this time, the rental amount has never changed. $115 million is only 5% of the budget of the entire Roscosmos.

In an interview, public figure and former activist of the "Anti-Heptyl" movement Mukhtar Taizhan shared that the lease agreements for Baikonur by Russia were concluded, "on a piece of a napkin between Nazarbayev and Yeltsin."

"According to the press of that time, we never received the $115 million in money. We receive them as spare parts for the railway industry, for wagons and locomotives, weapons for the Ministry of Defense and as military training in Russian academies. That is, it all counts,"

says Taizhan.

However, such "convenient" lease conditions did not prevent Russia from making a decision at the end of 2021 to suspend the lease for 16 objects.

"The Russian side has prepared a list of cosmodrome facilities that are unpromising from the point of view of further use, it includes 16 objects that are currently leased by the Russian Federation,"

RIA Novosti reported.

The list includes not only real estate but also a part of the property that has a residual value. It was reported that a special commission will remove the objects from the register of Russian enterprises and transfer them to Kazakhstan. Which happened just recently. By the decree of the Minister on March 3, 2023, Kazakhstan gratuitously accepted the property transferred by Russia. Among them: are a spacecraft, its components, an assembly and protection unit, its components and spare tools, and a system of testing objects.

After the arrest, the Russian media began to say that the conflict could lead to Russia's withdrawal from Baikonur. This is what the current situation hints at. Orda will look into the likelihood of such an outcome and whether Baikonur will be able to function without its main partner.

Original Author: Silam Aqbota

DISCLAIMER: This is a translated piece. The text has been modified, the content is the same. Please refer to the original article in Russian for accuracy.