RIO DE JANEIRO – The Brazilian government is ending a decade-long project to operate Ukraine’s Cyclone-4 rocket from Brazilian territory following a government review that found too many open questions about its cost and future market success, the deputy chief of the Brazilian Space Agency (AEB) said.

It remains unclear whether the decision will force Brazil to pay Ukraine any financial penalties for a unilateral cancellation of a bilateral agreement. Over the years, the work to build a launch facility for Ukraine’s Cyclone at Brazil’s Alcantara spaceport has suffered multiple stops and starts as one side or the other fell short on its financial obligations to the effort.

“It is an accumulation of issues,” said Petronio Noronha de Souza, AEB’s director of space policy and strategic investments. “There have been challenges on the budget issues, on the technological aspects, in the relationship between Brazil and Ukraine and in the actual market for export that would be available. So it is a combination of things.”

In an April 14 interview at the Latin America Aero and Defense, or LAAD, show here, Noronha de Souza said a formal government announcement, likely from the Ministry of Foreign Affairs, on the program’s stoppage was imminent.

The Alcantara Cyclone Space project was to give Brazil and Ukraine access to the global commercial launch market for satellites in low and medium Earth orbit, with the possibility of launching very light telecommunications satellites into geostationary orbit.

Noronha de Souza said the idea of making a profit in the launch business is now viewed as an illusion. The project, he said, was unlikely ever to be able to support itself on commercial revenue alone.

“Do you really believe launchers make money in any part of the world? I don’t believe so. If the government doesn’t buy launches and fund the development of technology, it does not work,” he said.

“Everybody talks about SpaceX [of Hawthorne, California] like it’s magic, somehow different. It’s no different. Their connections with NASA have been important. If NASA had stopped the funding, where would they be? I really appreciate what they are doing, but I doubt whether launch bases can make money and survive on their own without government support.”

The Brazilian government’s decision to end the Cyclone-4 project comes as its ambitious 10-year space program 2012-2021 — with a budget of 9.1 billion Brazilian reals ($3.2 billion) — comes under pressure for the first time with the sag in the overall Brazilian economy.

The billion-real budget for 2015 was approved in 2014 as planned but along with most other government spending is now facing a review to determine whether midyear cuts will be imposed. A decision is expected by May. Until then, AEB is limiting its spending to smaller-scale projects.

While the Cyclone-4 project is about to end, Brazil has maintained as a strategic goal the development of a space-launch vehicle from the Brazilian military-owned Alcantara facility. As such it is continuing work with the German Aerospace Center, DLR, on a small solid-fueled vehicle, called VLM-1 for Microsatellite Launch Vehicle, that began as a launcher for suborbital missions and has evolved to a small-satellite-launch capability.

It is a much smaller vehicle — a few hundred kilograms into very low orbit — than the Cyclone-4 but still meets the requirement that Brazil have autonomous access to space. AEB and DLR are also working — with no exchange of funds — on a liquid-propulsion engine called L-75.

“Even if it’s just a niche launcher, we have maintained the goal of having our own launch vehicle,” Noronha de Souza said.

AEB is a purely civilian agency funded through the Science and Technology Ministry. Until a few years ago, the Brazilian military had not been a player in the nation’s space policy. That is starting to change with the Brazilian Defense Ministry’s establishment of space-related operational requirements.

Among those requirements is a radar Earth observation satellite, which AEB has penciled into its program for around 2020. Aside from allowing the use of its Alcantara site, the Brazilian military is not yet financing any AEB work, but the military is expected to pay for launches of its satellites once the development is completed.

Unlike its neighbors — Chile, Peru, Colombia and likely others — Brazil has signaled no interest in purchasing its own high-resolution optical satellite. Noronha de Souza said high-quality, high-resolution imagery is available on the commercial market today and that, for now, is enough to satisfy Brazil’s needs.

He also questioned whether nations purchasing their own satellites have fully measured the challenge of training a cadre of image analysts to extract maximum value from the data. Brazil, he said, has been working with Landsat data for more than 30 years and has image-interpretation expertise that in the early going came from training provided by the U.S. Geological Survey.

AEB is finishing design of a small multimission satellite platform whose first launch will be of the Amazonia-1 Earth observation payload, with a medium-resolution imager of 10-meter-resolution, similar to the capacity of today’s larger China-Brazil CBERS-4 satellite, which is in orbit.

Brazil and Argentina’s CONAE space agency will be dividing responsibility for an ocean-observation satellite system, using the same multimission platform, called Sabia-Mar. The first Sabia-Mar is scheduled for launch in 2017, with a second in 2018, according to AEB planning.