NASA is denying reports that it has frozen plans to back a $92 million loan for a new rocket fuel plant near Cedar City while investigators determine whether its owner, PEPCON, has been selling a key rocket fuel ingredient to Iran.
National stories had quoted spokesmen for House Science, Space and Technology Committee Chairman Robert Roe, D-N.J., saying NASA Administrator James C. Fletcher assured him he would consider such a freeze.But NASA released a statement saying, "Dr. Fletcher did not freeze anything. Talks on financial arrangements are continuing as they have for weeks. When arrangements are finalized, an announcement will be made."
The NASA statement added, "Discussion and coordination among involved agencies is showing nothing that should preclude continued negotiations of financial arrangements."
A NASA spokesman said that, in essence, means "everything is full speed ahead" for PEPCON.
The company is seeking a $92 million loan from a private bank. But to make the loan more appealing and secure, the government is considering allowing surcharges on government purchases of PEPCON material over a seven-year period, during which all costs of building the new plant would be recouped, according to a recent General Accounting Office report.
PEPCON is building the Cedar City plant to replace one near Henderson, Nev., that was destroyed in an explosion last year. The new plant will be one of only two in the nation that make ammonium perchlorate, an oxidizer for solid rocket fuel.
The latest trouble for PEPCON grew out of an incident in February 1988 - a month before its Henderson plant exploded.
Dutch police in Rotterdam then seized at the request of U.S. Customs officials a shipment of 286,000 pounds of ammonium perchlorate manufactured by PEPCON that was being loaded on a ship bound for Iran.
Initial reports seemed to involve PEPCON only in a cursory way. It had sold the chemical to Girindus Corp. of Tampa, Fla. Girindus in turn sold the chemical to a Swiss company, which sold it to a West German chemical company, D.A. Dampf - which was loading it on the Iranian freighter.
PEPCON officials had said they did not know the shipment was bound for Iran. But a Las Vegas television station said it had received a tip that the company did know. The station took videotape of canisters in Nevada containing the label of the West German company. PEPCON officials told the television station those canisters must have been on returned products.
When Roe heard of the controversy, he began asking NASA and other involved agencies to freeze financial dealings with PEPCON until investigators determine exactly what happened. His committee is expected to hold hearings on the matter soon.