Russia’s Space Industry to Merge into Holdings

The reform should make the troubled industry more manageable, Popovkin said after a governmental meeting in Moscow.

The draft list of industries to get separate holdings includes orbital spacecraft development, in-orbit operation, guidance systems, scientific research, testing and strategic rocketry, Deputy Prime Minister Dmitry Rogozin said, also on Monday.

The centralization may be taken a step further, with the Federal Space Agency, Russia’s analogue of NASA, transformed into a state corporation that would replace the prospective holdings, Popovkin said.

The government considered creating a single "space corporation” for three years before deeming the idea ineffective, said Rogozin, who oversees defense and space industries.

But Popovkin said the idea may be revitalized depending on the performance of the upcoming holdings. Rogozin is to report to the government on the results of the reform after the first quarter of 2013, Popovkin said.

The government also ordered a 50-percent salary increase for all employees in the space industry, Popovkin said. Salaries currently average 37,500 rubles ($1,200) a month, he said.

Russia’s space industry has seen a steady rate of botched launches in recent years, the most recent being the loss of two telecom satellites in August, blamed on a malfunction of the launch vehicle, the Proton M rocket.

Another Proton M, set to bring into orbit the Mexican telecom satellite Satmex-8 on Dec. 27, was damaged during transportation to Baikonur spaceport in Kazakhstan last week, though a replacement rocket will make it possible to send the Satmex-8 into space on schedule, the rocket’s manufacturer, state-owned Khrunichev company, said on its website on Monday.

"The reform of Russia’s space industry is long overdue because the industry is barely manageable now,” Igor Marinin, editor-in-chief of the respected industry publication Novosti Kosmonavtiki, told RIA Novosti.

During the 1990s, when the industry all but lost funding, it grew fractured, with its 130-plus enterprises developing vastly different ownership structures and with many becoming de-facto independent of the Federal Space Agency, Marinin said.

However, grouping the enterprises into holdings will be a trying task because many of the companies service several sub-industries at the same time, he said.

Marinin was skeptical about a prospective state-owned space corporation, noting that "then there would be no competition in the industry at all.”