Roscosmos changed its status from agency to corporation. What does it mean for space industry in Russia ?

So from 1st January 2016 there will be no Roscosmos ! It is not a joke; agency in present form will not exist anymore. President Putin under special decree dissolved Federal Space Agency Roscosmos. Its successor will become from 1st January 2016 new organization called State Corporation for Space Activities Roscosmos. Putin’s decree is not something unusual if we remind two last years in Russian space industry. In 2013 Russian Deputy Prime Minister Dmitry Rogozin announced about establishing new state owned corporation named United Rocket and Space Corporation joint-stock company. Main objective of Corporation was renationalizing Russian space industry to bring it to new level of efficiency and competitiveness on world space market. After collapse of USSR Russian space industry divided in various state owned companies, design bureau and research centers. Their ranges of production and research were not coordinated – it was giving an effect with lack of coherent development. United Rocket and Space Corporation (URSC) was considered as a cure for this situation – in 2015, after two years of existence, URSC consists 48 companies and 14 research centers. URSC became fully state owned company with, well-known from Soviet times and still widely accepted in Russia, central managing. Next step after renationalization will be joining URSC and Roscosmos. To perform this action it was necessary to change character of Roscosmos from federal agency to state owned corporation. Putin’s decree is generally final step before establishing state-owned giant space corporation.

Intensive changes in space industry, are not resulting in impressive way at the moment. First sign of restructuration was employment reduction. From around 250000 people employed before establishing URSC this number is planned to be reduced on 2016 to 196000 (comparing American space industry – with 70000 employees is far behind). It seem ironic that when Ukraine space industry is reducing employment after losing contracts with Russian companies and Russian space industry is planning reduction of  employment after losing potential competitor.  Development of different conceptions in design bureaus and research centers is far from any coherency. Angara rocket is good example of such situation. It was announced, after 15 years of development, in 2009 as future of the Russian space industry and was mentioned to replace various launch vehicles including Zenit and Rokot. But at the moment, Roscosmos is developing new medium rocket called Fenix (You can read more here) and main contractor for Fenix, RCC Progress is developing own Soyuz-5 rocket which is comparable with variants of Angara (by KBKhA Khrunichev) and Fenix specifications announced by Roscosmos. To make situation more interesting, Deputy Prime Minister Dmitry Rogozin announced today, that Russia is starting development of new super heavy rocket with possible payload capacity at 100 t with Fenix rocket as first stage (same Fenix which is not even on blueprints yet). Deputy Prime Minister also stated:

“If we are asked what the main task in civil space is, we would say that it is not the Moon or Mars, the main task is cheap space. Our competitors are on our heels. We are looking for a solution that will allow making spacecraft launches cheaper. Of course, such solutions will be found,”

It is shame that it was not clarified how Deputy Prime Minister would like to reduce costs of rocket launches for civilian purposes. Halting of manned mission to Moon was stated earlier by Deputy Director of the Space Research Institute at the Russian Academy of Sciences Oleg Korablyov on 29 December 2015:

“Roscosmos has given up most of piloted projects for the Moon. What is important is that the federal space program for 2016-2025 has retained automated programs for the exploration of the Earth’s satellite. That is why, the decision to give up most of piloted programs won’t affect the Moon exploration,”

These words are fitting in general trend which could be sum up in few words: reducing employment and cost cutting combined with lack of coherent concept of development is present face of renationalizing. Further example of strange decisions is history of Sea Launch. Company controlled by Russian state by RKK Energia (still not in URSC, but controlled by state in 38%) was launching Zenit rockets acquired from Ukraine from sea platform and due the political decisions its operating was halted, and Company was put on sale. Now Sea Launch CEO, Sergei Gugkayev, is announcing today that Sea Launch have plans for restart in 2016 with new investors while there is no Zenit rockets to launch due the Ukrainian manufacturer problems after cancelling all Russian orders. It is doubtfully that Ukraine would like to participate in further cooperation with Russian company, so whole situation is unusual. Another strange fact is that another Russian state-owned company, United Instrument Manufacturing Corporation, is announcing on November 2015 about further developing new launch system based on retired ICBM rockets which will probably replace Dnepr (R36 ICBM retired from Russian army and converted in Ukraine for launch vehicle). It is strange that Dnepr rocket which was banned due the political tensions with Ukraine will have developed new Russian successor and fully Ukrainian Zenit rockets are considered to be utilized by Sea Launch in spite of fact that Angara is already on the market. Not to mention that according official statements off RCC Energia and URCS from January 2015, Zenit could be replaced by Angara in Sea Launch launches. Again we are facing with lack of consequence – after placing Sea Launch on the verge of bankruptcy, cancelling cooperation with Ukraine with Zenit rocket, announcing about replacing Zenit with Angara, Sea Launch is returning to considering utilizing Zenit. If renationalizing was way for establishing new order in space industry in Russia it seems it is failure.