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Space Spending on the Rise, Britain Puts out Welcome Mat

David Parker, CEO of the UK Space Agency said he is talking to companies with little or no British presence to encourage them to create or expand their operations in Britain. Credit: SpaceNews photo by Melissa Golden

BRUSSELS — The new chief executive of the UK Space Agency said Jan. 30 that Britain’s small and midsize companies are expected to raise their game in the coming years to take advantage of the nation’s increased government space funding and to prevent prime contractor Astrium from becoming a de facto monopoly.

David Parker, whose professional experience includes a stint with Astrium and previous experience with Britain’s government space agency, said he also is talking to companies with little or no British presence to encourage them to create or expand their operations in Britain to compete for the new funding.

“The message we are sending is that Britain is open for space business,” Parker said here in an interview during the 5th Conference on EU Space Policy. “We have a whole crop of mid-sized companies that can bid for more work and we want these companies to grow. They have to seize the opportunities. What we are not interested in, however, is companies coming in just to buy geo return.”

Geographic return is the way the 20-nation European Space Agency (ESA) encourages its member governments to finance ESA programs. Nations are guaranteed that 90 percent of what they invest in ESA will return to their territories in the form of contracts to their national industry.

The British government in November announced that it would raise its annual ESA contribution by 25 percent, starting in 2013, for five years — a commitment of 1.2 billion British pounds ($1.9 billion).

At ESA’s recent conference of governments to determine a multiyear strategy and budget, Britain focused its investment on ESA’s telecommunications programs, while also taking a 13 percent share of ESA’s role in Europe’s second-generation polar-orbiting meteorological satellite system.

In a symbolic gesture, Britain has taken a small share of ESA’s work with NASA on the Orion Multi-Purpose Crew Vehicle, but has otherwise steered clear of manned space programs such as the international space station. It also has avoided spending money on ESA’s Ariane and Vega launch vehicles.

Other nations have grumbled that Britain is guilty of “cherry-picking” in its ESA membership.

Parker openly conceded his nation’s preference for programs that have some near- or mid-term hope of a commercial benefit — “mainly telecommunications and Earth observation,” he said. It was that promise, coming out of several British government studies of the impact of space technology on national economic growth, which led to the surprise announcement of the 25 percent increase in ESA spending.

“What industry now has to do is prove its case,” Parker said. “It has to demonstrate that it can deliver on the economic benefits.”

In principle, the increased budget should make Britain a magnet for companies seeking to match their business presence to the likely contract volume from ESA. Satellite on-board electronics manufacturer Com Dev of Canada has already said it will be strengthening its British presence with a view to competing for the increased work load.

Officials from Thales Alenia Space of France and Italy, one of three satellite system prime contractors in Europe, have said they will be adjusting their strategy to account for the new British posture, and they have warned the governments of France and Italy that they risk losing expertise if they do not keep up with Britain.

Marco R. Fuchs, chief executive of OHB AG of Bremen, Germany, another one of the three European system prime contractors, said in an interview here Jan. 29 that OHB will consider a British presence but that the company does not intend to grow much beyond its current status.

That leaves Astrium, which already has a large presence in Britain in satellite telecommunications, Earth observation and science, and is in a position to be the biggest winner in the government’s new direction.

Astrium Chief Executive Francois Auque said in a press briefing Jan. 28 that his company has a dominant position in Britain and as such will naturally benefit from fresh government spending.

Parker said Astrium currently receives about 50 percent of Britain’s ESA contracts. This figure does not include much ESA work for Surrey Satellite Technology Ltd., a small-satellite specialist that, up to now, has not been heavily involved in ESA work.

Astrium’s Stevenage facility builds the platforms for Astrium’s Eurostar line of telecommunications satellites. Thales Alenia Space’s Spacebus satellite platform and Astrium’s Eurostar are both being upgraded through an ESA program called NeoSat, which ESA governments approved in November.

Britain is second only to France, home to Thales Alenia Space and Astrium facilities, in its investment in Neosat. Parker said the program should provide a clear benefit by making Astrium more competitive on the global market, and resulting in more platform orders for Stevenage.

But other companies in Britain — SciSys, Qinetiq, Vega among them — will now have an incentive to redouble their efforts. Parker said he has little concern that Astrium will run the table on Britain’s ESA contracts given the health of these second-tier companies and the prospect that others might join them in the new government space-friendly environment.

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