Updated 12:08 p.m. EDT

PARIS — The European Space Agency on Aug. 12 signed contracts with industry and with the French space agency to produce an upgraded Vega small-satellite launcher for a launch in 2018 and the all-new Ariane 6 heavy-lift vehicle to debut in 2020.

The contracts – which ESA said contain “ceiling commitments” on costs, with firm fixed-price versions to follow in 2016 – include substantial financial commitments by the industrial partners, which in return are given freedom to conduct their affairs as they see fit.

Italy’s ELV SpA, a joint venture of Avio (70 percent) and the Italian Space Agency (30 percent) that is Vega’s current prime contractor, will lead development of the upgraded Vega-C rocket in a contract valued at 395 million euros ($438 million). The figure includes the cost of an inaugural flight in 2018.

Vega, which has an unblemished record in its first five flights, is currently capable of carrying a 1,500-kilogram payload to a 700-kilometer polar low Earth orbit, mainly for Earth observation, science and technology-demonstration missions.

Vega-C has a minimum performance of 1,800 kilograms to the same orbit — for the same production cost as today’s Vega. But ELV Chief Executive Pierluigi Pirrelli said his company believes it can stretch that to more than 2,000 kilograms.

Ariane 6 and Vega C artist's concepts. Credit: ESA
Ariane 6 and Vega C artist’s concepts. Credit: ESA
Ariane 6 and Vega C artist’s concepts. Credit: ESA

“What we are targeting is a 50 percent increase from the current Vega,” Pirrelli said in an interview after the contract signing at ESA headquarters here.

Key to the upgraded Vega is the P-120 solid-fueled first stage. This stage will also serve as the strap-on booster for the Ariane 6 – two per rocket for the Ariane 62 model intended mainly for government missions, and four per launch for the Ariane 64 variant, to be used mainly for commercial launches.

Pirrelli said ELV and Avio have committed to a production facility capable of manufacturing four Vegas per year. Included is a manufacturing cadence of 35 P-120 stages per year, with 31 of them to be used for Ariane 6 launches.

Gaele Winters, ESA’s director of launchers, said P-120 development costs of around 400 million euros are being divided between the Ariane 6 contract and the Vega-C contract, with Ariane 6 taking some 52 percent of the charges and Vega-C the rest.

In an interview, Winters said ESA assumes that, sometime around 2023, a second P-120 production line will be opened, this one in Germany and managed by MT Aerospace, which is majority-owned by OHB SE of Bremen, Germany.

MT Aerospace has said it believes that it can reduce P-120 production costs by more than 25 percent through the introduction of carbon-fiber booster casings. If that proves to be the case, the technology will be implemented at both the German and Italian production lines, Winters said.

If the carbon-fiber technology does not deliver on its promise, a second production line in Germany will nonetheless be opened in such a way that ESA member states participating in the Vega and Ariane 6 programs do not have to pay supplemental charges.

ESA governments have agreed to begin a small research and development program whose goal is to replace the current Ukrainian-built Vega upper stage engine with a European engine, likely to be built by an Airbus Safran Launchers facility in Germany. Bringing Germany more fully into the Vega program has been a goal of ESA.

The Ariane 6 development contract with Airbus Safran Launchers is valued at 2.4 billion euros, including a first flight in 2020. In addition to this, Airbus Safran Launchers and its two principal subcontractors, MT Aerospace of Germany and Avio of Italy, have agreed to invest a combined 400 million euros into the project.

“The fact that the industrial team was willing to invest this sum is a demonstration of our commitment to the project and our belief in it,” ASL Chief Executive Alain Charmeau said in an interview.

The Ariane 6 development is being managed in two steps. The first starts now and will run until a mid-2016 Program Implementation Review, which will decide issues such as who pays what charges associated with use of the Ariane 6 at the Guiana Space Center. ESA governments requested the review in December 2014 when they approved the Ariane 6 program.

Charmeau said ASL considers the current work package, valued at 680 million euros, as a firm fixed-price contract to be followed by the remaining funds after the mid-2016 review. Horizontal integration of Ariane 6, which dispenses with the need for the tall integration building now at the French Guiana spaceport, will also require new construction at Ariane 6 production sites in Bremen, Germany, and Les Mureaux, France.

Winters said that while it was ESA’s ministerial conference that requested the review, there is no need to wait for the late-2016 ministerial conference to conclude it.

The third contract signed Aug. 12 is between ESA and the French space agency, CNES, for development of the Ariane 6 launch pad and integration facilities at Europe’s Guiana Space Center on the northeast coast of South America. It is valued at 600 million euros and covers the cost of a new launch base dedicated to Ariane 6.

In a statement, CNES said the launch installation construction is working against a tight deadline given the rainy seasons at the spaceport, but that the facility should be ready for a formal handover to ESA by late 2019.

In keeping with ESA’s geographic return rule – which promises member states that their industry will receive contracts in proportion to their governments’ investment – CNES said French industry will receive 52 percent of the value fo the contract, with Germany at 23 percent, with the remaining 25 percent going to Italy and other Ariane 6 participating nations.

Winters said ESA and CNES agreed that, unlike the current Ariane 5 and previous Ariane versions, Ariane 6 will be integrated horizontally. This means smaller buildings at the French Guiana spaceport. Winters said the increase in capital investment needed for horizontal integration is more than compensated by the lower recurring cost – a key metric in the entire Ariane 6 program.

Peter B. de Selding was the Paris bureau chief for SpaceNews.