ESA Invests 100 Million Euros in Delayed Soyuz, Vega Programs

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  Space News Business

ESA Invests 100 Million Euros in Delayed Soyuz, Vega Programs

By PETER B. de SELDING
Space News Staff Writer
posted: 23 April 2009
04:05 pm ET





PARIS — The European Space Agency (ESA) has agreed to make supplemental investments of 100 million euros ($132 million) in the Soyuz and Vega rocket programs to take account of development delays but has not yet agreed to pay higher prices to launch ESA satellites aboard either rocket, ESA Launch Director Antonio Fabrizi said.

Fabrizi
also said ESA governments have withheld payment for certain maintenance charges at facilities producing components of the heavy-lift Ariane 5 rocket pending a review of whether industry has done all it can to reduce costs.

In an April 17 interview, Fabrizi said the yearlong delay in introducing Russia’s Soyuz rocket to Europe’s Guiana Space Center spaceport has resulted in additional charges for completion of the new launch pad. Some of these additional costs have been paid by the Arianespace commercial launch consortium, which is marketing Soyuz launch services.

But ESA is contributing about 60 million euros to offset the delay-related costs.

Fabrizi
said that while it is natural that Evry, France-based Arianespace will try to recoup these additional expenses through higher Soyuz launch rates, the 18-nation ESA has not yet agreed to pay more to launch ESA spacecraft aboard Soyuz.

The French space agency, CNES, is acting as prime contractor for the development of the Soyuz launch installation. France is paying the majority of the costs of the program, whose total ESA budget was estimated at 223 million euros in 2002 economic conditions.

An additional 121 million euros of Soyuz-related financing was paid by Arianespace through a 10-year loan from the European Investment Bank. The loan will be repaid from Soyuz launch revenue.

ESA and other European governments are expected to be regular Soyuz customers for science and Earth observation satellites. Fabrizi said the amount the agency will pay per Soyuz launch has not yet been determined and likely will not be known until the Soyuz development program is completed. Soyuz is currently expected to make its first flight – with a German Defense Ministry SatcomBw military telecommunications satellite as inaugural passenger – either late this year or early in 2010.

“We are waiting to see the final Soyuz production cost and that will help us determine how much we should pay,” Fabrizi said. “We want to make sure that Arianespace does not operate at a loss in the program, but we also want to make sure we are not paying twice for the same delay-related charges. We are still working on the methodology and expect to have concluded an agreement this year.”

The Italian-led Vega rocket, designed to place smaller satellites into low Earth orbit, is also more than a year behind schedule and ESA has agreed to spend an additional 40 million euros on the program as a result, Fabrizi said. Vega is currently expected to begin operations in early 2010.

For the heavy-lift Ariane 5 rocket, ESA plans to conduct an audit in 2011 to determine whether Ariane 5 contractors have done all they could to cut their own operating costs before agreeing to finance the maintenance of certain ESA-owned Ariane 5 production facilities.

While these facilities belong to ESA, they are located at the production sites owned and operated by the different Ariane 5 contractors.

At a meeting of ESA government ministers last November, the agency agreed to spend about 100 million euros on maintenance expenses for these facilities through 2011. That period corresponds to the date of production of the first 10 of 35 Ariane 5 rockets Arianespace ordered from industry in February in a contract valued at more than 4 billion euros.

For the remaining 25 rockets, ESA governments ordered Ariane 5 contractors to find savings in their operations equivalent to ESA’s past payment of these so-called MCO costs, or Maintenance of Operating Conditions.

Fabrizi
conceded that, from an industry perspective, the game will be to make the minimum effort needed to show good faith and then plead for a return of the MCO payments. “There is no limit to creativity,” Fabrizi said. “But we are planning an audit of the cost structure, and we have a working group that has access to a lot of the data from the different operations. So we think we will have a pretty good idea” of whether a maximum effort was made.