FARNBOROUGH, England — Italy’s CGS satellite manufacturer has won a follow-on contract to design an Italian-built high-resolution optical Earth observation satellite that the Italian government would operate for military and civil applications in tandem with its Cosmo SkyMed radar satellite constellation.

Milan-based CGS, or Compagnia Generale per lo Spazio, will perform an 18-month Phase B design of Italy’s OpSis system under a contract with the Italian Space Agency, ASI, valued at 13.5 million euros ($17 million). The contract was signed July 6.

CGS, formerly named Carlo Gavazzi Space, is owned by OHB AG of Bremen, Germany.

CGS Managing Director Lanfranco Zucconi said OpSis’ development is being financed solely by civil Italian government agencies and currently has no backing from the Italian Defense Ministry.

As such, he said, OpSis’ future is unrelated to the Italian Defense Ministry’s decision to purchase an Israeli high-resolution optical satellite as part of an offset arrangement that includes the Israeli Air Force’s purchase of trainer jet aircraft from Italy’s Alenia Aermacchi.

An Aermacchi official said July 11 that the company expects the jet trainer contract to be signed in the near future. He said the offsets are part of separate negotiations between Italian and Israeli defense authorities.

Italian officials have referred to the Israeli satellite, a 300-kilogram spacecraft capable of detecting objects of about 50 centimeters in diameter, as OpSat.

Zucconi said OpSat should be viewed as a gap-filler for the OpSis system, which also is designed to have a 50-centimeter ground resolution. In a July 12 statement, OHB said OpSis “will operate together with existing systems currently used by ASI and the Italian Department of Defense.”

Italian industry officials have said OpSis is in part a consequence of Italian frustration with an 11-year-old agreement with France in which French defense forces provide Italy with optical images in return for Italian radar imagery.

In a July 10 interview, Zucconi said Italy learned from the NATO campaign in Libya that it needed more optical imagery in addition to its Cosmo-SkyMed radar constellation.

OpSis is estimated to cost around 150 million euros. If ASI proceeds with full development, the 800-kilogram satellite could be launched in 2016 aboard a European Vega rocket.

Zucconi said current plans are to purchase a focal plane for the satellite from Germany. Like Italy, Germany operates a constellation of military radar satellites, called SAR-Lupe. The German intelligence service has floated the idea of Germany building its own high-resolution satellite, but that project, called Hi-ROS, appears to have been shelved in the face of protests from France.

Italian Space Agency President Enrico Saggese said in a July 11 interview that OpSis should not be viewed as an indictment of the French-Italian data exchange agreement. He said French industry was permitted to bid on the OpSis contract and had proposed a satellite similar to the two Pleiades dual-use satellites that the French government has ordered. The first Pleiades is in orbit and returns images with a 70-centimeter resolution.

The French bid, Saggese said, was bested by the CGS proposal “based on cost and technical results.”

Saggese said Italian authorities have come to appreciate the value of optical images used with radar data and would like a satellite in the same orbit as Cosmo-SkyMed to be able to perform exact overlays of optical scenes over radar.

ASI, with Italian Ministry of Defense funding, is preparing to contract a second-generation Cosmo-SkyMed system. But to lower the required capital investment and to keep up with advances in radar technology, he said, the second-generation system will consist of just two satellites.

Saggese said the budget for the two second-generation Cosmo-SkyMed spacecraft is between 500 million and 600 million euros, including their launch. Expected to weigh 2,200 kilograms each, they are too large to be lifted aboard the Vega rocket.

Saggese said the purchase of a German focal plane for OpSis would be done on a commercial basis and not as part of a collaborative effort between the French and German governments. Ultimately, he said, OpSis could include a partnership with Germany.

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