MDA owns and operates Radarsat-2, which provides imagery and data to government and commercial customers around the world. Radarsat-2, launched in 2007, continues to operate well beyond its seven-year design life. Credit: MDA

PARIS — Canada’s MacDonald, Dettwiler & Associates (MDA), which is facing a revenue loss of $20 million a year with the retirement of the U.S. space shuttle, nonetheless views NASA’s proposed new direction as “a dream made in heaven” and is urging the Canadian government to take advantage of it before other nations do.

Richmond, B.C.-based MDA, which is enlarging its space profile to include major contracts for satellites in Russia and Ukraine, is also preparing for a big increase in contracts managing unmanned aerial vehicles — even if some of this work might undermine its Earth observation satellite business.

MDA used to have a near-monopoly in the commercial radar satellite business and the U.S. National Geospatial-Intelligence Agency (NGA) has become the biggest customer for data from the company’s Radarsat-2 satellite.

But with German and Italian radar satellites now in service, MDA faces a more competitive environment. MDA is one of three companies that won five-year, indefinite-delivery, indefinite-quantity contracts with the NGA valued at up to $85 million each in December, but has not seen many orders under the contract, MDA Chief Executive Daniel E. Friedmann said.

In a March 18 conference call with investors, Friedmann said Radarsat-2 sales to the NGA “have stalled” as the U.S. agency transitions to a new contract vehicle. “It has been quite slow for the money to flow out of the new contracts,” Friedmann said, explaining the slow Radarsat-2 sales volume in late 2009 and early 2010.

Friedmann said MDA’s new business of providing governments end-to-end services to manage unmanned aerial vehicles for military and environmental surveillance ultimately may eat into the company’s satellite imagery business.

MDA is managing the use by the Canadian and Australian governments of Heron unmanned aircraft conducting intelligence, surveillance and reconnaissance operations for these two nations’ forces in Afghanistan. Heron, built by Israel Aerospace Industries, is a medium-altitude, long-endurance craft that can remain in the air for 24 hours at an altitude of about 10,000 meters.

Friedmann said projects using unmanned aircraft to interdict drug traffic and to monitor Arctic or African environments, in addition to military applications, have large near-term growth potential. He said MDA is already negotiating with three other nations with troops in Afghanistan to provide Heron-based services.

“That might be a little at the expense of the satellite business,” Friedmann said. “Overall, our surveillance business is doing fantastic. But which part [the business] comes into, and how it gets there, is debatable.”

MDA’s work with the U.S. space shuttle’s Canadarm robotic arm generates about 20 million Canadian dollars ($20 million) in annual revenue that will disappear with the shuttle’s retirement, now scheduled for the end of this year.

But U.S. President Barack Obama’s proposed course change for NASA, emphasizing robotics-related technologies, should play to MDA’s strengths.

NASA’s new direction “is a dream made in heaven for us,” Friedmann said. “It includes billions and billions of dollars in the sweet spot that Canada has developed. However, that money, and that work, is inaccessible to us without the participation of the Canadian Space Agency and the Canadian government. The president has called for international cooperation, and that’s what he means.

“Our future [in robotics and exploration] rests on the amount of participation of the Canadian government in the major international programs. Germans, Italians, Israelis — many have already declared their intent and are interested in our areas. Canada has done all the right things. But we’re not aware of any long-term commitments.”

MDA in late 2009 won a $46 million contract from the Canadian Space Agency for early development work on next-generation space exploration gear including robotics and in-orbit spacecraft servicing. The idea is to develop prototypes for in-orbit satellite servicing. The work includes designs for a universal docking interface to allow vehicles to share power and data resources and to locate and capture containers for return to Earth.

As part of its move to take a bigger role in satellite manufacturing, MDA won contracts in 2009 to build payloads for the Express AM-5 and AM-6 telecommunications satellites to be operated by the Russian Satellite Communications Co. The contract, with the Russian Radio Research and Development Institute (NIIR), is valued at $200 million and work has recently started.

MDA earlier this year won a separate contract with NIIR, valued at about $60 million, to provide components for a Russian meteorological satellite to be operated by Russia’s Roshydromet.

In a breakthrough order valued at $254 million, MDA is prime contractor for a telecommunications satellite for the National Space Agency of Ukraine. But this contract, which features backing by Export Development Canada, Canada’s export-credit agency, is awaiting the completion of financial details before entering into force, Friedmann said.

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