Roscosmos’ Oxana Wolf: “We Want Private Companies to Succeed”

Translated from Russian by Google Translate

Oxana Wolf, Roscosmos Deputy Director of the Department of Advanced Programs and the Sphere Project, told the Russian Space publication about the progress of the process in terms of easing the administrative requirements for the work of business, the balance between desires and real opportunities, and how space universities can help entrepreneurs.

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Q: Oksana Valerievna, have you managed to bring clarity this year with regard to the normative and legal documents governing cooperation between Roscosmos and private business?

A: Business is progressing, but not as fast as we would like. During this time we did not sit idly by, but the volume of tasks is very large!

During the year, research work was carried out on the analysis of existing documents on the standardization of defense products for subsequent processing into public documents on standardization and the formation of a list of open documentation for use by private companies in the development of space technology and its certification at all stages of the life cycle. In total, about four thousand documents were analyzed. Most of them are the GOST standards that Roscosmos and the Ministry of Defense use as customers of rocket and space technology.

Fundamental documents have a stamp, since when creating and operating space technology, one has to take into account the mandatory requirements for the list of regulatory documents, which, in addition to publicly available acts, include closed regulatory and technical documentation. The composition of these documents presupposes admission to state secrets, which significantly complicates the process of creating and operating space technology by private companies.

Based on the results of the work, it was concluded which documents should be prepared for open use. Now about 100 such documents have been proposed for development. It is also necessary to analyze whether space technology should be created according to different standards – “state” and “commercial”.

It is now obvious that private traders cannot be ignored. Of course, this was largely due to the “Musk Phenomenon”. According to one Chinese official, China as a country found itself in a state of competition with a private company. And in this part, the whole world is in a similar situation. The sooner we, as a country, realize this, the sooner we will begin to take steps to get closer to actually attracting private companies.

Q: Why is the process of adjusting the regulatory framework for today’s realities so difficult?

A: I wondered this question. I saw at what point the Americans decided to change their legislation in order to raise a whole galaxy of private owners and entrust them with tasks that were previously solved by the state. Changes in space laws began in the 1980s, and laws that got [Jeff] Bezos, [Elon] Musk and [Richard] Branson and others on their feet were passed in the mid-1990s. That is, the “era of private traders education” began more than 30 years ago!

When the “private traders” proved their ability to provide quality services, the American government agencies involved in space, on a competitive basis, gave them orders for launches.

In Russia, for the investment attractiveness of space projects in order to attract commercial companies to them, we need government guarantees for the long-term development of such projects and a guaranteed long-term order, confirmed by strategic objectives. An additional guarantee for the entry of business into the space industry can be budgetary co-financing by the state of the early stages of exploration work carried out with the aim of creating and experimental testing of technologies.

The implementation of such mechanisms requires effective steps on the part of the state in terms of systemic transformation of the regulatory legal framework on the possibility of financing high-risk projects from the federal budget, the creation of a system of tax incentives for private companies involved in the development of space technology, the formation of public-private partnerships, as well as regulation in the field use and commercialization of the results of space activities.

To expand the activities of private companies in the space sector, it is necessary to have not only a legal basis for delegating the creation of technology to private companies, but also a system of normative and technical regulation, supervision and control over its development, production and operation.

Summing up, we can say that the preparation of the regulatory framework requires changing a fairly large number of documents, which in itself takes time, but also has an impressive list of coordination with interested organizations. I think it may take several years.

Q: Yes, there are no competitors to American private giants in Russia yet, but there is still a positive experience. Take the same Gazprom Space Systems or S7 Space …

A: Gazprom Space Systems rather acts as a system integrator and satellite communications operator. Now the developer of devices for them is Thales Alenia Space together with the Information Satellite Systems (ISS) enterprise named after Academician MF Reshetnev, which collects them. At the same time, the requirements laid down in the satellites were included in the contracts, overcoming the existing barriers. But Gazprom Space Systems is a fairly large enterprise with solid work experience. And it should be noted that they do not work only in the private market. Their main customer is government agencies.

As for S7 Space, the company has its own resources and actually comes from the “neighboring” (aviation) industry. And they understands that the demands put forward by Roscosmos cannot be ignored.

You can, of course, imagine a certain company that has created a light or ultralight rocket. Let’s say the product is created, all the barriers have been overcome, and they start to launch satellites produced by the same private company and make a profit. One can only be glad for them. But the market for spacecraft launches by private companies is just developing, so a large company that has created a launch vehicle is unlikely to be content with individual launches, but wants to get the same guaranteed order for launching, including state satellites. In this case, the same quality and reliability requirements will be imposed on the launch vehicle, which must be met by products manufactured at Roscosmos enterprises.

So the question of the standards applied by private companies is by no means formal, and the simple removal of seemingly unnecessary conditions at the next step may lead to the impossibility of obtaining the required certificate of conformity. We want to create mutually beneficial cooperation, so we try to foresee all scenarios in advance.

Q: At what point can entrepreneurs expect funding?

A: If the product is not made by order of the Corporation and not in its interests, then this, rather, can happen after the stage of flight tests, when the product confirms its compliance with the declared characteristics. In modern realities, a partnership scheme is much more relevant, when a company becomes the operator of a product, owns its life cycle, and the Corporation can order a service based on this product in its own interests.

For example, the niche for launching small spacecraft is of little interest to Roscosmos from the point of view of generating profits – it is low-margin and does not bring a lot of income. At the same time, it is focus for commercial companies creating ultralight and light launch vehicles, since the production of an ultralight rocket is quite affordable for them financially.

Roscosmos and other departments have an interest in launching small spacecraft with a short preparation time for launch. If a private company creates a rocket with suitable technical characteristics and a good economy, then Roscosmos will be quite ready to place orders or even talk about creating a joint business.

By the way, Elon Musk started with the Falcon 1 light rocket. Three out of five launches carried out between 2006 and 2009 were unsuccessful. But SpaceX finalized the carrier, after which they paid attention to the company. They began to receive large orders when they made the Falcon 9 rocket on her own. And it will not be any different for us either – this is the law of the market. If you are applying for some market niche, you must first prove that you can.

Q: Roscosmos recently announced an initiative to test equipment created by private owners at the bench base of supporting industry universities. Can you tell us more?

A: We want our private companies to succeed. They are tenacious, which is good. I believe that when a developer has a goal and goes to it, looks for investors and by any means tries to achieve his plan, this is worthy of respect. We need to help this process in every possible way. And one of the most important issues for private companies is testing the equipment being created. We are really ready to involve our leading industry institutes and universities in solving this problem in order to use the existing experimental and testing infrastructure.

For example, the Progress Rocket and Space Center (RSC), together with the Samara University named after S. P. Korolev, have a joint experimental and test base for the production of spacecraft, which can also be used in the interests of third-party companies. In addition, the university has good test benches for rocket engines.

The Baltic State Technical University (BSTU) “Voenmech” named after D.F. Ustinov has open stands to conduct tests for private companies.

It is important that with the help of these sites we will be able to provide services to entrepreneurs with an acceptable price tag, since the testing base belongs to the Ministry of Education, and the tests themselves can be carried out with the involvement of scientific personnel. We thought that such an opportunity should be taken under the wing of Roscosmos and organized.

But the hardest part is not testing. It is equally important that the test methods are approved by the head research organizations of Roscosmos, and the test results are accepted by them for the formation of conclusions. This is necessary so that the company can move on to the next stage of work.

I would like to note that a mechanism is currently being worked out for using the research infrastructure of Roscosmos organizations in the interests of small innovative companies, as well as a pricing mechanism.

— Russian Space