Roscosmos ready for change; business model restructuring to take 3-5 yrs - Belousov

MOSCOW. Dec 12 (Interfax) - Restructuring the business model of Russian state space corporation Roscosmos, which has set itself the goal of substantially increasing revenue by commercializing operations, will take three to five years, presidential aide Andrei Belousov said.

"I think that taking Rosatom's example [a ministry that was transformed into a state corporation] and existing undertakings, approximately from three to five years ," Belousov told journalists on Tuesday.

Roscosmos currently turns a profit and it will make much more, Belousov said, adding that Roscosmos has set a very high bar for earnings.

"But this is all implementation of existing undertakings and existing opportunities. In order to look ahead, serious restructuring is needed," Belousov said.

This includes restructuring the product line that Roscosmos currently offers and organizing new forms of cooperation. "Therefore, this all takes time," he said.

"Yes, Roscosmos is ready [for changes], of course. What took place today [the Space as Business conference] is no accident. Roscosmos itself initiated this, today's conversation. It is the first such that has taken place, so you are witnesses to history," Belousov said.

In summing up the results of the conference's plenary session, Belousov pointed out the steps that must be taken "literally today-tomorrow," in order to implement those plans that Roscosmos has identified for commercialization activity. "The plans are somewhere between super-ambitious and adventurous, I would characterize them by revenue growth dynamics. But as realistic," he said.

The first thing that must be done is resolve the problem of quality. "We have talked about this for years, while the quality problems remain unresolved," he said.

"The second is we need to reduce labor hours; under the existing number of labor hours, we simply do not now have a competitive lineup. We are even being squeezed out of the launch market. Because of marginal labor costs, which in the final analysis determine the cost of a launch, we will surrender our positions," Belousov said.

In addition, the decision-making process and the process of putting them into practice must be accelerated. As an example of this, Belousov pointed to the corporatization of the Khrunichev Space Center, which was approved three years ago, but has yet to be implemented. "These speeds will not only keep us from flying in space, they will keep us from getting off the ground," he said.

There is also a need to discuss starting points. "In the coming decade we have everything more or less prescribed. To a large extent the waypoints for the coming 10 years of Roscosmos' development is the launch of Angara, probably with a hydrogen engine, in the final analysis. Secondly, this is the relaunch of the crewed program, creation and launch of next-generation crewed spacecraft. Launch first in automatic mode and then in crewed mode. Thirdly, this is the 'super heavy,'" he said.

A realistic starting point is 2030. "A look must be taken: by 2030 where we will be and where the Americans and the French, our main competitors, will be. What we will be able to lay out as an undertaking by 2030, how we are able to capitalize on these undertakings," Belousov said.

The main thing is to rethink Roscosmos' mission, its business model and strategy, he said.

"Work for the state, on state orders will definitely remain, but a second wing is making a lot of money, maximally so. With our colleagues, with China, with India, with Japan, with South Korea, somewhere with the Europeans. With what we approach, with which products, with which tools. What we will do, we or the Chinese, what the components are. But this all derives from what we want," Belousov said.

If the task of serving the Defense Ministry is set, that is one story. If there is the desire to make a global corporation possessing the technological, personnel and financial abilities needed to successfully grow, that is a different story, he said.

"All the same, I propose creating a working group, first and foremost with the participation of business, advanced business, mapping out these issues," Belousov said.