Home » News » Features
Dec 07, 2012, 08.05 PM | Source: Forbes India

How ISRO can join hands with private enterprise

With demand for launches doubling, the space agency wants industry to step up. What will it take for the two sides to pull this off?

How ISRO can join hands with private enterprise
Seema Singh/ Forbes India

With demand for launches doubling, the space agency wants industry to step up. What will it take for the two sides to pull this off?

A rocket blasting into space doesn’t make news today, such routine are satellite launches and so mature is technology. But, in May, a rocket launch by Californian company SpaceX made news. In fact, it made history as it became the first commercial vehicle to visit the International Space Station (ISS). The launch also signalled an era of private enterprise entering space - US space agency Nasa’s biggest bet in recent times of entrusting small, private companies with big, public responsibilities.

At Antariksh Bhavan, Indian Space Research Organisation’s (Isro) headquarters in Bangalore, Chairman K Radhakrishnan is shuffling his cards for a somewhat similar bet: Of entrusting Indian companies with the task of building rockets and satellites. Isro has a nearly 30-year-old partnership with the Indian industry. Its enduring tango with 400-odd companies has often been cited as a model for the defence sector to emulate.

But what Radhakrishnan is now proposing is of a much higher order: It requires the industry to put its skin in the game. He wants the industry to form a consortium and build a Polar Satellite Launch Vehicle (PSLV) - Isro’s workhorse with 21 consecutive launches - by 2017.

The project may sound over-ambitious, but, in reality, Isro’s time is running out. The 12th Five-Year Plan has sanctioned at least 58 missions in the next five years, as against 29 in the previous five. This boils down to almost one launch a month. The outlay has also doubled from Rs 20,000 crore to Rs 39,750 crore. As Isro can’t double its internal resources, its flight path terminates at the industry.

Globally, this is how most space agencies have built their programmes as well as their local space industry. The US has a tradition of major firms competing for business, with Nasa acting as a managing and contracting organisation. Russia is also catching on, though they have some competing state-run firms too. China is an enigma for most, but experts believe it is taking the Russia route.

On its part, Isro has closely worked with the private sector before; nearly 60 percent of its budget goes to the industry. The catch is that it has never delegated a fully functional system, say, an engine, to a company. To expect a functional launch vehicle or a satellite from the industry now, Isro will not only have to change its business and organisational model but even its contractual rulebook. That may turn out to be no less challenging than the deep space exploration it has taken up recently. Radhakrishnan says it is possible within the existing government framework. “Five years is a good period in which we can see a launch coming out of the new arrangement; I see a lot of enthusiasm [in the industry].”

For the industry, the opportunity is unprecedented: Rs 20,000 crore, i.e. nearly half of the Plan outlay in the domestic market, and the chance to enter the global supply chain of a market that is worth USD 290 billion today.

It was in the mid ’70s that Isro first began to engage with the industry for supplying components. It increased its ambit in the ’80s when its programmes began to mature. In 1983, Hindustan Aeronautical Limited (HAL) signed an MoU with Isro under which the former dedicated a 54-acre facility for building parts of launch vehicles. That was also the time when Godrej & Boyce kicked off its association with Isro by supplying satellite parts. Over time, they started making liquid engines. One of Isro’s oldest partners is Larsen & Toubro which, in the last 35 years, has worked on all versions of launch vehicles.

Today, the industry does nearly 80 percent of the value addition to PSLV. But Isro maintains a tight control on quality and final integration. It supplies everything from design to materials - even the nuts, bolts and washers. If the industry has to step up, Isro will have to let go of many of its intermediary functions. Companies like L&T and HAL say they are prepared to procure materials, which are often subject to international controls.

1 2 3


video of the day

Dont see mkt going anywhere now; like Bharat Forge: Dipen

Explore Moneycontrol

Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.