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President of Russia Vladimir Putin: Mr Rogozin, today we are going to discuss the space industry, which we have talked about on many occasions, both the problems in the sector and its prospects. I know the Government has drafted some proposals. Please, go ahead. 

Deputy Prime Minister Dmitry Rogozin: Mr President, the commission set up on your instruction to reorganise the sector’s management system has drafted all of the needed documents in this area.

We examined the systemic project put forward by Roscosmos and came to the following conclusions: we propose keeping the Federal Space Agency (Roscosmos) as the federal executive body responsible for acting as system integrator and state purchaser for the programmes that industry will carry out. Certainly, we will need to clarify the agency’s work objectives, powers and activities, and bolster its human resources capability. 

As for the industry side of things, we propose consolidating the designers and manufacturers of the main types of rocket and space technology by bringing them under the umbrella of a single corporation – the united rocket and space corporation, which could be established as a public limited company.

We believe that this model would enable us to implement a common technical policy within the future corporation and keep the plants busy with orders. At present, the plants are using only around 40 percent of their capacity, and this is why we are seeing problems with wages and orders. Industry consolidation and mobilising industry resources, along with developing competition and design work will produce the results we need.

We have drafted all of the needed documents. If you approve them, the Government and the Military-Industrial Commission are ready to start carrying out this plan.

Vladimir Putin: But what exactly do these proposals entail, not on the bureaucratic side of things, but in terms of organising the industrial production process? We discussed several different options and finally settled on one of them. How exactly is this model going to be implemented in practice, how will it be carried out?

Dmitry Rogozin: Mr President, the model we chose is based on cross-financing of projects, both those related to defence procurement needs, and civilian space programme projects.

Vladimir Putin: What will this involve in organisational terms?

Dmitry Rogozin: To illustrate what it will entail in organisational terms, I wanted to show you a diagram. In order to speed up the process, we propose setting up the united rocket and space corporation using the Russian Institute of Space Device Engineering as the base. This is an already functioning organisation and it has the necessary resources for us to be able to transfer to it shares in the rocket and space industry’s companies. In the upper part of the diagram you see the institutes and organisations that are part of the ground-based space infrastructure and that we propose leaving under Roscosmos’ direct responsibility. In other words, everything is to be transferred except for research and infrastructure.

Vladimir Putin: Transferred where?

Dmitry Rogozin: Transferred to the rocket and space corporation. But research and infrastructure will remain under Roscosmos’ responsibility. This is the division of powers that we propose. 

Vladimir Putin: Remember, when we discussed this matter, various issues came up, including questions such as how to manage and organise such a huge sector, will it be sufficiently mobile, sufficiently manageable, and what do we need to do to make sure that this is the case.

Dmitry Rogozin: If we want to make the sector manageable, we need to eliminate duplication. At the moment, we have various companies in the sector concentrated in ten integrated organisations, and there is also a mass of organisations that operate independently outside these integrated structures.

Each of them works according to their own plan and uses their own component base. In other words, universal technical and technology solutions hardly get considered at all.

If we place the sector within a unified organisational framework, we would be able to carry out a common technical policy. That is to say, instead of having all these different companies ordering different items, we could organise one-window public procurement orders, which would centralise the system and save us a lot of money. 

Furthermore, the biggest problem is the component base. The various components make up 95 percent of any satellite. In order to avoid depending on component imports – and we both know that this is a highly competitive sector and some countries apply export controls that essentially make it impossible to import all the necessary components – the new system would enable us to concentrate resources and scientific potential on developing our own component base for space and defence needs, that is, areas where radioresistant equipment is needed. 

Vladimir Putin: You are saying that this would let us establish an organisation capable of working successfully on the market and carrying out our defence procurement orders?

Dmitry Rogozin: Mr President, a lot of what is being developed in the space sector these days are dual-purpose products. We see this in the US, European and other programmes. It’s no secret that many of our products and instruments can also be used in a wide range of areas and for various purposes. Just take the GLONASS system for example. It certainly has a huge civilian market, but at the same time, it also has major defence significance.

The model that we propose and to which you gave your support, aims precisely at achieving the goals of combining civilian and defence potential.

Vladimir Putin: Thank you.