Unlimited Opportunities for ISRO: Public-Private Partnerships in Space

Earlier this month, the Indian Space Research Organisation (ISRO) announced that it is working at preparing a business model to partner with industries – public and private – so that they have a higher level of participation in the space sector.

Various media reports have quoted ISRO chairman K.Radhakrishnan saying “We are working at a possible model for investment, sharing of technology and responsibility with the industries. The response from the industries – public and private – is positive. It will take three or four years to arrive at a proper model”. While he did not confirm if the model will be based on public-private-participation, he did mention that the industries’ participation is sought to increase the production of satellites and rockets so that ISRO can focus on other core areas.

The Indian organisation is not the only space research agency to express this sentiment. If we can go back to a Thursday evening less than 22 months ago, human space exploration took another giant leap, one that was concluded with a splash from a safe water landing of the Dragon capsule 900 kilometres off the coast of Los Angeles. The first privately built and operated spacecraft to ever deliver cargo to the International Space Station had just touched the Pacific Ocean, and Space Exploration Technologies Corporation, or SpaceX, had arrived.

Image by NASA (1984)

What is interesting is that Dragon was hardly a technological breakthrough. But it was a breakthrough nonetheless, for a private company had now matched the orbital delivery capability previously exhibited only by a handful of government-owned and operated space agencies in a small selection of nation states. And as post-analysis (2012) would later confirm, every benchmark was met by the low-Earth orbit (LEO) voyage, and NASA’s Commercial Orbital Transportation Services (COTS) program had been validated.

LEO had been the destination for NASA’s space shuttles for nearly four decades before their recent retirement. Unsafe, expensive, and messy, the space shuttle program had become an exercise in inertia for NASA, holding it back from achieving the dreamy-eyed forefronts of outer space exploration which have been explored only in certain futuristic genres of fiction so far.

Through COTS, NASA has practically outsourced LEO operations to private contractors such as SpaceX, raising hopes that it may get back on the dream voyage of the solar system and beyond.

Similarly, when Expedition 38 crewmembers Michael Hopkins of NASA and Koichi Wakata of the Japan Aerospace Exploration Agency (JAXA) de-mated the solar-powered Cygnus commercial spacecraft during its first trip to the International Space Station earlier this year, it was only the beginning of what is expected to be a space traffic jam of sorts (Kremer, 2014) on the ISS route. America’s newest commercial space freighter, built by Orbital Sciences Corporation with seed money from NASA, had also taken up where the shuttles had left off, and restored NASA’s capabilities through a public-private partnership.

Private Participation in Space: Past and Present

It’s not as if private participation has never been a part of space exploration: Boeing and Lockheed Martin have been working with NASA for decades. The difference is that those “cost-plus” arrangements, where companies are reimbursed the cost of a project plus a guaranteed profit, totally ignored competition and even provided incentive for inefficiency (Anderson, 2013).

All that has changed with the dawn of the Space Act Agreements, NASA’s vehicle for partnering with commercial players. Now, NASA pays in increments only once milestones are met, and management and design are left to private companies, thus fostering collaboration and assigning greater decision-making and responsibility. This development should be understood keeping in mind the fact that privatization is not simply a governance or management exercise, but rather a philosophical position. As put forth by E.S. Savas (2000), “Privatization is the act of reducing the role of government or increasing the role of the private institutions of society in satisfying people’s needs; it means relying more on the private sector and less on government.” Thus, while space has traditionally been the playing ground for state agencies, Space Act Agreements are the first sign of a new move towards private participation, one that has now been validated by the performance of players such as SpaceX and Orbital Science.

What PPPS Bring to the table

Increased Competition & Lower Costs

Traditional partnership practices involved dealing with heavy bureaucracy and fundamental changes in the way commercial companies operate. While a little regulation is welcome, NASA has earlier asked private partners for tracking all employees’ activities, whether engaged in the project or not (Commercial Spaceflight Federation, 2011). Since not many private players could bear to participate under these terms, relatively few players were involved with little or no meaningful competition. Since PPPs are not governed in this manner, many more companies and subcontractors are now encouraged to participate, and low-cost, innovative solutions are possible.

The results are already in from the COTS Cargo development program, which has already achieved successes at a fraction of the cost of a traditional government launch-vehicle program. In a hypothetical scenario, if NASA were to use traditional approaches, the costs may very well have become prohibitively high and led to cancellation of the development program.

Greater Flexibility

As opposed to government-led programs, PPP programs such as SAAs are designed to contain virtually anything both parties agree to include, and can thus be flexible to be easily tailored as needed. Thus, state agencies can forever be rid of the rigid, irrelevant, and counterproductive provisions and procedures that they may had to engage in when dealing with private players in the past, reducing redundancy and improving cost-efficiency and performance.

Lesser Burden on Public Investment

Parallel can be drawn between the public investment so far on state-run space agencies such as NASA and the U.S. government’s early support of the railroad and the aviation industry. Development of basic infrastructure and technology is the government’s prerogative, and as with the latter, it was the government’s aggressive investment in infrastructure that laid the foundation for private companies to succeed. The same is true for space exploration.

Now, funding from both public and private sources can be used for developing capabilities for space exploration for both commercial and government purposes. Private investment can thus enable a program to achieve the same result at a lower cost to the government. A NASA (2011) analysis concluded that SpaceX was able to build its Falcon 9 rocket for about one-third of what the agency would have spent on a similar project under its traditional model.

Greater Innovation at Private AND Public End

As opposed to complete privatization, PPPs with established state-run space agencies with a long track record and successful execution of joint projects can provide private spaceflight companies with the legitimacy and the regulatory nod needed to bring traditional investors to the table. As greater private investment flows into research and development, greater innovation can come in from the sector, while NASA grapples with shrinking science budgets and limited resources.

In the meanwhile, PPPs also free state agencies to no longer use precious managerial and financial resources on what has already been explored, and allows them to simply outsource the already explored frontiers to private companies, leaving them free to move on to bigger things. Eventually, a model could evolve where the state-run agencies are solely involved in pushing the envelope on deeper outer space research, while private companies run transport and tourism infrastructure within established boundaries

Safety with Sovereignty

As space partnerships move from a manager-contractor relationship between the state and private players to join ownership and collaboration, companies are now free to focus on the most essential aspects of a program, meeting the requirements for performance and safety at a reduced cost. NASA’s experience with SAAs shows that despite non-state collaboration, safety and performance requirements do not have to be put up for debate. Adequate insight versus oversight level and processes written into PPP agreements can ensure safety and preparedness as necessary.

Another interesting aspect of PPP models is the less reliance on other governments for expanding capacity and engaging in join programs. For example, since the end of the space shuttle program, NASA has relied on Russia to take its astronauts to space in Soyuz rockets. Given the current sanctions against Russia and the looming clouds of another cold war, this can adversely affect space programs and planning. With private participation though, NASA could’ve simply hired commercial companies for space taxi services. This is especially relevant since SpaceX says that it could provide rides to NASA astronauts at $20 million a seat, a third of the Russian price (Chang, 2012).

The Way Forward

The partnership between NASA and private companies through Space Act Agreements show a new level of understanding and cooperation between the public and private sectors, and give some hints of how commercial space travel and exploration may unfold in the future. It is not beyond a few years before Virgin Galactic and Space Adventures go for suborbital joy rides to space, for which hundreds have already signed up. As of now the list mostly comprises of the Tom Hanks and Katy Perrys of the world, but it’s only a matter of time before a mass market appears.

In the longer-term dreams, Elon Musk is vocal about how he plans to satisfy humanity’s needs to get to Mars within a decade or two. Musk, the founder of SpaceX, had also famously said that he would do this “with or without NASA”, but later acknowledged that they could not have started SpaceX, nor reached this point without their help.

Thus, the support and cooperation of the state is of foremost importance as well. And with 60 missions scheduled during the 12th plan period, India seems ready to launch already!


Cross-posted from my NewsYaps column. A modified version of the piece was published by Project Firefly on their thought leadership blog on April 17, 2014. I have previously written about ISRO in ‘Jai Vigyan?

The work references the following sources:

National Post editorial board on SpaceX: The ultimate public-private partnership. (2012, June). National Post. Retrieved April 1, 2014, from http://fullcomment.nationalpost.com/2012/06/01/national-post-editorial-board-on-spacex-the-ultimate-public-private-partnership/
Anderson, C. (2013). Rethinking public–private space travel. Space Policy, 29(4), 266–271. doi:10.1016/j.spacepol.2013.08.002
Chang, K. (2012, May 14). Contracts Help Private Sector Edge Deeper Into Space. The New York Times. Retrieved from http://www.nytimes.com/2012/05/15/science/space/contracts-help-private-sector-edge-deeper-into-space.html
Commercial Spaceflight Federation. (2011, June). CSF Issues White Paper on Use of Space Act Agreements – Commercial Spaceflight Federation. Retrieved April 1, 2014, from http://www.commercialspaceflight.org/2011/06/csf-issues-white-paper-on-use-of-space-act-agreements/
Kremer, K. (2014, February 18). Private Cygnus Cargo Carrier departs Space Station Complex. Universe Today. Retrieved April 1, 2014, from http://www.universetoday.com/108050/private-cygnus-cargo-carrier-departs-space-station-complex/
English: Astronaut Dale A. Gardner, having just completed the major portion of his second extravehicular activity (EVA) period in three days, holds up a “For Sale” sign refering to the two satellites, Palapa B-2 and Westar 6 that they retrieved from orbit after their Payload Assist Modules (PAM) failed to fire. Astronaut Joseph P. Allen IV, who also participated in the two EVAs, is reflected in Gardner’s helmet visor. A portion of each of two recovered satellites is in the lower right corner, with Westar 6 nearer Discovery’s aft. (1984). Retrieved from http://commons.wikimedia.org/wiki/File:Satellites_For_Sale_-_GPN-2000-001036.jpg
NASA, A. D. A. for P. (2011, August). Falcon 9 launch vehicle NAFCOM cost estimates. Retrieved from http://www.nasa.gov/pdf/586023main_8-3-11_NAFCOM.pdf
Savas, E. S. (2000). Privatization and public-private partnerships. Chatham House Pub.

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