Questions are raised about activities in the RAA

Published: 4/25/2000

The Russian Aerospace Agency (RAA) space activities have recently come under scrutiny in the Russian media in the form of Berezovsky controlled Moscow daily newspaper Kommersant, over its activities and associations with the commercial sector. Since its creation, the RAA"s commercial programmes through space launches have brought in revenues of more than $3.5bn and look likely to bring considerable more revenue over the next few years. This probably explains in part why the government have been less than enthusiastic, according to Kommersant, in carrying out any detailed checks on its management and operation.In fact the agency"s powers over the period have expanded considerably removing responsibility for the aerospace industry from the Ministry of Economics last year. However, it appears that the Ministry may be getting its revenge with an unidentified source at the Ministry claiming that it is now planning to increase its scrutiny under direction from the new administration. The specific questions have been raised relate to the agency"s connections with various commercial companies and the fact that it is reported to not employ a tendering process for related businesses, but simply appoints them. Some of these organisations are also reported to have links of some sort with RAA. Under the terms of its establishment, the RAA cannot own or partially own any commercial company. Companies that appear to have links with the RAA include the medical distributor Medikon, which is involved in the wholesale market for medicines and medical equipment. One of the founders of Medikon, which rents office space in RAA"s building, is Dr Nikolay Koptev, son of Yury Koptev, the director of the RAA. Medikon has also been linked with the legal firm JSC Soyuzyurinform, appointed by RAA for the ‘legal support of commercial space activity" despite the fact that RAA already has its own legal department. It is also recommended by RAA to other companies in the space sector. Because RAA has not issued any tenders in the aerospace insurance market, CJSC Insurance Company Megaruss now seems to have a monopoly position in a lucrative sector courtesy of the RAA. Despite the fact that it is not allowed to be a founder of any commercial enterprise, RAA has established JSC Puskovie Uslugi (Launching Services), which is involved in launching satellites. Despite the fact that the Russian aerospace industries have been in decline over the past ten years, with substantial reductions in military vehicles and civil launches, according to Kommersant, RAA personnel have increased by a staggering 3,900% since 1992. A government source said that the current situation in the RAA has been causing alarm for some time but there has been no opportunity to take any action to change it. It is now possible that an individual unrelated to the present management may be appointed by Putin"s government to head the RAA. While accepting the fact that there may be unacceptable activities at the RAA, where in Russia at present is there not? The important role of the agency as the consolidator of the industry was very evident at a meeting recently between senior RAA managers and industry representatives with US investors, where the clear impression was given that the agency was unhappy at the failure of the industry to address problems, particularly the proliferation of prospective or actual programmes and are seeking to force reality on the various industry participants through the use of the limited federal funding available. The basis of this particular attack therefore appears to be primarily political, as Koptev has proved an able agent of change in the space industry although he has made few friends from his activities. The emergence of these types of stories and allegations may even suggest that he is getting close to the bone for many of the entrenched interests. Koptev"s replacement at this point would not necessarily improve the situation. In fact, given Putin"s aggressive courting of the military industrial complex, the danger may be that a potential replacement would come from among their ranks and would seek to continue the wait and see attitude that pervades the senior ranks of much of the industry and is at the heart of much of what ails the industry.

Article ID: 1571