Nikolay Sevastiyanov, President, RSC Energia
“The mission to Mars is to
President of RSC Energia Nikolay Sevastiyanov is confident
that space will soon become attractive to investments.
Ambitious space projects such as a mission to Mars often
provoke criticisms from skeptics – is it really worth spending
billions of dollars? Nikolay Sevastiyanov, who took the
helm of Russian space corporation Energia this spring is
confident that it won’t be long before missions to space
become profitable. In the interview he gave to Vedomosti Sevastiyanov
talked about when a Russian cosmonaut may step on the Moon,
about the project to develop the new manned spacecraft Clipper,
as well as about relations with corporation’s stockholders.
— Energia’s stockholders, first of all the state,
might get a better idea of the price of their stock,
if it were listed on the stock market. Do you have any
plans to get the stock listed on the stock market?
— In principle, there are such plans, but first we must
make the company attractive to the investors. I think
that we can enter the stock market within five years.
— In your opinin, would it be worthwhile for the
state to increase its ownership in Energia from the current
38% up to the majority ownership, or, perhaps, even up
to 100% ownership?
— I believe that the state may get a controlling interest
in the company, since Energia is of a strategic importance
to the state as the prime enterprise in the Russian space
industry. This would also be helpful to us, since it
would provide additional guarantees of the company’s
stability to other investors and stockholders.
— The second largest holder of Energia’s stock
is Investment Company Razvitie, which owns more than 17.25%.
What is this company?
— This company is Energia’s 100%-owned subsidiary. When,
in the late 1990s, agents of foreign companies started
to aggressively buy up Energia’s shares from its employees, Razvitie bought
back some of that stock. This stock is now, in fact,
owned by Energia, albeit through its subsidiary.
— Does Razvitie have any plans to further increase
its share in Energia?
— For the moment, we do not see any need to invest money
in our own stock. What we need to invest in now are new
technologies. Our stock together with the state-owned
share add up to more than the control packet of shares,
which permits to control the company in the interests
of the state.
— In that case, wouldn’t it make sense for the
state to buy out Energia’s own share?
— This might be one of the options for increasing the
state’s share. Another option would be to issue additional
stock. This is a method for attracting additional capital.
But we realize that the state, just as any other investor,
will only be willing to buy our stock after we have shown
into what projects we are going to invest the money.
First of all, we must develop new technologies, which
will allow us to enter the space market with new products
that satisfy customers’ demands, and thus return the
money to the investors.
— And who owns the rest of the stock?
— Private investors, the largest of them is Kaskol,
a company operating in aviation market. At stockholders’
meetings Kaskol consolidates a packet of several minority
stockholders and, consequently, Kaskol representatives
have been on Energia’s board of directors for several
years now. It is nice to see commercial companies like
this one taking active interest in space industry.
— Do you have any joint projects with Kaskol?
— Not yet, but we maintain good relations with them.
Generally speaking, we try to maintain good and trusting
relations with all of our stockholders. After all, in
order to be successful in the market, we have to think
about attracting investments in the development of new
— They say in Roskosmos that Energia is in a difficult
financial situation. How can this situation be remedied?
— In order to achieve Energia’s economic recovery, one
must adhere to three principles. Firstly, it is not sufficient
to consider new projects from the standpoint of their
engineering feasibility, one should also look into whether
this project will be interesting and profitable for the
user. After all, the amount of received orders depends
on it. Secondly, in spite of the fact that since 1994
Energia has been a stock company, and therefore a commercial
company, until recently it was managed using the old
methods based on redistribution of money from centralized
funds and spending regardless of economic efficiency.
We are now introducing a project-oriented management
principle: each project will have its own budget, and
each project will have to strive for economic efficiency.
Thirdly, we must realize that the world is moving forward
and one cannot live forever off the old technologies
developed back in 1970s and 1980s. The only new technology
that Energia has now is Yamal communications
satellite system. Manned projects are being implemented
using technologies developed 20 or 30 years ago.
— For the first six month of this year the company
suffered net losses of 449 million rubles, while for
the first nine months it reported the net profit of 36
million rubles. How did you manage to achieve this?
— We started supervising budget performance and
speeded up the implementation of the work for the customers.
We are continuously monitoring the economic efficiency
of the projects.
— Are there any plans to start paying out dividends?
— First we’ve got to achieve the smaller task of getting
the company out of the red in 2005. But I believe that
in the next year we shall propose paying out dividends,
albeit small ones. The most important thing here is to
set a trend, because I believe that a stock company must
pay out dividends. Generally speaking, we are setting
a goal of doubling the company’s profitability within
five years and starting to pay out dividends,, as well
as which would amount to at least 15% of the face value
of the shares.
— What is the proportion of government contracts vs.
commercial contracts in Energia’s business?
— About fifty-fifty. The government contracts are mostly
related to ISS, where we are responsible for construction
and operation of the Russian segment, for delivery of
crew and cargoes to ISS, as well as for providing support
for conducting experiments in space. On the commercial
side, we develop Yamal communications satellites
and Earth remote sensing satellites and provide launch
services. Also, we participate as a contractor in the
development of the European logistics spacecraft ATV,
and we are gradually entering the commercial manned spacecraft
— Why have space tourists turned out to be so few in
— Experts estimate that at present there are several
hundreds wealthy persons in the world, who could potentially
become space tourists. Why don’t they fly into space?
They are either turned down by physicians, or they don’t
want to go themselves because of long flight training
schedules. Today it takes from year to a year and a half.
And normally a person cannot afford to drop out of his
or her business life for such a long time. This raises
a question of developing a new transportation vehicle,
which could lower the cost of manned space flight and
reduce the g-loads for the crew. This would immediately
increase the commercial space flight market to several
— Apparently, you are talking about Clipper spacecraft?
— In developing Clipper, we create a new concept
for manned space vehicle. Although Soyuz is
economically more efficient than Space Shuttle, its manufacturing
costs recur with each new mission. But in the case of Clipper the
descent vehicle is to be reusable and to have glider-like
properties. Propulsion and utility modules are to be
non-returnable, but reusable, that is, they are to permanently
stay within the space station. Clipper will
be launched on an upgraded Soyuz launch vehicle
and will land as a glider on a runway, which had been
originally constructed for Buran.
— The crew of how many people it will carry?
— The Clipper will allow delivering to space
and returning from space 500 kg to 1.5 tons of cargoes.
It can carry a crew of six: two professional cosmonauts
and four non-professionals. We plan to launch the first
regular mission in 2012 and to start using it as the
main transportation system since 2015. We want to make Clipper a
self-subsidizing project, just as Yamal communications
satellites are. This project will allow Russia to keep
the commercial space flight market.
— What are the most promising areas of space business?
— First of all, it is manned space flight. Not only does
it stimulate technological development in our country,
but it will also soon start bringing economic returns.
Development of satellite communications allows solving
the “last mile” problem, which costs a huge amount of
money. In the late 1990s, things almost came to stopping
the domestic production of communications satellites.
But in the early 2000s we made a leap forward, and two
major programs, Yamal and Express satellites,
are now being implemented. A very important area is
the development of Earth remote sensing satellites. Unfortunately,
Russia hasn’t got any such satellites left. At present,
Energia builds a BelKA satellite within the
framework of a joint project between Russia and Belarus.
There isn’t yet enough awareness in Russia of the importance
of such satellites for her in view of her large size.
In our estimate, in five years the profitability of this
segment is going to overtake that of the communications
— And what are the benefits of the manned space flight?
— There must be maintained a permanent human presence
in space, and that’s the principal purpose behind construction
of ISS. The space station will address a number of tasks.
Firstly, it will be an international spaceport. Secondly,
ISS allows conducting basic research in space. Even today,
space helps us to answer many questions ranging from
weather forecasts to power issues. Thirdly, on board
ISS we can try out many new technologies, which are either
too expensive or outright impossible to experiment with
on Earth. Besides, using ISS, it is possible to develop
long-term manned space missions, the mission to Mars
being one example. ISS can become an industrial facility
for constructing an orbital transfer system for lunar
— So, when is Russia going to fly a mission to the Moon?
— We could make a landing as early as 2012-2014 using
the Soyuz-type technology. Had this country
adopted a program with a budget within $2 billion, we
could land on the Moon in three missions. The first would
be just a lunar fly-around mission, the second would
involve a circumlunar orbit injection with automatic
landing of the lunar module, and the third would be the
manned landing on the Moon. Today, the lunar mission
could only be funded by the state, but no such task has
been currently set. As for the industrial transportation
system to support regular missions to the Moon and lunar
mining operations, we could develop it by as early as
— When shall we be able to say that the real industrialization
of the Moon and Mars has begun?
— We must do this within the lifetime of our generation,
first of all because of the limited nature of energy
resources. One way or the other, but we will have to
go beyond our planet in the search of new environmentally
friendly power sources. A good candidate is isotope helium-3
to be used for nuclear power. It is available on the
Moon. The earth’s reserves of helium-3 are so negligible
that their industrial use is absolutely out of the question.
According to some estimates, our natural satellite contains
no less than 1 million tons of helium-3, which can fully
meet the entire Earth’s power demand for a period of
more than 1000 years.
— And what is the use of Mars?
— A mission to Mars is to be an international project.
Mars is a potential new habitat for humans. The problem
of closed space, which is what the Earth is for us now,
will sooner or later lead to conflicts in the civilization’s
development. The manned space flight is needed to solve
this problem. Besides, a mission to Mars will allow to
develop advanced technologies which will make it possible
to fly long-distance missions to the depth of the solar
system, to energy resources of Jupiter and Uranus.
Nikolay Sevastiyanov was born in 1961 in Chelyabinsk.
In 1984 he graduated from the Aerodynamics and Space Exploration
Department of the Moscow Physical and Technological Institute.
In 1984 he took a job at NPO Energia as an engineer and
rose through the ranks to the position of a deputy general
designer. Since 2000 he has been director general of
Gascom joint-stock company. In May 2005 he was elected
President of Energia corporation.
ABOUT THE COMPANY
Rocket and Space Corporation Energia dates back to 1946.
Energia was the first in the world to launch an artificial
satellite of Earth, unmanned probes to the Moon, Venus
and Mars, launched the first man in space. Its major
stockholders are the Russian government (38.22%) and Razvitite Investment
Company (17.25%). Energia’s net losses in 2004 were 235.2
million rubles, its revenue was 5.35 billion rubles.
November 24, 2005, No.221