The economics of Chandrayaan-3 & the dividends it can yield beyond research

By Surendra M Vaidya

The Chandrayaan-3 is a story of a stellar confluence of right costing, well-calibrated public-private sector partnering and a genuine commitment to space technology and research. The Indian Space Research Organisation (ISRO)’s third mission to explore moon since the first attempt in 2008, had a textbook liftoff with heightened hopes now for a soft landing on the moon on August 23rd. While we hope and pray for a flawless mission, here are some pointers on what stands out about the important decisions made by ISRO.

1, ISRO’s stated goal to stay focussed on R&D, international collaborations and sourcing/ developing raw materials which are critical to the mission, assembly, integration and testing.
2, Involve Indian Private industries on partnership basis and fund them for the critical infrastructure and avoid competition.
3, Use of frugal engineering and extensive simulations by mathematical modelling and innovate on low cost technologies, with the help of Indian academia.

ISRO successfully implemented concurrent engineering and initial trials on there on workshops and later started involving private and public sector in development too. Today, more than 400 industries are partnering with ISRO for launchers, payloads and space craft and ground systems. ISRO has one of the best facilities in the world for ground testing in simulated chambers and qualifying them. Various boards formed by ISRO have performed a tremendous task in testing’s, understanding and involving in international space rules and regulations and following them, pre and post mission analysis and corrective and preventive actions once we hit a set back or challenge. ISRO is probably the only department of the Indian government which involves and shares challenges with academia, Industries, other R&D institutions and has managed well with international space agencies and manufacturers. ISRO has huge thrust on understanding the challenges and more focus on known why than know how and the academia developing the right talent.

The Indian industry, on its part, has been busy in developing infrastructure that suits space level fabrication, setting up quality culture and emphasis on process capabilities which are beyond CPK (the process capability index- used to measure the ability of a process to product output within the specification limits defined by the customer) of 1.6 (in fact many of the industries have CPK more than 2.2). Alloys used in fabrication, use of composites, processes and technologies where not very easy task but industry absorbed in just 2-3 years and today Indian Industry is capable handling any challenge and developing manufacturing and testing process on our own. This process started in the 1980s and got matured in 21st century. With the government initiative of Atmanirbhar and opening up space for private industries.

The ISRO will now be able to focus on R&D and complete manufacturing, assembly, testing and readiness of payloads, launchers and ground stations can be taken up by Industry on stabilised platforms like PSLV, 1k-2k Satellites and many more systems. With ISRO handing over PSLV to consortium of Industries and allowing Indian Industries to work on GOCO model on ISRO facilities learning will be accelerated.

Here at this stage we must congratulate and appreciate efforts taken by private industry, even though seed money for infrastructure was given by ISRO for very specific and unique facilities, industry from listed and non-listed companies committed for the area, manpower, training and qualification of personal and infrastructure, spend on R&D for manufacturing technologies and work on very small numbers which was keeping overall facility utilisation to just 30-40 per cent. In short, ISRO was assuring business as development its matured and was trying to compensate as much as possible with our procurement process, but Industries were ready to have a long gestation period in development and later successful launch and govt approvals for commercial production. ROI (Return on Investment) for such endeavours takes anywhere between 10-12 years. This shows Indian Industry if given a chance is ready to participate and contribute in to programs and initiatives of national importance. Today, remote sensing, tele education, tele medicine, disaster management, mapping of natural resources, weather forecast, best areas for farming and for fishing would not have been possible if the industry had not supported and participated in every tender or RFP that was released by ISRO and we then would have kept on importing such crucial data.

The Numbers

To the best of my analysis, the Indian Industry has spent / or invested more than Rs 3000 crore with total manpower of more than 20,000 employees and these numbers are growing to expand quite rapidly as new space law will be passed by the government of India and clarifying rules of the game. Learning from DAE (Department of Atomic Energy) on nuclear liability issues, I am sure the government of India will state clearly roles and responsibilities. Once this is cleared by parliament, Indian Industry will lead from front on space tourism and space exploration and can capture sizeable global business which is predicated to be USD: 700Bn

Real game changer is on horizon when more than 20 start-ups are actively participating in out-of-the- box innovation and research to establish Indian Industries capability to lead in global marketplace rather than catching up which we were doing in last few decades.

ISRO spend on missions currently can be briefly described as 30 per cent on raw materials, consumables, chemicals; 20 per cent on fuel and oxidisers; another 20 per cent on manufacturing and rest on testing, launching, insurance, documentation and design.

The Indian industry is participating mainly in manufacturing and providing services, so industry turnover is not much and distributed over 400 companies. Once the government though space law and privatisation initiative allows to have products for space, the industry can make inroads in the global market and be ready to pump in more investment and engage more employees. Also, when the start-ups are ready with products, a tier-based system will emerge and then scale of operations, optimisation and economic production batches will make industry to earn and save for future investments and participate in global programs by making unmatched offers on quality, cost and delivery.