March 23, 2001

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Mir Backer's Space Dreams Stay Alive

A P Kamath and Som Chivukula

As the Russian engineers were getting ready on Thursday to send the 143-ton Mir space station into a scorching oblivion in the Pacific Ocean, in Chicago Dr Chirinjeev Kathuria, known to his friends as space cowboy, made some time to reflect about his own ties with Mir.

It wasn't just the Russian pride that had been wounded when Moscow decided that it was too expensive to keep Mir going on.

For Kathuria, a doctor turned telecom businessman, had also fought -- along with fellow American investors including telecom businessman Walt Anderson and a Russian space agency, RSC Energia -- to keep Mir alive, so that it could be converted into a tourist attraction.

But as Kathuria's firm, MirCorp struggled last year to raise enough money to convert Mir into a tourist attraction, Moscow decided to pull the plug. Kathuria's company, which had already committed about $40 million for Mir, had planned to seek a $117 million IPO this year. But the Russians wanted the money now, yesterday.

"The collapse of the stock market worldwide affected the MirCorp financial investors," Jeffrey Manber, president of MirCorp, said late last year.

Manber is not convinced Mir had to be de-orbited.

"We want people to understand that this is a perfectly good space station coming down," he told news agencies two days ago. "We had a 77-day mission (to Mir) to fix some leaks, and determined that there was nothing wrong with it that some money could not have fixed.

"That's the great pity of the whole thing."

Mir, which has had more than 100 visitors from at least 10 nations, may be gone, Kathuria says but it will have a lasting legacy. Among its historic feat is cosmonaut Valeri Polyakov's space stay that lasted 438 days. Sergei Avdeyev, another Russian cosmonaut hero, spent more than two years in space over three flights.

"It pioneered (among other things) the concept of commercializing space," Kathuria continues. "So I have mixed feelings but it was a very expensive operation. Thirty years from now, this business of space tourism is something I'll remember -- kind of what the Wright Brothers did with the airplane."

If MirCorp had been given some more time to raise money, he says, Mir space station would have created "a milestone in space commercialization".

And yet Kathuria, who has a medical degree from Brown University and an MBA from Stanford, feels MirCorp has already achieved the milestone for the groundbreaking preparation it had done to commercialize space.

It wasn't like in the old days when the Soviet Union looked at 15-year-old Mir with immense pride and treated it as its space showcase. But with the collapse of the communist regime, and the subsequent decline of Russian economy, Mir started losing its clout. It had to pay its own way to survive.

Kathuria, whose dreams of becoming an astronaut were dashed when doctors detected flawed vision when he was about 12, dreamed of sending civilians into space.

His first customer, businessman Dennis Tito, gave MirCorp $20 million to be the first civilian in space. And a few months ago, NBC signed a $20 million deal with MirCorp to train and space-lift the winner of its new television show designed by the producer of Survivor. It was going to be called Destination Mir.

"Keeping Mir alive and active would have cost us at least $100 million a year," Kathuria said. "We were determined to go IPO, and make it all happen."

He had no doubt, however, over the success of space tourism.

"The Dennis Tito and Destination Mir flights have confirmed the revenue potential of Mir station," he had said in an interview last year. "We also foresee a major revenue stream from the more traditional sectors -- including space science, remote sensing and manned missions with the national or government space agencies."

The birth of International Space Station last year, with the backing of NASA and other space agencies, further challenged Mir's existence.

Finding its battle with Russian bureaucrats hopeless, Kathuria's company is now working with ISS. But it has decided to keep its name.

Kathuria feels the new venture should success, though he is running into bureaucracy once again -- this time with Americans.

Tito, who was promised an April 30 trip to the ISS instead of Mir, cannot make it unless NASA withdraws its opposition. The American space agency says since ISS is not fully constructed, it is not appropriate to send a civilian to it.

Kathuria feels Tito would be able to make his life desire come true at least in October this year.

He feels upbeat about the new venture.

"Sixteen governments are participating in the ISS," he says.

"We're going to build new modules using the MirCorp name because of its name recognition. A separate venture named Aurora will be used to buy the spacecraft."

He also says the new venture will be cost-effective.

"Mir cost $100 annually to operate," he says, with the cost expected to go beyond $200 million a year when it would have become tourist-friendly.

"The cost of running the ISS will be $100 million," he says. "We will put down a third of that, with revenues from TV and space tourism for the balance. But details are not determined yet."

As for the television show, Kathuria says: "We are continuing with the TV show. The new name will be Destination Space or Destination ISS -- most likely it will be Destination Space because of the ISS trademark."

What are some of the lessons he has learned?

"When we started the venture, there was less than 10 per cent chance that Mir will remain in orbit," he says. "When we became successful, the chances were about 20 per cent. But I didn't realize the impact of government involvement and political decisions that come into play. Still I never imagined we could come so far."

And yet he says he is convinced space, the final frontier, is going to fascinate people endlessly.

"There is abiding interest in anything connected with space -- be it the George Lucas movies or sci-fi fiction," he says. "It also provides soaring business opportunities -- let us never forget that."

And he will never forget his own dream of space travel.

"I am not in a hurry, though," says Kathuria, who is in his 30s. "First, we make sure we reach the break-even stage."

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