Khrunichev's director Alexander Medvedev said the contract to launch the two Grace satellites earned his company about dlrs 10 million, which was barely above production cost.

``We have to charge bottom price to enter the market,'' he said at a news conference.

Medvedev said that the launch price could be increased later as Rockot wins a market niche. He said another three Rockot launches are set for this year.

Khrunichev built the Rockot by fitting the SS-19 with a new Breeze-KM main engine. A version of the engine will also be used to power the Proton-M, an upgraded version of Khrunichev's Proton booster in service since 1965.

Thanks to the heavy-lift Proton, Khrunichev has become the top cash cow for the beleaguered Russian space industry, putting commercial satellites _ mostly foreign _ into high, geostationary orbits throughout the 1990s. Russia receives tens of millions of dollars for each launch, a coveted revenue source for an industry struggling to survive on a fraction of generous Soviet-era state funding.

Medvedev blamed the sluggish global market for commercial space launches for last year's drop in the number of Proton launches. Khrunichev only launched two Western satellites into orbit atop Protons last year. Medvedev said another two commercial launches set for last fall had been postponed until this year due to problems with satellites.

Medvedev said his company had invested part of the earnings from commercial launches into research and development works for Rockot, Proton-M and the next-generation Angara rocket.

Khrunichev has also paid for upgrading the crumbling Soviet-era infrastructure of the Baikonur cosmodrome, which Russia leases from the ex-Soviet republic of Kazakhstan, and Russia's own Plesetsk cosmodrome used for Sunday's launch.

Medveded said Khrunichev paid for a backup power system at the Baikonur after the Kazakh authorities once cut power to the launchpad minutes before a scheduled commercial liftoff.

``Such incidents can land you in the madhouse,'' he said.