PARIS — The European Space Agency (ESA) has awarded a €112 million ($147 million) contract to EADS Astrium to continue work on an upgrade to Europe’s Ariane 5 rocket, Astrium announced April 10.

The contract comes just months ahead of ESA’s November budget ministerial, where member states will decide the agency’s next multiyear spending plan, including a decision to continue the next phase of funding for the Ariane 5 Midlife Evolution (ME) or potentially initiate development of a next-generation launch vehicle, tentatively dubbed Ariane 6.

“This new contract, as well as the additional activities currently in the contracting stage, will enable the development of the Ariane 5 ME to continue until the November 2012 ESA Ministerial Council meeting to decide on the start of the next phases in the project,” Astrium said in a news release announcing the award.

At its last budget meeting in 2008, ESA approved €355 million to get started on the Ariane 5 ME, making it a major program that aims to boost the current Ariane 5’s performance by 20% with the addition of a new upper stage equipped with the Vinci restartable cryogenic engine. Between the motor upgrade and a new extended nose fairing, the Ariane 5 ME would deliver 12,000 kg (26,500 lb.) to geostationary orbit for the same price as the Ariane 5, which today is capable of lofting more than 9,000 kg to geostationary transfer orbit.

However, while Germany has remained steadfast in its support of the Ariane 5 ME, France has had a change of heart since the 2008 budget ministerial. Over the past year the administration of French President Nicolas Sarkozy has spent close to €200 million in public bond money studying designs for a modular, next-generation rocket that French officials say would be less costly to operate and less reliant on the commercial market to survive than the Ariane 5 and Ariane 5 ME.

As ESA’s two largest financial contributors, France and Germany agreed in February to hash out a common position on the future of European launch. The two sides have set a June 30 deadline for reaching consensus ahead of the ESA ministerial this fall.

But with the latest Ariane 5 ME contract award now in hand, Astrium expects ESA to give the go-ahead in November to complete development of Ariane 5 ME, an effort that could cost €1.5 billion on top of the money spent to date, which in addition to the €112 million includes an initial two-year development contract worth €150 million that ESA awarded to Astrium Space Transportation in December 2009.

“This €112 million contract underscores [the] maturity of the Ariane 5 ME program,” Astrium Space Transportation CEO Alain Charmeau said in the April 10 news release. “As prime contractor, Astrium will continue to coordinate the work of more than 30 companies across Europe, with whom we have already completed major phases in the development of a launcher that anticipates the needs of both commercial and European institutional markets.”