Irene Klotz CAPE CANAVERAL, Fla. Reuters Published Friday, May. 18, 2012 10:40AM EDT Last updated Saturday, May. 19, 2012 7:44AM EDT

An Obama administration plan to cut the cost of spaceflight services faces a key test on Saturday when a privately owned rocket lifts off for a practice run to the International Space Station.

If successful, Space Exploration Technologies, or SpaceX, would become the first private company to reach the $100-billion outpost, which flies about 390 kilometres above Earth.

It is, by all accounts, an important step, bordering on a giant leap, for commercial space, said Michael Lopez-Alegria, a former NASA astronaut and space station commander who now heads the Commercial Spaceflight Federation, a Washington-based industry association.

SpaceXs Falcon 9 rocket and Dragon capsule are scheduled for launch at 4:55 a.m. EDT on Saturday from Cape Canaveral Air Force Station.

If everything goes as planned, it would reach the space station on Tuesday.

Since the space shuttles were retired last year, NASA is dependent on partners Europe, Japan and especially Russia to fly to the station.

Instead of building a shuttle replacement, the U.S. space agency is spending about $3-billion a year on a new rocket and capsule to send astronauts to the moon, asteroids and eventually to Mars.

To reach the station, NASA is investing in five U.S firms SpaceX and Orbital Sciences Corp ORB-Nfor cargo transports; and SpaceX, Boeing BA-N, Sierra Nevada Corp, and Blue Origin, a startup owned by Amazon founder Jeff Bezos, for passenger ships.

All the companies are contributing their own funds as well, a break from traditional U.S. government procurement practices. Rather than having their costs reimbursed, NASAs commercial partners are paid when they achieve predetermined milestones.

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SpaceX rocket preps for first commercial flight to space station