Major Political Decisions Needed to Secure Galileo’s Existence Beyond 2014, EC Says

Europe’s satellite navigation systems are making progress but face “fresh challenges,” the European Commission said in a midterm report on Galileo and the European Geostationary Navigation Overlay System. The programs have been slowed by cost overruns, price increases and lack of competition in some contract awards, it said. The economic situation of the EU and its members has led the EC not to ask for additional money in the current budget, but that decision, too, is causing delays and increasing costs, the EC said. And political decisions on the governance and financing of the projects are needed, it said.

EGNOS, which increases the accuracy of signals from satellite navigation systems, began operating in October 2009 and is already benefiting users in agriculture, rescue operations, geolocalization and cartography, the EC said. It will soon be used for civil aviation as well, it said.

Galileo is still being developed, the EC said. It has two experimental satellites validating the technology for future satellites and ensuring that spectrum allocated to the program is working, it said. Four major contracts related to deployment were awarded in 2010, and the last two will be allocated this year, it said.

Eighteen satellites are expected to be operational in 2014, and the first two are scheduled for launch in Q3 of this year, the EC said. A second pair will follow in early 2013, then two more every quarter until the initial operational capacity is reached, it said. Once that happens, Galileo’s commercial and safety-of-life services will be tested, the EC said. It would be best for the program to have 30 satellites, Industry and Entrepreneurship Commissioner Antonio Tajani told reporters Tuesday. An estimated $2.5 billion will be needed 2014-2020 to complete Galileo, the EC said.

The program is beset by uncertainties and risks, the EC report said. The original industry consortium’s failure to agree on how to develop Galileo sparked delays and cost overruns. A second experimental satellite had to be sent up to retain the use of frequencies assigned by the ITU. Competitive bidding hasn’t been possible in some circumstances -- for example when there was a monopoly provider, as in launch services -- during the deployment stage, increasing costs. EGNOS’s maintenance requirements and the need to develop the system have cost more money and the project still doesn’t cover all of Europe, it said.

There’s also a question mark about just how much direct revenue the EU will gain from Galileo and EGNOS, although downstream markets are likely to bring substantial economic and social benefits, the EC said. The services made possible by the systems are extremely important to Europe’s economy, and some results may be visible in 2014 when the 18 satellites are online, Tajani said.

Another issue is the compatibility and interoperability of satellite navigation systems globally, the EC said. There are ongoing talks with the U.S., Russia, India, Japan and China, it said. Asked about chances for EU cooperation with Russia, Tajani said he wouldn’t rule out “healthy relations” with that country, and the current relationship could be stepped up.

An overlay of frequencies with China is, however, a “major problem for the security” of the EU and its members, the EC report said. Despite commitments from European countries and the EC, the problem hasn’t been resolved and “a solution will not be found without political support from those players and the European Parliament,” it said. Tajani said a recent meeting with Chinese officials showed that they want agreement.

Other political issues must also be resolved, the EC report said, including how to deal with risks inherent in technologies relating to nuclear fusion, space, air traffic management and life sciences. A funding mechanism for the 2014-2020 phase of Galileo must be found as well as a way to apportion risks between the EU and its members, it said. Budget and financial principles governing the continuation of Europe’s satellite navigation programs are also needed, it said. The EC will make a detailed proposal later based on guidelines set by the European Parliament and Council of Ministers, it said.

Tajani downplayed reports that a German company awarded one of the Galileo contracts considers the project worthless. The comment was apparently included in a U.S. State Department cable, posted by WikiLeaks, which cited a company manager as saying Galileo is a stupid idea that serves only French interests. But Tajani said the contractor is wholeheartedly committed to the delivering the system and has denied the “indiscretion” made public on WikiLeaks. “WikiLeaks isn’t the gospel,” he said.