Select Committee on European Scrutiny First Report


EUROPEAN SATELLITE NAVIGATION SYSTEM (GALILEO)


(21872)
OTNYR
— 

Commission Communication: GALILEO — involving Europe in a new generation of satellite navigation services.


Legal base:
Department: Environment, Transport and the Regions
Basis of consideration: EM and Minister's letter of 12 December 2000
Previous Committee Report: None; but see (19950) 6528/99: HC 34-xviii (1998-99), paragraph 1 (28 April 1999)
To be discussed in Council: 20-21 December 2000
Committee's assessment: Politically important
Committee's decision: Cleared on the basis of an unofficial text supplied by the Government, but further information requested

Background

  17.1  On 28 April 1999, the Committee reported on a Commission Communication: GALILEOinvolving Europe in a new generation of satellite and navigation services.[34] This document made the case for the Community developing its own Global Navigation Satellite Systems (GNSS). It pointed to the ever-widening civil use made of GNSS, not only, for example, in transport but also in manufacturing industries and the service sector for positioning and/or precision timing. At present there are two core GNSS — the Global Positioning System (GPS) provided by the United States, and the Russian Federation's Global Navigation Satellite System (GLONASS). Both were originally designed for military purposes and do not fully meet developing civil requirements, though they do offer free access to civil users. The US has started on a major development for a second generation GPS. In its Communication, the Commission rejected the possibility of continuing to rely on GPS and GLONASS (the so-called "zero option"). Instead, it proposed a European system which would operate alongside, and be inter-operable with, the GPS. This proposal has the title GALILEO.

  17.2  We noted in our Report that not only would the financial cost be large — with uncertainty about how much might be privately funded — but that there were also important strategic economic, social and security-related issues directly involved. More broadly, there were linkages between a decision on this project and the size and shape of European involvement in wider space-related technological developments generally and the employment consequences. The Government at the time expressed a number of reservations. It said that it considered there was a need for further analysis of the advantages and disadvantages of the zero option, that further work was needed on exploring how private sector participation could be achieved and how a public-private partnership could be developed. It considered that users' requirements and benefits needed greater investigation and cost/benefit analysis, amongst other things testing whether it was realistic to expect certain users to pay for use of the system. There were concerns also from the security and defence perspective about preventing the system providing advantages to potential aggressors. We recommended the proposal for debate and this took place in Standing Committee A on 9 June 1999.

  17.3  In July 1999, the Transport Council asked the Commission to begin the GALILEO definition phase and report the results by the end of 2000. The intention was that the Council would then decide whether the project should proceed to the next phase — development and validation — which the Commission plans should take from 2001 to 2005. That would be followed by a deployment phase (2006-2007) and an operational phase from 2008 onwards.

The document

  17.4  The Minister for Transport, Department of Environment, Transport and the Regions (the Rt Hon Lord MacDonald) tells us in his letter of 12 December 2000 that the Commission adopted a Communication on the results of the GALILEO definition phase on 22 November. That phase had been carried out jointly by the Commission and the European Space Agency (ESA) over the last year. He explains that the Presidency and the Commission are seeking conditional agreement at the Transport Council on 21 December to launch the development and validation phase, at an estimated cost of 1.1 billion euros, to be shared equally between the Community and the ESA. The official published document setting out the Communication has not yet been received but the Minister has made available to us an unofficial e-mail version. He has provided an Explanatory Memorandum, dated 12 December, based on that document.

  17.5  The document says that, during the definition phase, the Commission and the ESA have mobilised a very large part of the European space industry as well as a large number of potential service providers with a view to defining the broad outlines of the project. It reaffirms the strategic and economic importance of the project and endorses a proposal that it be continued to the development phase, subject to certain conditions regarded by the Commission as essential to successful implementation. However, it is not clear to us from the document what those conditions are. On the basis of the work done so far, the Commission says that:

  • satellite radio navigation is a key technology for the development of European economies and that the deployment, to that end, of a constellation of EU satellites is indispensable to safeguard the Community's independence;

  • cost/benefit studies show GALILEO to be cost-effective and sufficiently attractive to obviate the need for any further public funding in the form of subsidies from 2007;

  • for the development and validation phase, the essential funding from public subsidies has been planned so that there will be no need to call upon additional public funding from the Community or ESA budgets (in other words, the costs can be met from within planned existing budgets);

  • the funding of the deployment phase, comprising the construction and launch of satellites and establishment of the ground-based infrastructure network, will require private-sector investment of some 1.5 billion euros, with an appropriate public-private partnership to be put in place in the development and validation phase; and

  • the setting-up of a public-private partnership requires a legal and financial framework as soon as possible.

  17.6  In terms of the management arrangements, the Commission proposes a co-ordinated provisional management structure involving the Commission and the ESA to be set up in 2001, and that it should make further proposals for the final structure with an investment budget combining all the funds earmarked for the project. A report will be made each year to the Council and to the European Parliament on progress, with the funding of the deployment phase (2006-2007) to be clarified by the end of 2004.

The Government's view

  17.7  In his letter and Explanatory Memorandum, the Minister makes it clear that, although the Government is, in principle, supportive of GALILEO and recognises that it could bring benefits to the UK and Europe, it continues to have a number of concerns about the project. Along with some other Member States, it does not consider that the Commission's Communication has provided answers to all of its concerns, particularly about the costs, funding and lack of progress on development of a public-private partnership and a co-operation framework with the US. The Minister says that the Government expects further work to be carried out in 2001 to address these concerns. He explains that the Presidency, in conjunction with the Commission and Member States, are currently preparing a draft Council Resolution for consideration at the Transport Council on 20-21 December. This will seek endorsement of the project, subject to conditions. The conditions are likely to include the need for plans for integration of the European Geo-stationary Navigation Overlay Service (EGNOS — the initial European contribution to a civil global navigation satellite system (GNSS)) into GALILEO, the compatibility and interoperability of GALILEO with GPS and GLONASS, and the security of the system. Other conditions are expected to deal with the funding of the system, improved management arrangements for the development and validation phase, and the need to develop a public-private partnership. He says that the Government's endorsement of the Resolution will be subject to the acceptance by the Council of a number of strengthened and alternative conditions (differing from those proposed by the Commission) which the Government considers need to be imposed on any decision to proceed with the development and validation phase.

Conclusion

  17.8  We thank the Minister for his letter and Explanatory Memorandum, which we were glad to see before the Council meeting. However, it is plainly unsatisfactory that a Commission Communication on such an important and long-term proposal should be rushed through from publication on 22 November to a Council meeting in under a month at which the Ministers are invited to agree to take this project forward. We say this without prejudice to any view on the merits of the project. We recognise that the Minister will be seeking to ensure that there are conditions attached to any such decision which address the Government's concerns. We recognise also that the Government intends to continue to work with the Commission and its European partners to ensure that "GALILEO develops in the right way". However, this project now seems to have developed a momentum of its own, to an extent that the "zero option" now appears to be no more than a fall-back position should GALILEO fail at some stage. That may be right, but in the time available it has not been possible to consider this and other issues properly.

  17.9  In the circumstances, we clear the document, but we trust that the Minister will take a robust line regarding the conditions the Government considers should be attached to any decision to move forward to the next phase. We invite him to let us know whether any agreement is reached at the Transport Council and, if so, how far it reflects the conditions the Government was seeking to impose. We would also like to know whether it provides, in effect, for a substantive re-assessment of the project during the development and validation stage, for example if any of the specified conditions are not met. We think it probable that, when we have considered his replies, we shall request a post-Council evidence session.


34  (19950) 6528/99; see headnote to this paragraph. Back


 
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