Select Committee on European Scrutiny Seventh Report


GALILEO JOINT UNDERTAKING


(a)
(21872)
14304/00
COM(00) 750

(b)
(22518)
10251/01
COM(01) 336


Draft Council Resolution: GALILEO — Involving Europe in a new
generation of satellite navigation services
.



Draft Commission Regulation on the establishment of a Galileo joint
undertaking.


Legal base: (b) Article 171 EC; consultation; qualified majority voting
Document originated: (b) 20 June 2001
Forwarded to the Council: (b) 22 June 2001
Deposited in Parliament: (b) 10 July 2001
Department: Transport, Local Government and the Regions
Basis of consideration: (a) Minister's letters of 2 April and 9 May 2001
(b) EM of 3 August 2001
Previous Committee Report: (a) HC 28-i (2000-01), paragraph 17 (13 December 2000) and HC 28-vii (2000-01), paragraph 8 (28 February 2001)
(b) None
To be discussed in Council: (b) 6 December 2001
Committee's assessment: Politically important
Committee's decision: (Both) Not cleared; further information requested

Background

6.1  Galileo is a joint initiative between the EU and the European Space Agency (ESA) to develop a European civilian satellite navigation system.

6.2  In April 1999 we scrutinised a Commission Communication: Galileo — Involving Europe in a New Generation of Satellite Navigation Services.[38] That document examined the existing two global navigation satellite systems — the US Global Positioning System (GPS) and the Russian Global Navigation Satellite System. The Commission rejected reliance on either of these two systems and instead advocated an EU system — Galileo. The document was later debated in European Standing Committee A.

6.3  We considered a draft Council Resolution setting out how to proceed with the Galileo project in February 2001 (document (a)), and requested information on the substantive areas that divided the parties. This information was provided in the Minister's letter of 2 April, but we decided to wait until the Commission submitted proposals before considering again whether to clear the document.

6.4  This present document (b) builds on the Communication and the Resolution. It aims to set up a joint undertaking with responsibility for implementing the development phase[39] and preparing for the subsequent phases of the project.

The document

6.5  The proposed Regulation states that the joint undertaking will be based in Brussels and sets out its aims and statutes. The main tasks of the joint undertaking are:

    —overseeing the implementation of the development phase and preparing for the deployment phase;

    —through the ESA, launching the research and development activities needed successfully to complete the phase for the development and co-ordination of national activities as well as launching a first series of satellites to finalise technological developments, and ensuring the large-scale demonstration of the capabilities and reliability of the system; and

    —mobilising the public and private funds needed and setting up the management structures for the various phases of the programme.

6.6  The most important provisions of the statutes are:

    Article 1

      —the founder members will be the ESA and the Community, represented by the Commission. The European Investment Bank and private companies which have subscribed a minimum initial capital of 20 million euros may also become members.

    Article 3

      —the ESA will be entrusted to carry out activities required during the development phase.

    Articles 7 to 10

      —the joint undertaking will be headed by an Administrative Board, an Executive Committee and a Director. Where necessary an Advisory Committee can be consulted.

    Article 19

      —the joint undertaking is to be set up for four years.

    Article 21

      —any matter not covered by the statutes will be covered by the law of the state where the undertaking has its seat.

The Government's view

6.7  In his Explanatory Memorandum the Minister for Transport at the Department for Transport, Local Government and the Regions (Mr John Spellar) tells us:

    "The UK Government continues to support Galileo in principle, but, like some other Member States, it remains concerned about many aspects of the Galileo programme. These concerns were recognised by the Transport Council in April this year when it endorsed a number of conditions for the future development of Galileo. These included the need for improved project management arrangements.

    "The Government supports the need for a single procurement and project management structure and is currently considering the draft Statutes of the joint undertaking. There are a number of concerns, including the lack of direct control by Member States, the extent of Commission control, the proposed role of the European Space Agency, and the basis for involvement of the private sector. There are also concerns on whether the proposed structure will be conducive to attracting private sector involvement and funding in the subsequent phases of the project."

6.8  The Minister notes that two reports from the Commission may solve some but not all of these problems. The Commission Working Paper which provides the cost benefit analysis of Galileo is yet to be studied by the Council. A further financial study on Galileo is expected by the end of November.

Conclusion

6.9  Previous proposals relating to Galileo have been characterised by undue haste on the part of the Commission. We are therefore pleased that on this occasion there appears to be a more detailed analysis of the Galileo project and that more studies are being conducted into its financial aspects. However we are concerned to note that the Transport Council planned to reach political agreement at its meeting on 16 October. The Conclusions of that Council make no mention of the joint undertaking and we seek confirmation from the Government that political agreement was not reached at the meeting.

6.10  The concerns highlighted by the Minister are serious ones. We request further information from the Minister on the proposals the Government will be putting to the Council to resolve them, on how much support there is for the Government's stance from other Member States, and on whether the Government is likely to be able to assemble a blocking minority.

6.11  Meanwhile we do not clear the documents.


38  (19950) 6528/99; see HC 34-xvii (1998-99), paragraph 1 (28 April 1999). Back

39  The establishment of Galileo is set out in stages: phase 1 is the development and validation stage (2001-2005); this is followed by the deployment phase (2006-2007) and an operational stage from 2008 onwards. Back


 
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