EMMA KELLY / PERTH
After years of delays and political fighting, Europe's Galileo project, designed to secure a slice of the multi-billion dollar satellite navigation market, is to go ahead
If the story of Europe's efforts to get its Galileo satellite navigation system off the ground were made into a play the genre would be tragedy, comedy or even farce. In its short four-year life on the drawing board, the project has hit one hurdle after another, leaving some to question whether Europe is up to the job.
The saga appears to have come to a happy ending, at last, with the green light from the European Space Agency (ESA) in mid-May after the deadlock over funding was finally resolved.
The story begins in Brussels in February 1999, when then-European transport commissioner Neil Kinnock announced the development of a 30-satellite system to reduce the reliance on the US Department of Defense-controlled global positioning system. Galileo was to be operational by 2008 to secure a slice of the €40 billion ($47 billion) global navigation satellite system (GNSS) market expected to emerge by then, creating 150,000 jobs in Europe.
But since then Galileo has missed deadline after deadline. Europe's transport ministers were first expected to give the go-ahead in December 2000, but unanswered questions about financing and managing the project resulted in their decision being postponed by four months.
In April 2001, with some countries still unsure about funding and management issues, the transport ministers gave a partial go-ahead and released €100 million for limited technical work. A full decision was postponed until December 2001, allowing cost-benefit studies and further investigation of a public-private partnership to finance and manage the system.
A PricewaterhouseCoopers (PWC) study, which showed a "strongly positive" benefit-to-cost ratio, failed to secure a yes vote in December 2001, with a decision once again postponed, this time to March 2002.
The go-ahead came in March 2002 - almost three years after the launch of the programme - once funding and management issues were resolved. Trans-port ministers requested the EC set up the Joint Undertaking - the body to manage the project for the first four years and award development and management contracts - "without delay" and to release its share of funding for the development phase.
Since then, however, political bickering has delayed the Joint Undertaking from beginning its work and ESA from releasing its €550 million funding for the development phase.
Workshare woes
First there was Germany and Italy fighting over industrial workshare. This was resolved earlier this year, with Germany taking responsibility for management activities and system architecture, and Italy for detailed system engineering.
Most recently Belgium and Spain were unhappy with their workshares. Spain was originally given 9.5%, wanted up to 11%, but would accept 10.25%. Spain argued it has been a major player in the development of the European Geostationary Navigation Overlay System (EGNOS) - the first stage in Europe's satellite navigation programme - and has been a strong supporter of Galileo throughout its troubled history. Belgium wanted to increase its 4.5% share to 5%.
The in-fighting frustrated Europe's space and navigation industry, which has been patiently waiting for Galileo contracts to be issued. One space executive says the situation - a multi-billion euro programme being held up by Spain wanting less than €5 million more work (0.75% of ESA members' €550 million contribution) and the other four big countries (France, Germany, Italy and the UK) not prepared to give €1.2 million each - is "just crazy". This last dispute was finally resolved only when telecommunications ministers agreed a plan to use funds set aside for overspend to cover the shortfall.
The Commission has already released €240 million for the programme and a further €320 million is available this year. Olivier Onidi, head of the EC's Galileo unit, concedes that the Commission was "quite concerned" about the latest delay.
The concern now is the radio frequencies that Europe secured at the World Radio-communication Conference in 2000. Europe is in danger of losing these valuable frequencies unless it has a Galileo testbed using the frequencies by June 2006.
To meet this date a testbed will have to be launched by September 2005, says Onidi. Although the tender was issued last year for the testbed development, contracts have yet to be awarded. "If we lose our frequencies because we are not in a position to occupy them before June 2006, then we run into severe difficulties," Onidi says.
Industry hopes that now ESA funding has been released, the first industrial contracts for the testbed could start at the beginning of July. ESA has already evaluated two bids for the work - from Galileo Industries and Surrey Satellites - and one space industry executive believes the schedule "is a bit tight, but should be achieved".
The optimum schedule after that, says Onidi, is for two or three additional satellites to be launched by early 2006 to prove the system, so that the future concession holder has all of the assurances that the system works. Issuing the tender to select the private consortium that will be awarded the concession for the deployment and operation of the system is also a priority this year, says Onidi.
The EC proposes the remaining 26-27 satellites be launched from 2006, which will give it two years to complete the whole infrastructure. The crucial start-up date for Galileo has always been 2008, with the EC believing it has to be operational by then in order to secure a major chunk of the satellite navigation market.
Sales forecast
PWC's study concluded that by 2008 the GNSS market will be in "rapid growth" and it will be well ahead of the now delayed, more advanced GPS III. "If that is achieved, we estimate annual sales of Galileo receivers will go from €100 million in 2010 to around €875 million by 2020, representing market penetration from 13% to 15%," says PWC.
However, some question whether 2008 is now feasible. "I don't think there is any way of deploying the full system by 2008. After all, the public sector still has to approve the next €2 billion and going by their normal progress this is unlikely to be approved before 2006. An operational system by 2010 seems realistic," says one company.
The EC acknowledges the private sector's concerns about Galileo delays, but says industry is still backing the programme, recognising the value of the potential market. "Yes, the private sector is very concerned about the delays; they would like to be in the market as soon as possible," he says, adding that they know the programme is bound to happen.
Onidi admits that meeting the schedule will be difficult, but beyond the political issues and concerns about retaining frequencies, there are no more threats, he says. The USA is now welcoming the project and sees Galileo as complementary to GPS. Interoperability issues have been resolved, says Onidi, although the exact frequency plan has not been finalised. This has caused concern, with both Galileo and GPS to cohabit on the same frequency.
Talks with Russia on Glonass interoperability have not progressed, however. Despite public assurances that it will continue to invest in and upgrade Glonass, there is still some uncertainty about the system's future, says Onidi.
Meanwhile, discussions with China on its role in Galileo are due to start shortly. China has said it wants to invest in Galileo and will base its future satellite navigation plans on it.
The EC does not believe it underestimated the task of getting Galileo operational, but political issues have proved a surprise. Galileo is a "grand European undertaking" involving a new and complex system, discussions with the USA and the concept of a private-public partnership. "The only thing we underestimated was a few countries getting so excited about it that they would hold back the project," says Onidi.
No doubt the lessons learned - particularly about the role and structure of ESA - will be important ones, especially as Europe formulates its space policy. But rehearsal time is now over for Galileo and the show really must go on.
Source: Flight International