2006 ESA Budget Emphasizes Independence, Satcom Technology

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  Space News Business

2006 ESA Budget Emphasizes Independence, Satcom Technology

By PETER B. de SELDING
Space News Staff Writer
posted: 23 January 2006
11:53 am ET


The European Space Agency’s (ESA) 2006 budget reflects a renewed emphasis on technology independence and communications satellites. Beyond new investments in those categories, the budget mirrors the agency’s 2005 spending plan.

The 17-nation ESA will have 2.903 billion euros ($3.5 billion) to work with this year, plus still-undetermined investments from member states that made tentative commitments to programs in December during a meeting of ESA governments to determine a five-year spending plan.

The budget figures release Jan. 17 include a 20.2 million-euro contribution from Canada, an ESA associate member.

ESA is placing greater emphasis on satellite technology development. It has been increased to 4.5 percent of the total budget, reflecting European governments’ concerns that Europe is overly dependent on U.S. suppliers in certain fields. In 2004, technology development was 3.1 percent of total ESA spending.

Telecommunications satellites also have found new favor with ESA governments. The large AlphaBus satellite platform, now under construction, and the related AlphaSat satellite payload is the main reason why telecommunications spending in 2006 will account for 7.35 percent of the ESA budget, compared to 5.5 percent in 2004.

A stable budget is all that ESA Director-General Jean-Jacques Dordain has dared hope for in the coming years. To provide for growth, Dordain is counting on the equivalent of about 900 million euros per year in space spending on the part of the 25-nation European Union and its executive arm, the European Commission, starting in 2007.

Whether the European Commission will have a space budget of that size remains unclear. The main source of European Commission space investment — outside the Galileo satellite navigation system — is the multi year 7th Framework Program on Research, Technological Development and Demonstration Activities for 2007-2013.

The European Commission proposed last spring that a special budget line called “Space and Security” be included in the research budget. The commission proposed a total funding of 3.98 billion euros.

But in December, disagreements among European Union governments over spending priorities forced across-the-board budget reductions. European Commission officials said Jan. 17 they expect the “Space and Security” budget to be cut by about 30 percent. Final figures will not be determined until June, when the European Parliament votes on the budget.

“The temptation is strong in Brussels to look at this budget line and say: ‘Space? That’s ESA’s job. Security? That’s for the defense budget,” said one European government official.

The EU difficulty in confirming its budget has forced ESA and the European Commission to delay the creation of a common space policy. The policy, which will detail spending levels and investment priorities, originally was expected in late 2005.

Addressing a Jan. 16 press briefing here, Dordain said the two sides now do not expect to conclude a common space policy until the first half of 2007.

“I prefer to have a delay that results in a document that is more than just a sum of hopes, and that includes a budget, than one that is on schedule,” Dordain said. “The fact is that I do not know today what the EU is going to invest in space.”

Dordain said that ESA governments have given the agency’s management new powers to shift money around in the annual budget, and to add flexibility to the agency’s geographic-return rules. These rules oblige ESA to return to each member state 90 percent of its program investment in the form of contracts with companies in the nation in question.

Dordain said that starting this year, ESA program managers no longer need to guarantee the 90 percent geographic-return commitment for each mission, but can let the return investment for a given nation in a project slip to around 80 percent, so long as over a given four-year period the average return is 90 percent.

A second financial reform that will go into effect in 2006 will permit the agency to keep unspent program funding instead of returning it to the member states each year, only to ask for it again the following year.

Dordain said the past practice has distorted program managers’ planning, causing ESA to ask for more funds than necessary to protect itself in the event a mission develops faster than planned, and payments to industry need to be made more quickly than planned.

“With the new flexibility, I can keep the money from one year to the next,” Dordain said. “On the other hand, I can ask for less than I normally would because I don’t need to anticipate the funds being taken away at the end of the year. So everyone wins.”

Comments: pdeselding@compuserve.com