Editorial: Resolving the MTG Controversy

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Germany’s unhappiness at not winning the lead industrial role on Europe’s next-generation weather satellite system is understandable given the program’s size and the fact that Germany, as Europe’s largest economy, is the program’s biggest financial contributor. But it is regrettable that the German government, in its frustration, is looming as a potential obstacle to the European Space Agency (ESA) beginning work on the program.

Europe’s Meteosat Third Generation (MTG) program appears stalled after Germany and Portugal withheld their votes at a March 26 meeting of the Eumetsat meteorological organization’s ruling council that was intended to line up national financial commitments to the effort. Unanimous approval from Eumetsat’s 26 member states is required for the 3.3 billion-euro ($4.4 billion) MTG program to move forward.

The impasse was not unexpected: Eumetsat had twice postponed the meeting due to uncertainty over German support dating back to February. That was when ESA, which was responsible for selecting the MTG prime contractor, passed over a German company, Astrium Satellites, in favor of Thales Alenia Space of France to lead the effort. Notably, Thales Alenia Space’s main partner on MTG is OHB Technology of Germany, which would be responsible for providing the satellite platform.

Slated for launch starting in 2016, MTG comprises six geostationary-orbiting satellites, four equipped with imagers and two with sounders for measuring atmospheric temperature and humidity. Eumetsat, whose members contribute according to the size of their economies, is paying 75 percent of MTG’s cost; ESA is contributing 25 percent.

Germany’s argument, that since it is MTG’s biggest overall contributor its industry should get the prime contract, appears based on ESA’s geographic return policy, under which the agency distributes program work among its member states in proportion to each nation’s investment in that program. Eumetsat has no geographic return policy, but since ESA was the MTG contracting authority Germany presumably could have secured the lead role by contributing a greater share than France to the ESA portion of the program.

Germany in late 2008 made clear that winning MTG was a priority and subsequently found itself in a bidding war with France, whose industry has built all of Europe’s previous geostationary weather satellites. Germany likely could have outlasted France by virtue of having deeper pockets, but to its credit called off the chase: Both sides agreed to cap their respective MTG contributions at ESA to 34 percent.

This left ESA to make the contract award as it saw fit. When Thales Alenia Space came out on top, Germany reacted by questioning the integrity of the source selection process.

There is no reason to suspect that ESA’s choice was based on anything other than best value for money — Thales Alenia Space’s 1.25 billion-euro bid to build the spacecraft was 160 million euros lower than the Astrium Satellites’ offer. Nonetheless, ESA has agreed to have the selection evaluated by an independent review board. The six-person board is expected to report back in time for a scheduled June meeting of ESA’s Industrial Policy Committee, which has the authority to release the funds to get Thales Alenia Space started on the MTG work.

German government officials know that without their approval and cash contribution the MTG program cannot go forward. They are equally aware that if the award is overturned to placate German industrial concerns the result would be disastrous for ESA; it would undermine the agency’s ability to do much of anything.

This is why Germany must accept without question findings of the MTG source-selection review panel, whose members include Joerg E. Feustel-Buechel of Germany, a former ESA director, and Per Tegner, former director general of the Swedish National Space Board. That would allow work on the MTG system to begin on schedule, assuming the board upholds ESA’s selection of Thales Alenia Space and that Portugal drops its objection, which likely is related to that country’s economic difficulties rather than concerns about how the program is being run.

For Germany as a whole — setting aside the fact that OHB and Astrium Satellites are in different regions of the country — the industrial and economic consequences of a decision in Thales Alenia Space’s favor would be negligible: Under geographic return, which still applies here, the work share would be apportioned evenly between France and Germany.

Moreover, while Germany would not get the prestige associated with having the lead industrial role, OHB would undoubtedly grow more competitive internationally as a result of its work on the program. This would strengthen Germany’s position on future Eumetsat and European Union-led space programs, which are not subject to geographic return rules and are growing in scope and number. It would also cement OHB’s new geostationary satellite platform, which appears to have potential in both commercial and government markets.

The danger here is that Germany will respond to a board recommendation in Thales Alenia Space’s favor by dramatically reducing the percentage of German space spending that goes to ESA, thus giving the country more control over how its money actually gets spent. This could prompt other ESA members to follow suit, leaving the agency hard pressed to tackle the truly ambitious missions that are beyond the means of any of its individual member states.