ESA and Member States in Standoff Over Galileo

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PARIS — The European Space Agency (ESA) has begun a war of nerves with several of its member governments following their continued refusal to approve financing for Europe’s Galileo satellite-navigation project, European government and industry officials said.

The most recent attempt to find ESA’s share of a funding shortage estimated at around 400 million euros ($480 million) came July 26, when the agency once again asked its member states to sign up for their share of the funding.

In a repeat of a similar meeting in late June, several governments declined. Officials said the decision will have several consequences.

First, it will slow negotiations between a European government agency and an industry consortium over the award of the Galileo concession. The consortium run the Galileo program and purchase most of the 30-satellite Galileo constellation with private and government funds.

But the consortium members have said they cannot commit themselves until they are certain that the investment agreed to previously by European governments is made.

ESA and the European Commission have agreed to share the costs of Galileo’s ground network and an initial group of four satellites as part of a program called In-Orbit Validation. It is this $1.2-billion contract whose funding has been blocked at ESA since late 2004.

“This makes things difficult for us, and certainly has an effect on our work, even if we are not directly involved in the negotiations,” Hans Peter Marchlewski, general counselor for the Galileo Joint Undertaking of Brussels, Belgium, said July 29. His organization is negotiating the concession contract with the industrial consortium.

Galileo Industries S.A. of Brussels, which includes several of Europe’s biggest space-hardware manufacturers, is responsible for doing the work under the In-Orbit Validation contract. It is this contract whose funds have not been released.

ESA awarded an initial, 150-million-euro tranche of the contract to Galileo Industries in December, on the assumption that the remaining funds would be committed by July.

Guenter Stamerjohanns, director of Galileo Industries, said July 29 that “several hundred people” would start going without paychecks in October if the funding is not released by then.

“We need a decision in September or we run into danger,” Stamerjohanns said. “We have been able to be flexible in our spending so that there has been no work slowdown so far. But everyone knows that industry can only work on available funding.”

ESA Director-General Jean-Jacques Dordain said the agency is in a standoff with some of its member states, with neither side moving.

“The member states tell me that I cannot go ahead with this program until they approve the funding, and that is true,” Dordain said July 28. “But it is also true that without this approval, I cannot pay industrial contracts” to companies with employees in these same nations.

The German government, represented at ESA by the German Aerospace Center, DLR, has been one of several governments insisting that future Galileo control centers and other infrastructure be located on its territory. But these decisions are not made by ESA, but by the European Commission and, later on, the Galileo concession winner.

“We are being asked to resolve a problem that is not ours,” Dordain said. “We are trying to help out. But now the delays are reaching a point where the program could suffer.”

Dordain said ESA government representatives will meet again in late August to attempt to find the needed funding. He said ESA’s contract-approval board, called the Industrial Policy Committee, meets Sept. 28 and that this date is crucial.

“We will have problems if there is no approval by Sept. 28,” Dordain said. “It will be terra incognita for Galileo. What is certain is that I can be just as stubborn as anyone else, and industry will not get one more euro until the issue is resolved.”

The impasse on this aspect of Galileo has not stopped the Galileo Joint Undertaking from concluding system-cooperation contracts with China. Three contracts with Chinese organizations were signed on July 28 in Beijing.

The contracts’ total value is estimated at less than 20 million euros. While it was the Brussels-based Galileo Joint Undertaking that signed the deals, it will be Chinese money that will be spent.

China has agreed to spend 200 million euros on Galileo. Five million was paid in cash to the Galileo Joint Undertaking to give China an equity stake in the program. Another 65 million euros will be spent on work in China on Galileo development work.

The remaining 130 million euros will be China’s investment in Galileo’s deployment phase, to be managed by the industrial concession.