ESA Budget-cutting Plan Targets Operating Costs

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BRUSSELS — The European Space Agency (ESA) plans to reduce its internal operating costs by 25 percent in the next five years as its way of adapting to the economic crisis buffeting Europe, ESA Director General Jean-Jacques Dordain said Nov. 8.

Addressing a conference on space policy at the European Parliament here, Dordain said the agency understands it cannot ignore the economic tumult that is forcing most of its member governments to reduce their budgets.

Including funding it receives from the commission of the 27-nation European Union and other organizations for which it performs work, ESA’s 2011 budget is about 4 billion euros ($5.6 billion).

The agency estimates that internal costs — what it spends on science, Earth observation, space station and other programs — amounted to about 685 million euros in 2010.

An ESA official said the goal set by Dordain is to find 170 million euros in savings by 2015. The official said the savings are expected to come not only from cutting certain functions from the budget, but also from finding new, more efficient ways of dealing with ESA’s counterparties, the industrial contractors.

The official said one problem the agency is having in cutting its costs is that there is no other organization in the world that has ESA’s structure and performs equivalent work.

ESA is an intergovernmental organization bound by the same rules that apply to similar organizations such as those affiliated with the United Nations. But unlike similarly organized bodies, ESA is a research and development organization that produces hardware.

Simply put, it has been difficult for ESA to determine whether its current internal costs are higher or lower than those at other organizations doing similar work.

“One reason this exercise is very hard is that it is difficult to benchmark,” the ESA official said. “It is not easy to compare our internal costs with those of another organization. Our director general has set us a very tough challenge.”