ESA Considers Dissolution of Galileo Industries

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  Space News Business

ESA Considers Dissolution of Galileo Industries

By PETER B. de SELDING
Space News Staff Writer
posted: 26 January 2007
12:00 pm ET



PARIS
The European Space Agency (ESA) has set a March deadline to determine whether it should force the dissolution of the industrial consortium building
Europe
‘s Galileo navigation satellites or take other actions in response to the consortium’s poor performance, ESA Director-General Jean-Jacques Dordain said Jan. 17.

 

Dordain said ESA in 2006 created three separate boards of inquiry to determine why Galileo Industries S.A., a grouping of
Europe
‘s biggest space-hardware manufacturers that was assembled to build Galileo, has been unable to meet its schedule commitments.

 

The company, which is changing its name to European Satellite Navigation Industries, is composed of Alcatel Alenia Space of
France
and
Italy
, Finmeccanica SpA of
Italy
, Astrium GmbH of Germany, Astrium Ltd. of
Britain
, Galileo Sistemas y Servicios of
Spain
and divisions of the Thales Group of
France
.

 

Galileo Industries’ first satellite, called Giove-B, was scheduled for launch in 2005 but has encountered multiple difficulties as its builders disputed work-share allocation and, more recently, following the failure of a component during testing. The satellite is now not expected to be ready for launch before late 2007 and could slip to 2008.

 

A less-expensive – and less-sophisticated – satellite, called Giove-A, was built by a single, small company and was successfully launched in December 2005. Manufactured by Surrey Satellite Technology Ltd. (SSTL), Giove-A’s in-orbit success has permitted
Europe
to secure Galileo’s radio frequencies.

 

The Giove-A and Giove-B satellite manufacturing contracts were signed in July 2003. The SSTL Giove-A contract was valued at 28 million euros. The Galileo Industries contract was valued at 72.3 million euros.

 

When the Giove-A and Giove-B contracts were signed, Galileo Industries team members insisted that the Giove-B satellite would be in orbit well before their smaller competitor finished work on Giove-A. Consortium members have since said that putting big satellite prime contractors, and competitors, together has created competitive stresses that undermined decision-making and, ultimately, work performance.

 

“We have had chain-of-command issues, and we all agree that this has created problems,” said an official with one Galileo Industries member company. “It has been difficult for one company to tell another what to do, since the contractors are also the principal shareholders of Galileo Industries.”

 

At a Jan. 17 press briefing here, Dordain said ESA is concerned that Galileo Industries might still be dysfunctional despite changes in its organization that were made in 2006. Galileo Industries and ESA in early 2006 signed a separate contract, valued at about one billion euros ($1.3 billion), to build four additional Galileo satellites designed to test technologies needed for the 30-satellite Galileo constellation, and to build much of the ground network the Galileo system will use. The first four satellites are scheduled to be launched in 2008 or 2009, but industry officials already are predicting substantial delays.

 

Galileo Industries also is considered the favored bidder to win a contract for the construction of the remaining satellites in the Galileo constellation.

 

“Following the report of the three boards of inquiry, we took necessary action to address both the technical and the organizational problems” at Galileo Industries, Dordain said. “But we are still concerned that the same problems we have seen in the Giove-B situation might recur” in development of the four Galileo validation satellites. “I don’t want to wait for problems to occur before we take action.”

 

ESA officials concede that the same political constraints that forced the creation of Galileo Industries continue to limit the agency’s ability to insist on changes.
Italy
,
Germany
and
Spain
in particular have been adamant about keeping their national industries involved in Galileo in strict proportion to these governments’ financing of the program.

 

Dordain conceded that political pressure to retain industrial shares among companies in
Germany
,
Italy
,
France
,
Britain
and
Spain
might make it difficult to insist on major changes among Galileo contractors. He said ESA would decide in March what to do.