European Governments Fail in Effort To Minimize Duplicate Space Funding

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  Space News Business

European Governments Fail in Effort To Minimize Duplicate Space Funding

By PETER B. de SELDING
Space News Staff Writer
posted: 31 October 2005
01:04 pm ET


An attempt by European governments to reduce duplication of each other’s space investment and maximize the value of stagnant space budgets has failed because no government proved willing to give up its pet projects, according to European government and industry officials.

“The whole idea of a network of centers, each with its own specialty that no one else has — that has disappeared,” said one industry official. “Money is scarce, but it’s still being spent two and three times in Europe on the same thing.”

National governments in France, Germany, Italy, Spain, Sweden and elsewhere continue to fund overlapping space programs and space-technology centers.

The issue was raised repeatedly here during an Oct. 24-25 meeting of government and industry officials to debate a list of technologies proposed by space-industry representative Eurospace for government investment.

Eurospace Director Alain Gaubert said that with government spending in Europe flat, avoiding spending overlaps should be more important than ever. He conceded that the common interest of Europe’s space sector often runs head-on into a single government’s national interest in supporting a struggling industrial base.

David Assemat, deputy director of the Toulouse operations center of the French space agency, CNES, said in a written presentation to the meeting that ESA‘s policy of geographic return — a company wins ESA contracts based on its government’s participation in the ESA program in question — is a drag on efficiency.

Geographic return, Assemat said, needs to be crafted so that it avoids propping up “redundant, useless suppliers … non-competitive suppliers and non-competitive products.”

Assemat said in his presentation that companies that win ESA contracts should be obliged to compete in the commercial market to hone their skills instead of remaining, in effect, wards of the state.

CNES itself has been accused by industry and by other European governments of propping up not only the French space industry — Europe’s biggest and most commercially successful — but its own employment base.

With 2,500 employees, CNES has a substantially larger work force than ESA. CNES routinely seeks and wins contracts for work that is also done by industry — for example, satellite control during launch and early in-orbit operations.

Smaller ESA member governments have long feared that Europe’s big French, German and Italian space hardware companies would win almost all ESA contracts if geographic return rules were not in place. Smaller governments then would drop their support for ESA.

Daniel De Hoop, manager of technology programs at the Dutch space agency, NIVR, said small companies “are always faster and cheaper” than larger companies. “They have lower costs, lower overhead and they can specialize better,” he said.

De Hoop’s defense of small — and especially Dutch — space companies drew an immediate reaction from Gilles Bellaiche, manager of technology coordination at CNES.

Bellaiche said he was concerned that Assemat’s comments on non-competitive companies did not register with those attending the Eurospace meeting.

“Everyone talks about harmonizing our work, but the everyday reality is much different,” Bellaiche said. “Selfishness is the everyday reality. Geographic return rules are necessary but they need to be flexible. Some European companies exist solely on ESA contracts, and they get these contracts only because of the geographic-return policy.”

Bellaiche said every attempt by ESA to modify the contract-award rules has been blocked by national delegations that refuse to accept that their industry may not be competitive.

“This situation produces useless duplication to the detriment of Europe,” Bellaiche said. “Europe needs solid, big prime contractors.”

Bellaiche said the distribution of contracts for Europe’s Galileo satellite navigation system is proving to be no exception.

On Oct. 28, ESA approved a billion-dollar package of Galileo-related contracts that meet ESA’s geographic return criteria. Giuseppe Viriglio, ESA’s director for Galileo, said Dutch Space B.V. of Leiden, The Netherlands, had won the contract to build the Galileo satellites’ solar arrays. Dutch Space is one of several solar-array manufacturers in Europe.

Comments: pdeselding@compuserve.com