European Governments Trim Galileo System Cost Overruns

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LE BOURGET, France —  European governments announced June 22 that they have been able to trim the huge cost overruns in Europe’s Galileo satellite navigation program and said the belt-tightening demonstration should make it easier to secure additional funds needed to complete the program.

Meeting here at the Paris air show to sign the final two ground segment contracts for the Galileo network, European Commission and European Space Agency (ESA) officials said they are confident enough about Galileo’s progress to order six more satellites following a competition between two consortia likely to be organized late this year.

Officials said the competition — a second Galileo face-off between OHB Technology of Germany and Astrium Satellites of France, Germany and Britain — would be designed to squeeze the bidders to a price of about 40 million euros ($56 million) per satellite for the six-satellite order.

Galileo is designed as a constellation of 30 satellites in medium Earth orbit and an elaborate ground network to provide the same positioning, navigation and timing services as the U.S. GPS, Russian Glonass and Chinese Beidou/Compass systems.

Galileo had been budgeted at 3.4 billion euros, but it became clear more than a year ago that this would be far from enough to complete development. As a result, only 18 Galileo satellites were ordered, and launch vehicles for just 14 of them were put under contract.

In February, the executive commission of the 27-nation European Union, which is financing Galileo, issued a Galileo midterm assessment that said finishing the system would cost an additional 1.9 billion euros. These monies would need to be found in negotiations during the commission’s next multiyear budget cycle, which begins in 2014.

Commission Vice President Antonio Tajani said during a press briefing here that a broad effort at cost containment had concluded that a round of cost-saving efforts had reduced the overrun to 1.4 billion euros. Tajani said the lower figure would make it easier for the commission to argue for the funds needed to complete Galileo.

That effort at cost savings extended to the current Galileo budget. The commission has this 3.4 billion euros at its disposal but must spend it before 2014 or it returns to European Union governments.

The commission and ESA, which is acting as Galileo prime contractor, did not know how much of this money would be left over from the approved Galileo budget until they had negotiated the final two Galileo ground segment work packages.

These two contracts, totaling 354.5 million euros, were announced June 22. Thales Alenia Space will build the Galileo Mission Segment — a global network of sensor stations to monitor Galileo signals and uplink navigation information to the spacecraft — under a contract valued at 281 million euros.

Astrium Satellites will build the Galileo Ground Control Segment, which includes a new facility in Turin, Italy, and the expansion of an existing control center in Oberpfaffenhofen, Germany, under a contract valued at 73.5 million euros.

With the exact cost for this work now known, commission officials said the current Galileo budget has some 250 million euros — the 3.4 billion euro total budget minus existing obligations and ESA program-management fees — available that must be spent before 2014.

Tajani said these funds would be used to order six satellites, with the competition to be held after the planned late-October launch of the first two fully operational Galileo spacecraft.

Tajani suggested that if the launch rate of two Galileo satellites every six months is maintained, it is possible that the six new spacecraft could be in orbit by late 2014, bringing the total to 24 satellites in orbit.

Other government officials were more circumspect, saying that they must still negotiate with the Arianespace consortium of Evry, France, for the launch of future Galileo spacecraft.

The 14 Galileo satellites now under contract for launch will all be lofted by the European version of Russia’s Soyuz rocket, whose inaugural flight will be of two Galileo spacecraft. Six other Soyuz launches are planned.

To back their goal of maintaining two launchers for the Galileo constellation, ESA officials expect to spend 50 million euros — 30 million euros from ESA, 20 million from the commission — to adapt Europe’s heavy-lift Ariane 5 rocket to carry four Galileo satellites at a time.

A contract for this work is expected to be signed late this year.

 

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