European Space Agency Signs Long-contested MTG Contract

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PARIS — The European Space Agency (ESA) on Nov. 18 signed a contract with an industrial consortium to build six next-generation meteorological satellites, providing closure to an episode in European space industry politics that everyone involved — ESA, its partner Eumetsat, and the winning and losing contractors — would just as soon forget.

Valued at 40 million euros ($55 million), the six-month contract — ESA referred to it as an authorization to proceed — will allow the winning consortium of Thales Alenia Space of France and OHB Technology of Germany to begin full design work on the Meteosat Third Generation (MTG) system. MTG is composed of four imaging satellites and two spacecraft carrying infrared and ultraviolet sounding instruments, plus an associated network of ground facilities.

In the coming months, the losing contract bidder, Astrium Satellites of Germany, will be brought into the consortium to perform “a range of complementary functions,” ESA said.

At the completion of this six-month phase, ESA and the MTG consortium will sign the first of a series of follow-on contracts to carry development work through to completion. The total contract value is 1.258 billion euros, with a separate 20 million-euro tranche set aside to cover the additional costs of bringing Astrium Satellites into the core team, according to Peter Edwards, head of ESA’s Earth observation projects department.

Astrium had informally protested the award, saying a German company should be prime contractor instead of France-based Thales Alenia Space, based on Germany’s higher financial contribution to the overall MTG program. Its concerns were adopted by the German Transport Ministry, which is Germany’s representative to Europe’s Eumetsat meteorological satellite organization.


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Until earlier this month, the ministry had refused to confirm its participation in Eumetsat’s financing of the system, a refusal that, in addition to stalling MTG, threatened to undermine ESA’s future ability to decide contract winners without inviting government protests.

The role of the 18-nation ESA is to oversee the satellite production contract. As part of an agreement viewed as necessary to win German government approval, ESA agreed to create more work for Astrium in the MTG project than Astrium would have had otherwise. OHB is also getting a slightly bigger work share as a consequence of Germany’s protests.

Rearranging the industrial consortium to make room for Astrium added between 50 million euros and 60 million euros to the contract’s final cost. Another 20 million euros was added to the initial contract bid’s value following ESA demands that the Thales-OHB team produce more spare components than the team had planned, Edwards said in a Nov. 19 interview.

The first MTG imaging satellite is scheduled for launch in 2017 or 2018, with the first sounder satellite to be launched in 2019.

Patrick Maute, general manager for optical observation and science at Thales Alenia Space, said Nov. 19 that the industrial consortium has preserved the work-share distribution required under ESA’s geographic-return rule, which means each nation’s contribution is matched by contracts for that nation’s industry.

In particular, he said, France and Germany, whose matching 34 percent contributions to the ESA work were reduced to about 31 percent each to account for oversubscriptions for the entire MTG program — a rare but not unprecedented phenomenon at ESA — each has retained its work share.

Maute said one change in the industrial lineup is that OHB will have more system-management work in the construction of the sounder satellites. Thales Alenia Space had been responsible for that work in the original bid.

Maute said that despite the occasionally heated arguments about MTG made by the different protagonists in the past year due to the scale and symbolic importance of the work, the industrial team members are now ready to focus on the technical challenges.

“The schedule is tight, but feasible,” Maute said of the planned delivery of the first spacecraft in late 2017. “I think everyone involved is now cognizant of the fact that this will be the most technologically advanced geostationary-orbit meteorological system in the world, and we have to work as a team to get it done. We expect to have around 80 percent or 90 percent of our full MTG team named, with contracts signed, within a year.”

Edwards said that, for ESA, the months-long debate over work shares and who should be named MTG prime, and the contract modifications necessary to reach the final consensus, “were extremely complicated and time-consuming, a real pain. But the fact is that we have a much stronger industrial team now than we had before. Having OHB build six fairly large satellite platforms, given the other work that company has now, would have been a stretch. Astrium’s presence is a real plus.”

One reason to bring Astrium further into the core system design team is to assure ESA and Eumetsat that Thales Alenia Space’s win of this showcase program will not cause Astrium to do away with the expertise it now has, leading to a monopoly in Europe.

Edwards said that, under a separate contract with ESA, Astrium will be building an image navigation package alongside the nearly identical package being provided by Thales Alenia Space. This is the unit that tells the pixels of the on-board imager where they are relative to a given spot on Earth. It is a technology in which Thales Alenia Space has a lead, Edwards said. With the ESA contract, Astrium will be able to catch up so as to present a credible competitor to Thales Alenia Space the next time such a technology is needed by European governments.