Re-profiling the European global navigation satellite system (GNSS) programmes

This communication is published in response to questions posed by the Council and the European Parliament on the progress of the Galileo and EGNOS programmes. The text relates in particular to the cost of infrastructures and the necessary reorganisation of the system deployment phase, following the breakdown of concession contract negotiations in 2007.

ACT

Communication from the Commission to the European Parliament and the Council - Progressing 'Galileo': re-profiling the European GNSS programmes [COM(2007) 534 final - Not published in the Official Journal].

SUMMARY

The breakdown of concession contract negotiations with the private consortium prevented the introduction of the European GNSS by the date originally scheduled. However, in its meeting of 21 and 22 June 2007, the European Council restated its interest in Galileo as a vital project for the European Union (EU). The Council then asked the Commission to submit new analyses and proposals.

The Commission argues that the EU must take certain decisions on the European GNSS, or otherwise face long-term dependency on foreign system signals. Galileo also offers many macro-economic opportunities for European industry and companies in the service sector.

System infrastructure costs

The Commission estimates that system infrastructure costs will come to 3.4 billion for the period 2007-13.

It underlines that this estimate is based on contracts being awarded imminently, which in turn depends on a political decision being taken before the end of 2007. Also, the choices made when the contracts are awarded are likely to have a significant impact on the final costs.

Risk management

The Commission does not consider it necessary to provide for specific budgetary measures at this stage. In its view, all the risks identified are proportional to the scope of the GNSS programmes. It therefore undertakes to use an integrated approach to risk management at all levels and phases of the programme.

Economic impact and operating revenue

The communication highlights the importance of the role that satellite navigation will play in the lives of European citizens. The satellite navigation market is growing rapidly, and the GNSS market segment is expected to become a driver for the European economy after 2010. It is anticipated that 10 million GNSS receivers will be sold in the EU in 2007, and around 230 million in 2011. The revenue that Galileo will generate is considerable and highly diversified.

Funding of European GNSS programmes

The scenario proposed by the Commission therefore requires total funding of 3.4 billion over the period 2007-13. The amount set aside in the Community financial framework for the same period is 1 billion. The Commission therefore wishes to examine other possibilities:

• Community funding, in which case the multiannual financial framework would have to be reviewed;
• intergovernmental funding, which could take various forms (the Commission has submitted, along with this communication, a proposal for a decision on revision of the multiannual framework aimed at bringing in the public funding required).

The Commission therefore proposes the following measures:

• strengthening the remit of the GNSS supervisory authority by giving it a key role in coordination and preparation of European GNSS markets;
• setting up a European GNSS programme committee;
• entrusting the role of programme manager and supervisor to the Commission;
• entrusting the role of "prime contractor" to the European Space Agency;
• regular transparent reporting to the Council and the European Parliament.

The agreement reached by the European Parliament and the Council on 23 November 2007 on the subject of funding, followed by the conclusions adopted by the Transport Council on 30 November 2007, largely validate the Commission's proposals.

Schedule

The Commission estimates that the FOC (full operating capacity) of the GNSS programmes could be reached by mid-2013, if a positive decision is made by the end of 2007.

Last updated: 06.12.2007