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Galileo Operator To Be Selected This Month
With the final bids in from the two consortia competing for the contract to deploy and operate Galileo, Europe’s satellite navigation system that will work in tandem with the U.S. GPS system, the Galileo Joint Undertaking (GJU) is now undergoing the final review and is expected to make its decision by Feb. 15 and officially name the preferred contractor on March 1. The GJU is a private company incorporated in Belgium and is managing the development phase of the Galileo project until the in-orbit validation process is completed.
The competition for the contract began with four groups, and after a down-selection process by the GJU and the withdrawal of one bidder, the two consortia left in the bidding process include Eurely (led by Alcatel, Finmeccanica and Hispasat) and iNavSat (lead by Inmarsat, EADS, Thales and SES Global).
And while the selection process on the surface seems as though it has gone through some delays, GJU Director General Rainer Grohe noted that the selection process started “much earlier than it was forseen. It was planned to launch the selection process of the concessionaire at the beginning of 2005, not earlier.” He added the two consortia had submitted their respective bids in September, but evaluation of those bids “showed that some clarification was necessary, that is why we decided to extend the tendering phase of the two bidders.” Eurely publicly acknowledged it submitted its bid on the Jan. 25 deadline and various media reports noted that iNavSat also submitted its bid that day as well.
A $6.5 Billlion Project
The Galileo project as it stands now is expected to run with a budget of about 5 billion euros ($6.5 billion), a slight increase over the original project budget (though it should be noted that during the press conference to announce the merging of the space operations of Alcatel and Finmeccanica, Alcatel Chairman and CEO Serge Tchuruk placed the 7 billion euros, or $9.2 billion).
“We know that we have roughly over 300 million euros ($392.2 million) of additional costs,” Grohe said, noting that it was not necessarily cost overruns driving the increased budget. “Most of these costs can be explained by additional features. And it was decided to order two additional testbed satellites. In the deployment of the constellation, these experimental satellites will not be a part of the operations constellation of 30 spacecraft. We also had additional features for security requirements.”
The two testbed satellites, Grohe said, served specific purposes in the development of the Galileo system. “The launch of the first satellite is crucial for the system,” he said. “We need it to preserve the frequencies allocated to the Galileo system. It has not yet been decided if we should launch the second one as it is, or to redesign it in one way or another.”
Grohe also mentioned that the European Space Agency (ESA) will be reviewing the Galileo project closely to determine the exact cost of the project, adding that the formal contract for the development phase has not yet been signed.
“That is the process ESA is running now and the GJU is closely involved,” Grohe said, adding that about 150 million euros ($195.8 million) has been allocated to early industry work on the development phase. “The coming months will be used to check, screw by screw, all of the costs” to see what can be done to help control costs during the development phase. “The idea is that the real contract will be signed with industry in June.”
One of the parts that could offer some challenges to the system are the spacecraft’s atomic clocks and whether those clocks could withstand the hard radiation environment experienced while in orbit. Grohe noted that an unnamed provider in Switzerland is working to address the problem.
“The risk is that we don’t have the experience of radiation for these clocks,” Grohe said. “Of course, with an ambitious system like Galileo, you have to take some risks. I am confident about their successful development.”
Covering Cost Overruns
But should there be any cost overruns, those fees could fall on the private side of this project, which, unlike the U.S. government-funded GPS system, is two thirds funded by private money.
“The public side will contribute to the deployment phase with one third of the cost, plus some contributions for the starting of the operational phase,” Grohe said. “After the development and in-orbit validation phase, the concessionaire will take over and will be responsible for the control of the costs. This responsibility will be fixed in the concessionaire contract.”
Money for the project also will be coming from international sources, Grohe added. “China will contribute a total of 200 million euros ($261.3 million)” and other countries are on deck to contribute resources to the Galileo project, including Israel and India. “The Galileo system is a global venture. We need worldwide partners for our global system. Asia and particularly China is one of the important markets for the Galileo application.”
In addition, the two bidders submitted financing plans for the second generation of the Galileo system as part of their proposals, Grohe said.
“The technical lifetime of the satellites within the Galileo constellation is in the order of 12 years, which could be extended for three to four years by intelligent solutions,” he said. “Nevertheless, we are requesting both consortia to financial plans for system replenishment and improvement.”
A 2010 Launch Date
When originally conceived, talks centered around launch the Galileo satellite system in 2008, but now the word is this system will be operational in 2010. However, Grohe was quick to dismiss the notion of delays pushing back the scheduled operational start date.
With regard to the schedule, “the word ‘delay’ sounds as if the project is not under control, therefore such a statement is wrong,” Grohe said. “The first schedule of the development phase outlined that we would need 48 months. The most recent proposal from the industry confirms exactly 48 months” will be needed for this phase of the Galileo project. “Be we had a delay in the beginning, so the program started later that it was initially targeted. Nevertheless, we are discussing with the industry and the ESA to see whether we can cut this period of 48 months.”
Theo Pirard, who manages the Space Information Center, contributed this exclusive interview with GJU Director General Rainer Grohe to which this story was based to Satellite News. He can be reached at +32 87 461139.
(Hans Peter Marchlewski, GJU, +32 2 507 80 64)
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