The members of the concessionaire for the Galileo program, the Galileo Operating Co., reached an agreement on the location of the various facilities that will be involved in the operation of Europe’s satellite navigation system, a necessary step for the program to move forward.
“This was very important because this agreement was necessary to continue our negotiations with the merged consortium,” said Hans Peter Marchlewski, general counselor for the Galileo Joint Undertaking (GJU), the organization formed to award the Galileo concession. “It was also necessary because the member states needed this agreement in order to reach a consensus on the additional $200 million euros ($235.9 million) which is necessary for the development phase of the program.”
The five main countries behind Galileo — France, Germany, Italy, England and Spain — have been trying to hammer out an agreement on splitting up the facilities since the summer, Jean-Claude Dardelet, project director of the Galileo concession at Alcatel, told Satellite News. “As you can imagine, there are a number of national governmental ambitions behind all these decisions. We are all an advocate of our respective national ambitions,” he said.
The European Space Agency (ESA) recently budgeted 950 million euros ($1.1 billion) for the first four satellites of the constellation, which are scheduled to be launched in 2008, Dardelet noted. “It is important we showed progress on the concession level because the big contract between ESA and Galileo Industries [for the first four satellites] is near being signed,” he said.
“The step [the concessionaire] took in allocating facilities is major not only for advancing with the project but also for giving the industry confidence in the overall project,” Benoit Denis, satellite industry analyst with Frost & Sullivan said.
What is left now is coming to terms on the concession that will be awarded to the merged consortium, Marchlewski said. The GJU approved a joint bid June 27 from the members of the Eurely and iNavSat consortia to develop Galileo. The founding members of Eurely and iNavSat – AENA, Alcatel, EADS, Finmeccanica, Hispasat, Inmarsat and Thales – agreed to combine their bids into a single offering June 17 after the GJU failed to meets its March deadline for selecting a winner.
Germany To Host Operations Center
Under the facilities agreement, each of the five host nations will play a role in the operations of the Galileo system, with the key agreement placing the constellation’s main control center in Germany. The site will manage both the command and control of the spacecraft and the processing of the navigation data.
Germany also hosts the headquarters of Galileo Industries, which is the favorite to capture the contracts for all the satellites and ground infrastructure that will support the program. The company built the two Galileo test satellites, the first of which is scheduled to launch before the end of 2005 and the second in early 2006.
The backup control center has been awarded to Italy, while the concessionaire headquarters, which will be in charge of financial, legal, system engineering, business development, marketing, system interoperability with GPS and other satellite navigation systems and performance management activities, will be located in Toulouse, France. The United Kingdom will host the operation company, under a contract awarded to Inmarsat. The Galileo Operations Co. will be responsible for Galileo and EGNOS global network operations, including performance monitoring and operations security.
Spain will host facilities that will provide redundancy for the control centers and safety critical applications.
“The selected distribution between Germany and France comes as no surprise and consolidates the ESA’s strategy to unify the European space industrials after bringing them under a common consortium for the production of the satellite constellation,” Denis said. “Germany is the main contributor to the Galileo project, and therefore, had the possibility to block any geographic allocation. Toulouse has become Europe’s number one space pole and hosts industrials representing vertical markets for the Galileo project, such as the aeronautic industry. The consensus reached is sound for a prosperous future for Galileo.”
A Clear Road Ahead?
The facilities agreement appears to be the last major obstacle leading up to the formal awarding of the concession to the merged consortium.
“I don’t see any big problems,” Marchlewski said. “We started negotiations in June, but they were frozen [pending the outcome of this agreement]. Now we have [restarted] the negotiations and our plan is to finalize the major points, including the business and financial plan by the end of the first quarter 2006.”
However, Dardelet was a bit more cautious with his assessment on potential future obstacles, as more hurdles could rise given the very nature of the program.
“These negotiations deal with the European Commission, which has never owned any infrastructure so far,” Dardelet said. “So more or less, we are signing with a customer that has no experience with such a program. It will be the first time the European Commission will own an asset. We are learning together with the commission and concessionaire on something that has never been done before.”
Denis added that Galileo’s business plan “will need to be refined in order to prepare the market for its services. There is still uncertainty from vertical industries as to what will be the prices associated to some of the Galileo services. Galileo most importantly needs to start now to work with vertical markets industrials to develop key applications for the service.”
–Gregory Twachtman
