Brussels, 22/03/2001 (Agence Europe) - The European Commission got the main European companies in the satellite sector to financially engage themselves in the completion of the second phase of the Galileo project, that is to say the project development phase. Thus, one of the conditions for this phase to be launched, that is to say the participation of the private sector, is satisfied. Ten large companies representing the manufacturers of space systems, equipment manufacturers, service providers and operators in the sector have subscribed to a "memorandum of understanding" including an undertaking for EUR 200 million.
The Commission Vice-President, Loyola de Palacio, welcomed this development and underlined the decisive importance of the memorandum. The industry has understood the significance of the Galileo project, which offers a potential market of EUR 9 billion per year and should generate 14,000 jobs, she stated. By signing the memorandum, industry has shown its desire to see this project rapidly concretised. She also recalled that Galileo will have a considerable impact on the daily life of all citizens.
It now only needs the political decision by the Council for "phase 2" to be launched. During the most recent ministerial deliberations, certain delegations had maintained reservations precisely due to the absence of involvement by the private sector. This obstacle is now lifted, and if reservations remain they will be of a clearly political nature. The Economic/Finance Council should discuss this on Thursday evening in Stockholm and the dossier could be submitted to the European Council, which opens this Friday.
The aim of Galileo is to provide Europe with a satellite radio-navigation system, by freeing it of the dependency on the American GPS system and the Russian Glonass system (the only two presently in existence). Thanks to Galileo, each individual (or ship, or other means of transport) could know its position to the nearest metre, with a small and cheap personal receiver. The American and Russian systems are financed and controlled by military authorities, which results in the fact that military uses are a priority and that during recent conflicts GPS was not fully available for civilian use. Galileo on the other hand, will be operated and controlled by civilian authorities (even if certain military applications remain possible), which guarantees the continuity of signal transmission as well as its quality.
The "definition phase" of the project is being completed, thanks to a Community financing of EUR 80 million. The development phase will extend from 2001 to 2005, with a State financing of EUR 1.1 billion, already jointly programmed in the European Union and European Space Agency budgets. The undertaking made adds EUR 200 million to the credits available. The satellite deployment phases will take place between 2006 and 2007, with a financing of EUR 2.1 billion mainly taken on by the private sector. The operational phase will begin in 2008, with the operation and maintenance costs of EUR 220 million per year.
The private financial engagement should facilitate the initiation of the development phase. Among the participating companies, are Alcatel (France), Telespazio (Italy), AENA (Spain), Thales (France and UK) and consortiums such as ITS. The implementation of the public/private co-financing will take place through the creation of a joint venture (or another similar structure), closely associating the private companies in the project. The signatories of the memorandum will meet in June in order to concretise their engagements according to a timetable. However, in the absence of political decision by then on the launching of this "phase 2", the engagements made by private companies will become obsolete, thus underlining the urgency of the dossier.
If, on the other hand, the political developments are favourable at the end of this week in Stockholm, the Transport Council should adopt on 5 April a "resolution" on the implementation of the new phase and at the same time free a first slice of the EUR 100 million budget. The planned joint venture will be set up in May/June, and on 27 June the Transport Council will be able to define the services provided by Galileo and have an initial debate on the status of the joint venture. The European Parliament will be able to rule in June, and the status will be adopted by the Council in October, allowing for the freeing, in December, of the remaining EUR 450 million from the Community financing, and the joint venture will start-up on 1 January 2002.