1 Global navigation satellite
system
| (a)
(24831)
12058/03
COM(03) 471
(b)
(25400)
6470/04
COM(04) 112
(c)
(25606)
8926/04
COM(04) 286
|
Draft Regulation on the establishment of structures for the management of the European satellite radionavigation programme
Commission Communication: Progress report on the Galileo research programme as at the beginning of 2004
Draft Council Decision on signing of the Cooperation Agreement on a Civil Global Navigation Satellite System (GNSS) between the European Community and its Member States, and the State of Israel
|
| Legal base | (a) Article 308 EC; consultation; unanimity
(b) —
(c) Articles 133 and 170 EC; —; QMV
|
| Document originated | (b) 18 February 2004
(c) 22 April 2004
|
| Deposited in Parliament | (b) 25 February 2004
(c) 6 May 2004
|
| Department | Transport |
| Basis of consideration | (a) Minister's letter of 25 May 2004
(b) EM of 9 March 2004 and Minister's letters of 8 April and 25 May 2004
(c) EM of 24 May 2004 and Minister's letter of 25 May 2004
|
| Previous Committee Report | (a) HC 63-xxxiii (2002-03), para 10 (15 October 2003)
|
| To be discussed in Council | (a) and (c) 11 June 2004
(b) Not known
|
| Committee's assessment | Politically important
|
| Committee's decision | (a) and (b) For debate in European Standing Committee A
(c) Cleared, but relevant to the debate
|
Background
1.1 The European Community has a two-phase policy for developing
a global navigation satellite system (GNSS). The first phase,
GNSS 1, is the European Geostationary Navigation Overlay System
(EGNOS) programme. The second phase, GNSS 2, is the programme,
named Galileo, to establish a new satellite navigation constellation
with appropriate ground infrastructure. It is based on the presumption
that Europe ought not to rely indefinitely on the GPS (the US
Global Positioning System) and GLONASS (the Russian Global Navigation
Satellite System) systems, augmented by EGNOS. Galileo is being
carried out in conjunction with the European Space Agency (ESA)
under the management of the Galileo Joint Undertaking (JU), which
has been set up for a period of four years.
1.2 The Commission last reported on progress on Galileo
in September 2002.[1]
In June 2003 we reported on a Commission Communication about the
development of EGNOS and its possible integration into the Galileo
programme.[2] In October
2003 we reported on a draft Regulation (document (a)) to create
a public authority to take over management of the Galileo programme
from the JU after its development task is concluded. We did not
clear the document, noting that "there are important issues
to be resolved before this draft Regulation is acceptable."
We added that "we should like to consider it [the draft
Regulation] further now in the light of the outcome of the consultations
the Government is undertaking. Thus we should like to see a report
on the consultations soon after they are concluded."
The new documents
1.3 There has been a long gap between the previous
progress report and document (b), mainly because of delays to
the programme resulting from prolonged negotiations over establishing
the JU. The Communication's title is misleading because it covers
all aspects of the project, not just those related to research.
The report notes that Galileo has three phases:
- development of the satellites
and ground components and validation in orbit. This phase runs
from 2002 to 2005 and is costing €1.1 billion (£0.74
billion). Half of this is being met by the Community and half
by the ESA;
- deployment during 2006 and 2007, involving building
and launching of satellites and setting up the complete ground-based
component, at a cost of €2.1 billion (£1.4 billion),
to be borne mainly by the concessionaire; and
- commercial operation due to begin from 2008.
1.4 The body of the report covers:
- the establishment of the JU;
- continuation of technical studies and research
work, including work on definition, on the basic infrastructure
and on satellite radio-navigation applications. This section
also reports that EGNOS will soon be operational and that work
has started on preparing a European Radio-navigation Plan, which
will relate Galileo to existing navigation systems;
- the outcome of the World Radiocommunication Conference
(June 2003) concerned with the allocation and coordinated use
of frequencies;
- involvement of the new Member States and applicant
countries in the EGNOS and Galileo programmes;
- international cooperation, including the principles
on which it rests, conclusion of an agreement with China, continued
negotiations with Russia, significant progress in negotiations
with the USA and discussions with other countries and regional
groupings;
- progress in selecting a concessionaire, with
four eligible tenders received in December 2003 and discussion
of financing of the deployment and operating phases and of the
services Galileo is to provide; and
- the draft Regulation on the public authority
to manage the deployed system (document (a)).
1.5 The Commission recommends:
- confirmation, without delay,
of the draft legislation for the future management structure of
the programme (document (a)); and
- an irrevocable commitment by the Council in favour
of the programme up to the entry into service of the Galileo system,
allowing the operator to commit to financing two-thirds of the
deployment and operating phases.
1.6 Document (c) results from the view of all Member
States that, in order to maximise the benefits of Galileo, participation
of non-European countries is important. Israel is one of the
eight countries within the world space community demonstrating
significant technological capability on space programmes and important
achievements in GNSS technologies. Its high-tech industries are
very active in the applications and service development sectors
and GNSS technology is used in a variety of civilian applications
such as transportation, environment, geodesy, seismology, agriculture,
engineering, personal outdoor recreation and safety of life systems.
1.7 The Commission, acting under a Council mandate,
has negotiated a draft cooperation agreement with Israel. This
specifies the areas of co-operation, including industrial co-operation
and trade, and also those that are excluded. The latter include
matters covered by export control regulations and any classified
material. The draft provides for reciprocity and mutual information
sharing and for protection of intellectual property rights.
1.8 An important feature will be co-operation in
implementing and building in Israel a ground regional augmentation
system based on the Galileo system. This would provide regional
integrity services additional to those provided by the Galileo
system globally. Another feature would be establishment of a
Regional Integrity Monitoring Station in Israel that would improve
a future EGNOS extension in the eastern Mediterranean region —
important in the future use of EGNOS for civil aviation navigation.
1.9 Member States and ESA member states have been
stressing the need for a strategic view of co-operation agreements
with non-member states on the Galileo programme. ESA has now
produced a document which is due for discussion in the ESA Programme
Board in the near future. Although the draft agreement with Israel
pre-dates that document, it is consistent with it and it is not
expected that there will be any problem with its acceptance.
The Government's view
1.10 In a preamble to his letter of 25 May 2004 the
Parliamentary Under-Secretary of State, Department of Transport
(Mr David Jamieson) says that in a fast-moving, multi-faceted
programme such as Galileo it has been difficult to let us have
information that remains up-to-date when we see it. But, whilst
stressing that the situation is changing weekly (and that he will
continue to update us), he writes now because of impending decisions
at the Transport Council next month with a comprehensive account
of where matters stand at the moment.
1.11 In this letter the Minister aims to:
- give an update on the proposals
in document (a);
- clarify further his letter of 8 April 2004 answering
questions we raised during our consideration of the progress report
in document (b);
- add to his Explanatory Memorandum on document
(c); and
- tell us of the prospects for the consideration
of Galileo at the Transport Council.
In the following paragraphs we draw out from the
two Explanatory Memoranda and the two letters the Government's
views (and, where relevant, answers to our questions) on, in turn,
documents (a), (b) and (c) and the general situation on Galileo.
1.12 On document (a) the Minister says of consultations:
"Our consultations with other Government Departments
… are continuing on a regular basis and we have developed
effective links with most of the relevant people. This has been
particularly useful in dealing with issues such as the negotiations
between the EU and the United States where we have been the recipient
of lobbying from the US and from other EU member states. Thanks
to the efforts of the Cabinet Office and the Foreign and Commonwealth
Office we have been able to present a united UK front and our
influence in the programme has improved as a result. It is also
our intention to build on our present arrangements to look further
into the future to the time when the Galileo system will be fully
operational and we will need to ensure that the UK benefits fully
from the development of applications that make use of the technology
in which we are investing. Therefore we want to work with all
the appropriate people, in the Department of Trade and Industry
and British National Space Centre, and in other departments and
agencies, to ensure that we in government and UK industry both
maximise the opportunities that will arise.
"In order to achieve the best possible outcome
for UK business we and the British National Space Centre (BNSC)
have arranged meetings in response to specific developments in
the programme with representatives of the industries that are
already involved in the Galileo programme in the UK and, increasingly,
with those that might potentially be involved in future developments
of applications that use the new technology. We also liaise with
industry through regular meetings of the BNSC's Telecommunications
and Navigation Advisory Board and by attending the UK Industry
Space Committee's Satellite Navigation Sub-Committee. The latter
body has co-ordinated a UK industry consensus on key documents,
including the draft Regulation on structures for the Galileo programme,
and these views have proved useful in presenting the UK position
at Council Working Groups during their discussions on the draft.
These consultations are continuing."
1.13 Also in relation to document (a) the Minister
reminds us of the key policy aims the Government had in October
2003 when we first considered this document and follows each with
a comment:
- "to ensure that full recognition
is given to those bodies, public and private, that have so far
invested in the programme, and the ownership of the assets of
the system; at present we consider that the document does not
take this into account" — comment: "Safeguards
have been built into the draft Regulation — it may yet be
possible for this text to be changed so we will maintain vigilance."
- "to achieve value for money for the public
sector by negotiating, between the public and private sectors,
appropriate risk including funding and whole life costs, ownership
and use of assets, and system performance so as to encourage innovation
and the optimisation of benefits of the development and operation
of the system to the public sector" — comment: "Extensive
discussions have taken place between the Department and the Galileo
Joint Undertaking with the aim of maximising the benefit of the
proposed Public Private Partnership. This is continuing and we
hope to influence the process as far as possible without compromising
the GJU's independence and objectivity. At present the financial
arrangements for the PPP are under development by the three selected
consortia. They will not be released by the GJU until at least
the autumn when the consortia have submitted their bids and member
states will need to start to form a decision on their respective
merits in preparation for a decision at the December 2004 Transport
Council. We are however pressing for this process to be as open
as possible consistent with the need to respect the commercial
confidentiality of the respective bids."
- "to seek to gain benefit for the UK industrially
and as a user through, for example, industrial contracts in the
present development and later phases, the location of ground control
infrastructure and the Authority and/or Concessionaire and the
development of value for money services for users" —
comment: "This is an ongoing aim, UK companies are prominent
in two of the three consortia bidding for the PPP and in the construction
of the first two test satellites that are due to be launched in
2005."
- "to ensure that EU Member States have appropriate
political control over the Authority and the Centre for Security
and Safety, for example, in respect of national security, the
security and use of the system, particularly in times of crisis,
and membership of the Authority" — comment: "This
is being addressed in the context of the proposed Joint Action[3]
and satisfactory progress has been made."
- "to ensure adequate security measures are
put in place whilst minimising any pressures for quasi-military
use or control of the civil system" — comment: "The
draft Regulation now clearly specifies the security measures and
responsibilities."
1.14 On document (b) the Minister says in his Explanatory
Memorandum of 9 March 2004 that:
- the Government is working with
the JU to supplement its limited expertise in major public-private
partnership (PPP) projects and to ensure the best value for money
from the bidding process for the operating contract;
- there is prominent UK participation in two of
the three bidding consortia;
- document (a) on management structures has been
discussed extensively in Council Working Groups and a satisfactory
draft Regulation is close to being agreed;
- all Member States want quick agreement so that
the process of bidding is conducted in the knowledge of how the
contract will be managed.; and
- the Government has supported the principle of
global co-operation on civil satellite navigation because of the
benefits this could bring to UK industry and users. Future detailed
co-operation agreements will have to be overseen by the Galileo
Special Negotiating Committee, to which all Member States belong,
and be endorsed under the appropriate Pillar of the EU.
1.15 The Minister again sets out Government objectives
saying:
"Key UK policy aims at this stage are:
— to seek to gain benefit for the UK industrially
and as a user through, for example, industrial contracts in the
present development and later phases, the development of value
for money services for users, and establishing the UK as the location
for Galileo control and operational facilities;
— to minimise the Community funds necessary
to support the initial operating phase of the project and to move
as quickly as possible to a position where income exceeds operating
costs and there is no longer a requirement for public money to
underwrite the system — through the establishment of a successful,
effective and efficient Public-Private Partnership;
— to maximise the benefits to UK industry
and users of co-operation with the US, Russia, China, Israel,
India and other non-EU States;
— to maintain a close oversight, taking
into account national, NATO and EU security concerns, on future
negotiations with China and other potential non-EU participants,
including any proposals for China to join the Galileo Joint Undertaking;
— to ensure that non-European countries
do not have any control of the system or access to sensitive technology,
including the Public Regulated Service, should Council be convinced
of the case for having such a service as part of the Galileo project;
and
— to ensure that the frequencies selected
for Galileo do not affect UK, NATO or EU military effectiveness
by overlaying the planned GPS Military code."
The first of these key policy aims is a general one
carried forward through development of the programme. The others
are new or reworked ones relevant to the situation in March 2004.
1.16 In his Explanatory Memorandum of 24 May 2004
the Minister says of document (c):
"The UK Government considers that there are
potential advantages for the Galileo programme and benefits for
UK and European industry in extending formal co-operation between
the EU and Israel. In particular there are advantages for civil
aviation if EGNOS coverage is extended to the eastern Mediterranean
through the establishment of a Regional Integrity Monitoring Centre
in Israel."
1.17 On the basis of his Explanatory Memorandum of
9 March 2004 we asked the Minister in a letter of 17 March to
expand on the Government's view on:
- the outcome of the talks with
the US Government both with regard to the commercial interest
in the relationship between Galileo and GPS and to safeguarding
the US and NATO military interest;
- the possibility of Community attempts to encroach
through Galileo into military matters (in this respect the draft
Regulation about what comes after the Joint Undertaking, document
(a), seeks to establish a Centre for Security and Safety, but
the Explanatory Memorandum of 9 March 2004 suggested this might
be established as a second pillar body);
- the Commission's call for "an irrevocable
commitment … in favour of the programme", and in particular
whether this implies a decision to carry on with the deployment
and operating phases of Galileo before the development and validation
phase is completed; and
- where the Government thinks the Galileo project
now stands and how UK interests are being, and will be, met.
1.18 In relation to negotiations with the US Government
and to military matters the Minister tells us in his letter of
8 April 2004:
"We were very happy with the outcome of the
EU-US talks. The frequencies and signal structures that we agreed
for the Galileo open service and the possible public regulated
service (PRS) will be sufficiently separated from the GPS military
signals so as not to cause any disruption to US, UK and NATO military
capability. In achieving that agreement the United States has
also committed, in its modernisation of GPS, to use the same signal
structure for its open service as Galileo will use. This will
mean that dual-system receivers will be easy and cheap to manufacture
and they will benefit from the increased accuracy that comes from
using more satellites. This in turn will benefit the commercial
applications of Galileo. Galileo will, on its current timetable
(or even if it slips to some extent), be operational well before
GPS is upgraded to a similar standard and even then will offer
commercial advantages through the integrity capability that is
being designed into Galileo from the outset. The draft EU-US
Agreement recognises that some flexibility needs to be maintained
so that Galileo, or the GPS signals, could be changed in the future
to reflect technological or other developments. Consequently
technical criteria are being developed, and will be incorporated
into the Agreement, which specify the parameters within which
either system may operate in future while respecting national
security requirements of both the EU member states and the US.
The Government will continue to ensure during negotiations that
these criteria properly reflect national and NATO security requirements.
"The European Commission does not have any authority
to develop Galileo as a military system. As has been confirmed
by successive Transport Councils, Galileo is a civil project under
civil control. This does not preclude the use by military personnel
of the open access service for basic positioning, and this already
occurs with GPS, but it does mean that the EU cannot develop a
secure equivalent to the GPS Military-Code signal for use in precision
guided weapons."
1.19 In his letter of 25 May 2004 the Minister expands
on this, saying that:
- the Public Regulated Service
(PRS) of Galileo is envisaged as a secure, encrypted positioning
service for use by Member States' governments and their authorised
agencies;
- access to it would be strictly controlled through
the encryption technology and by accountable control of equipment
with encryption algorithms;
- it has been frequently reiterated that the PRS
is intended to be for civil use, by, for example, law-enforcement
agencies, peace-keeping forces and diplomatic protection units.
So organisations making use of the PRS should have to pay the
Galileo concessionaire for the ability to use it — in order
to meet the costs of its provision. If the concessionaire had
to spread those costs across all their Galileo services these
would be unable to compete in a world market;
- use and technical definition of the PRS featured
strongly in the EU-US negotiations. The US side were particularly
concerned that radio frequencies used by the PRS (and other Galileo
services) should not overlap with military signals and with the
need to preserve the capability for US and NATO military commanders
to jam any satellite navigation signals that might be used by
a hostile power without degrading their own military service at
the same time;
- it is therefore fundamental to the agreement
that the PRS and GPS military signals are spectrally separated,
which is achieved in the draft agreement;
- there is still an open issue that relates to
the power level of the transmitted PRS signals but it is expected
that this will be resolved soon;
- the Government fully supports the US and NATO
line on spectrally separated signals;
- the Government holds that the PRS will be much
more expensive than the Commission concedes and that the project
cost is therefore inflated by as much as 30%. It believes that
some of the costs directly attributable to the PRS have been attributed
to the whole project, with their effect on the cost of the PRS
being thus hidden;
- the Commission denies this but the Government,
and other Member States, will seek further clarification before
forming a view on formal support for the PRS;
- the Government view on these costs is not shared
by all in UK industry, which stands to gain from the manufacture
of expensive hardware and software if the PRS is adopted to any
great extent. Some have said that extra cost due to the PRS may
only be 6%. It is still open to argument but the cost of the
PRS is unlikely to be less than about 15%
- the Government has not identified any potential
applications for the PRS and the armed forces are committed to
using the NATO standard GPS equipment. But the UK and NATO armed
forces will not be precluded from using equipment that uses other
Galileo services, such as the basic Open Service for positioning
or the Search and Rescue Service;
- the Government has always suspected that at least
one Member State intends using the PRS as a weapons guidance system
in competition with GPS-guided ordnance — it has been increasingly
open about this although technically the currently specified signal
structure for the PRS, as embodied in the draft EU-US agreement,
would be far from ideal for this;
- the Government is reviewing options relating
to the acceptance of the PRS and is developing a policy over the
summer. It will need to balance the financial arguments against
the political cost of exclusion from part of the programme and
the likelihood that UK industry would not be able to participate
in the potentially lucrative development and manufacture of PRS
equipment;
- the Commission is to publish a paper on the services
to be provided by Galileo in the autumn in preparation for the
Transport Council decision in December 2004.
1.20 On the security aspects of the structures to
follow the JU (document (a)) the Minister says these were wrongly
included in the draft Regulation and are now being dealt with
in a second pillar (Common Foreign and Security Policy) Joint
Action. Of the draft Joint Action he tells us:
"RELEX[4]
has been involved in discussion of the Draft Joint Action 'Establishment
of the definitive Galileo security structures', which, in conjunction
with the Council Regulation [document (a)] which is currently
in development, will establish the structures necessary to protect
the safety and security of the Galileo system. At the 17 March
RELEX meeting the UK secured an amendment to the Draft Joint Action,
which caters specifically for member states' security concerns,
rather than simply those of the European Union as a whole. On
24 March the Joint Action was provisionally closed, but the question
of whether unanimity should apply for decisions to turn off the
system in the time of threat was left unresolved. RELEX have
now returned to the Joint Action in the light of discussion on
the separate Council Regulation in the Transport Working Group.
A draft was approved at their meeting on 19 May subject to a
silence procedure expiring on 25 May."
The Minister adds that the Minister for Europe (Mr
Denis MacShane) will submit an Explanatory Memorandum on the Joint
Action.
1.21 On the question of an irrevocable commitment
to the programme the Minister says:
"The intention of the Commission is that by
the end of 2005 there should be an agreement or contract between
the preferred bidder consortium and the GSA so that the PPP arrangements
for the deployment and operational phases can be put in place
as the development work is taking place. This will allow the
consortium to influence the development of Galileo, particularly
work in preparing how the deployment will take place and the operations
will be carried out and to finalise funding arrangements with
investors before deployment. Clearly if any decision is taken
at the end of this year it must give assurance to the preferred
bidder that the EU is committed to the programme as a PPP so that
the negotiations can succeed. But of course it will not necessarily
imply that the EU will carry on with the deployment and operating
phases regardless, if for example, the PPP negotiations collapse
or the outcome is not acceptable to the Council. If the negotiations
are not successful then the Transport Council will have to reconsider
the future of the programme."
1.22 Finally, in his letter of 24 May 2004 the Minister
gives us a general update on Galileo and the UK interest saying
that:
- the Galileo project is moving
forward rapidly with significant action on a number of fronts;
- the principal driver has been the work on the
PPP for management of the deployment and operational phases of
the programme. This is a key UK objective and the Government
is cautiously optimistic about the work so far. There have been
significant problems within the JU, due in part to the fact that
that body is under-resourced and has only limited funding to buy
in additional expertise. The Government has drawn on its experience
of PPP for major projects for input to the process. This has
generally been well-received by the JU and other Member States
relying on UK advice;
- the Government has continued concern about the
JU aim to select one preferred bidder in time for Transport Council
endorsement in December 2004, although there are signs of a shift
of opinion towards the Government view that the negotiated bidding
process should continue with at least two consortia well into
2005. Nevertheless this uncertainty is not helping the three
consortia still in the running in their negotiations with their
financiers and other advisers;
- negotiations with third countries on cooperation
have been continuing with a number of states. (The Minister apologises
for having previously only made passing reference to negotiating
mandates in relation to India and Israel);
- the agreement between the EU and Israel is now
ready for endorsement at the Transport Council on 11 June 2004
with a view to its signature.
- the Government has been supporting such agreements
in principle because they help to establish the global nature
of Galileo and have the potential of a considerable payback for
UK and European industry. It is, with other Member States, pressing
for a framework strategy on third country relations and this has
been accepted by the Commission and ESA, which have produced a
draft for discussion;
- a significant aspect of the programme has been
the integration of EGNOS into the Galileo management structures
and concession process. Delays in the programme made additional
funding from ESA member states necessary in order to take the
programme to a position where it can be certified for safety-critical
use. The Government has supported this and has agreed to subscribe
an additional £5.4 million to ESA. This is in order to achieve
the benefits for which EGNOS was designed, in particular to facilitate
the switch from ground-based to satellite navigation for, principally,
aviation; and
- the ESA Programme Board meets on 27 May 2004
to review the level of subscriptions from member states and to
decide whether there is sufficient support for the revised programme.
Conclusion
1.23 We are grateful to the Minister for the extensive
information he has given us on this important project and we recognise
the difficulty of giving us a useful snapshot of a complex and
rapidly changing situation. Nevertheless we are uneasy at what
seems to us at times a precipitate decision-making process forced
on the Transport Council.
1.24 Given that, and given also that we have not
yet seen the draft Joint Action concerning the second pillar[5]
security aspects of the future management arrangements for Galileo,
we recommend document (a) for debate in European Standing Committee
A. It is probable that we will make a similar recommendation
when we see the draft Joint Action.
1.25 Turning to document (b), we note what appears
to be a satisfactory outcome on the negotiations with the US Government
and the continued insistence that Galileo is, and will remain,
a civil project. Nevertheless we recommend that this document
also be debated in European Standing Committee A (together with
document (a)), in order to give Members the opportunity to explore
the whole range of Galileo issues including the future management
structures for Galileo, especially the second pillar security
issues, the number of preferred bidders, cooperation with third
countries and costs, particularly their transparency.
1.26 Whilst recognising the importance of cooperation
with third countries we have no questions on the draft agreement
with Israel. We therefore clear document (c), but note that it
is relevant to the debate we have recommended.
1 (23816) 12563/02: see HC 63-ii (2002-03), para 9
(27 November 2002). Back
2
(24372) 7618/03: see HC 63-xxiii (2002-03), para 13 (4 June 2003). Back
3
See paragraph 1.20 below. Back
4
RELEX is a meeting of Foreign Relations Counsellors of Member
States who iron out budgetary and technical detail of negotiations
on Common Foreign and Security Policy (CFSP) instruments (for
example Joint Actions, Common Positions and implementing decisions)
before the decisions are submitted to the Political and Security
Committee or direct to COREPER for political approval prior to
going to the Council of Ministers. RELEX Counsellors ensure effective
co-ordination between CFSP (Pillar II) discussions and those conducted
in other pillars. Back
5
i.e. Common Foreign and Security Policy. Back
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