Select Committee on European Scrutiny Thirty-Seventh Report

9 Global navigation satellite system



COM(06) 351

Draft Regulation amending the Statutes of the Galileo Joint Undertaking annexed to Regulation (EC) No 876/2002

Legal baseArticle 171 EC; consultation; QMV
Documents originated29 June 2006
Deposited in Parliament10 July 2006
Basis of considerationEM of 25 July 2006
Previous Committee ReportNone
To be discussed in CouncilProbably December 2006
Committee's assessmentPolitically important
Committee's decisionNot cleared, further information requested


9.1 The 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). There are a number of agreements in place or being negotiated with third countries about co-operation in the Galileo project.

9.2 It is intended that Galileo will allow provision of five services. These are known as the:

  • Open Service (OS), free of charge at the point of use;
  • Commercial Service (CS), offering added value for more demanding uses;
  • Safety of Life Service (SoL), for safety-critical applications that require high integrity;
  • Search and Rescue Service (SAR), to complement the current COSPAS-SARSAT system (International Satellite Search and Rescue System founded by Canada, France, the former USSR and the USA in 1988 and with 33 countries now participating); and
  • Public Regulated Service (PRS), a high-performance, encrypted service for authorised civil government applications.

9.3 The Galileo programme has three phases:

  • the development and validation phase — development of the satellites and the system's ground components, as well as validation in orbit. This phase was due to run from 2003 to 2005, but will now continue until 2009. The project is currently in the validation part of this phase;
  • the deployment phase — building and launching the satellites and the establishment of the entire ground-based component. This phase was initially intended to cover 2006 and 2007 but will now be taken forward between 2009 and 2010; and
  • the commercial operating phase — commencement of the full commercial operation of the system. This phase was due to begin in 2008 and will now begin from the end of 2010.

9.4 It is intended that a public private partnership (PPP) will be established for the Galileo programme. The Galileo Joint Undertaking (GJU) has been responsible for managing the programme's development phase for the Community and the ESA, including the procedure to select the future private-sector concessionaire to run the PPP. It was created for four years, which it was assumed would be sufficient time to see it through until the end of the development phase of the project. In 2004 a GNSS Supervisory Authority (GSA) was established to manage the public interests relating to European satellite radio-navigation programmes — currently EGNOS and Galileo. It is be the formal owner of these two systems and to act as the regulatory authority for the concessionaire during deployment and operation. The GSA is expected to become fully operational in the course of 2006.

9.5 From early in 1999 we and previous Committees have reported to the House on many aspects of the Galileo project, most recently in July 2006.[20] (The matter has also been debated three times in European Standing Committee A, the last occasion being 2 December 2004.)[21] When we last considered Galileo we had before us a document about where matters stood on the project, which amongst other things, proposed that, even though the development phase was not yet complete, the life of the GJU should only be extended to the end of 2006 and that the GSA should take over its functions. This was intended to minimise duplication of structures and costs. We also had before us a draft Regulation to make the necessary amendments to the legislation governing the GSA — we still have this proposal under scrutiny pending a report from the Government of progress in addressing issues relating to intellectual property rights.

The document

9.6 This draft Regulation would complement the draft Regulation on the GSA by extending the life of the GJU until the end of 2006 and providing for its winding up then. Other detailed amendments to the Statutes of the GJU would:

  • enable the GJU to finance additional costs, which have increased from €1.1 billion (about £764 million) to €1.5 billion (about £1.042 billion), arising from the development phase; and
  • replace, in line with a European Court of Auditors recommendation, an erroneous use of the word "capital" in the original Regulation with "contribution" or "funds".

The Government's view

9.7 The Minister of State, Department for Transport (Dr Stephen Ladyman) reminds us that the Government, along with most other Member States, supports a speedy and smooth transition from the GJU to the GSA before the end of the development phase of the project. He adds that the Government agrees that the best way to avoid unnecessary additional costs is to close the GJU by the end of 2006.


9.8 As we said previously, we endorse the intention to minimise the duplication of structures and costs of the GJU and the GSA. But before considering this draft Regulation further we should like an explanation in relation to the increased costs it is suggested that the GJU should be authorised to finance — what is the reason for this budget overrun and does it presage a demand for a greater public expenditure input to the project? Meanwhile we do not clear this document.

20   (27592) 10427/06 (27593) 10431/06: See HC 34-xxxvi (2005-06), para 9 (19 July 2006). Back

21   See Stg Co Deb, European Standing Committee A, 2 December 2004, cols 3-30. Back

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