Select Committee on Science and Technology Written Evidence

Memorandum 75

Submission from the Department for Transport


  The Department for Transport is the Government's lead Department for Galileo—the EC project for a civil Global Navigation Satellite Systems (GNSS). Decisions fall to the Transport Council because GNSS has potential uses in all transport modes, including road pricing and congestion charging, and is therefore funded from a Transport budget. It also has potential for other applications, including precision timing. GNSS is one of the tools capable of helping to deliver improvements to the UK transport system, for example in reducing congestion, improving safety and reducing the impact of transport on the environment, as well as supporting the UK economy.


  1.  The Department for Transport's (DfT) interest in space revolves around the use of Global Navigation Satellite Systems (GNSS) to help deliver improvements to the UK transport system. GNSS based applications have potential benefits across all modes of transport, and are expected to be useful in delivering Departmental objectives, for example in reducing congestion, improving safety and reducing the impact of transport on the environment, as well as supporting the UK economy.

  2.  The Department has the UK Government lead on the development of the EC's global satellite navigation programme,[3] which will deliver to users worldwide a more robust, precise and continuous service than is currently available.


  3.  The European Commission and the European Space Agency (ESA) are partners in developing Galileo. ESA manages the technical development of the project on behalf of the EC. The deployment and operational phase will be an EC funded PPP, owned and managed on behalf of the Community by the GNSS Supervisory Authority (GSA).

  4.  Galileo will provide a highly accurate, guaranteed, global positioning service, under civil control. It has been developed as a civil programme and will be capable of providing a more accurate and reliable service than the two current GNSS systems: the US GPS (Global Positioning Satellite) and the Russian GLONASS—both originally developed for military purposes. Galileo will be independent of but complementary to GPS and GLONASS, while providing full interoperability with existing and future satellite-based navigation systems to deliver a worldwide service.

  5.  Galileo is expected to offer five services: the open service (which, like GPS will be free to users); a commercial service (with service guarantees); a safety of life service (for safety critical services); a search and rescue service; and an encrypted Public Regulated Service (PRS) for secure governmental applications. It will therefore enable a greater range of applications in transport and other sectors including guidance, signalling and timing services, interactive search and rescue, and added value facilities linked to mobile telephones.

  6.  The first, UK built, test satellite was launched in December 2005. A second test satellite is planned for 2007, with the launch of the total constellation of 30 satellites and construction of the ground stations by 2010. The commercial operation would then effectively commence.

  7.  The deployment and operational phase will be taken forward as a PPP (public-private-partnership), which will have exclusive rights to use the infrastructure for 20 years. In return, the organisation will bear at least two-thirds of the infrastructure construction costs. The task of managing the development phase and selection of the concessionaire is the responsibility of the Galileo Joint Undertaking (GJU)—set up by the Commission and ESA. It is currently engaged in negotiations with a consortium of eight European companies. The consortium's overall structure and governance has not yet been settled, but it has been decided to locate the operations company in London. If the negotiations are successful, and the European Parliament and Council approve the proposed financial regulation, the GSA is expected to sign an agreement with the consortium in 2007.

Galileo Programme Expenditure

  8.  Galileo programme costs are shared equally between the EC and ESA. The EC share comes from its transport trans-European Networks (TEN-T) and Research and Development Framework Programme budgets. ESA obtains its funds from contributions from its Member States; the largest contributors are the UK, Italy, Germany and France (roughly equal at around 17%). Under the ESA's "fair return" rules industries of member states receive contracts on a pro-rata basis proportional to the level of national subscription to individual projects. UK contributions are paid through BNSC, which represents the UK in ESA.

  9.  After additional work requested by the Transport Council the total cost of the definition phase increased from €80 million to €133 million. The UK contributed the equivalent of €15.3 million to this phase—(approximately £10.4 million-£4.1 million and £6.3 million from DfT and DTI respectively).

  10.  The total cost of the development programme is now estimated to be €1.5 billion, an increase of €400 million over the original €1.1 billion estimate. ESA and the EC will each provide an additional €200 million to plug the shortfall. The UK's contribution to ESA was originally set at €95.7 million (approximately £65 million-£20 million and £45 million from DfT and DTI respectively), but in August 2006 the Government agreed to a further €31 million (£21.2 million) to maintain the UK's share of the programme against the other major contributors. EU funding will not be agreed until the detailed breakdown EU budget for 2007-13 is decided during 2006.

  11.  The Government, through BNSC, is investing a total of £96.6 million into the programme (including £24.1 million from DfT).

UK Government's Objective

  12.  The UK's priority objectives are to maintain Galileo as a civil system under civil control and to achieve a robust and affordable PPP. Value for money in the PPP concession through open procurement and fair competition is the best means of delivering a successful PPP from which all member states and their industries will have the opportunity to benefit economically.

  13.  The UK Government has some concerns that the estimated costs of the programme have increased and we have been working to increase transparency and ensure more clarity of the emerging contingent risks. Complete details of the full costs of the PPP are unlikely to emerge until the core elements of the concession contract are agreed later this year.

  14.  A Transport Council Resolution of December 2004 made the start of the Galileo deployment and operational phases conditional on the Commission providing a reasoned analysis of the results of the negotiations, the risk allocation and the final costs. We will hold the Commission to that commitment so that member states will have a basis for judging the acceptability of the emerging deal and its impact on the costs and risks to the public sector.

UK Bid for the Galileo Supervisory Authority (GSA)

  15.  The EC GNSS Agency that will be responsible for regulating and overseeing the overall Galileo programme once the GJU has negotiated the contract with the concessionaire is the GSA. The Welsh Assembly Government is leading the UK bid for it to be located in Cardiff. The Netherlands, France, Italy, Spain, the Czech Republic, Slovenia, Malta, Belgium and Greece have also made bids—and others may also bid. The Finnish Presidency is hopeful of facilitating a decision on location by December 2006, but this may be difficult to achieve, given other priorities in the Galileo programme and that some Member States are likely to want more time for lobbying on behalf of their comparatively late bids.

  16.  The Government is pressing for the decision on location of the GSA to be based on the merits of the respective bids and the technical and practical requirements of the Authority, and criteria have been brought forward by the Presidency.


  17.  The European Geostationary Navigation Overlay System (EGNOS)—Europe's first venture into satellite navigation—will improve the integrity of existing satellite navigation systems, by augmenting GPS and GLONASS signals, making them suitable for safety critical applications such as the navigation of aircraft and ships. EGNOS will allow users in Europe to determine their position to within five metres (about 20 metres is possible with GPS). EGNOS is operating well, although some problems remain, and is expected to be certified for safety-critical applications in March 2008. In 2004 DfT agreed to £5.4 million (in 2007-08) to support certification of EGNOS—for aviation use. However, additional funding is required to keep the system fully operational while the certification process is implemented. ESA has asked member states to revise the ARTES 9 Declaration,[4] which funded EGNOS. On 21 September ESA formally opened this for subscription, seeking agreement by 16 November. It hopes for €55 million to cover costs until March 2008, when transfer to the PPP concessionaire should take place following successful certification.

  18.  ESA proposes a UK contribution of €6 million. DfT understands the need to maintain EGNOS until certification and that the investment should lead to efficient deployment of navigation aids. Ministers will consider the basis for an additional UK contribution.

Benefits to UK

  19.  The UK is well placed to benefit from the downstream applications which will be the much the largest proportion of the operational benefits of Galileo. The Commission has estimated the potential market for GNSS products and services (Galileo and GPS combined) could reach €400 billion[5] in the next decade, of which UK industry can expect to capture perhaps as much as €24 billion[6].


Road User Charging

  20.  DfT is investigating the scope for charging for the use of roads, as a mechanism for managing congestion. Although not the primary objective, managing demand is also expected to have knock-on environmental benefits. Different charging regimes have been suggested, but all depend on the ability to identify the time and location of road users/vehicles. A number of technologies could be used to achieve this. However, it is recognised there are many potential benefits to using a GNSS-based system.

  21.  Significant technical issues need to be overcome before a comprehensive GNSS based road charging scheme could be implemented. These include: the need to secure the necessary level of integrity and coverage, particularly in urban areas; and the development of on-board units suitable for deployment and use, at an acceptable cost, applicably to all road vehicles in Great Britain.

  22.  The Department will sponsor a significant research programme addressing these and many other questions related to the effective delivery of time, distance and place charging. Funding of around £10 million has been allocated for these demonstrations, which will probably include the overall process of charging using satellite systems and how users of such systems can be have assurance and trust in the systems' outputs.

Intelligent Transport Systems

  23.  As described in "Intelligent Transport Systems (ITS)—The policy framework for the roads sector"—Nov 2005,[7] the Department has many roles in making best use of ITS to give road users higher quality transport systems and services. These include being a major procurer of ITS technologies and services, including through direct management of the strategic road network, demonstrations and trials; facilitating and encouraging the take-up of proven ITS technologies; and promoting innovation by researching the potential of new ITS technologies.

  24.  ITS, already an important part of our delivery plans for future transport, will help road users travel more safely, on less congested roads, and on better public transport services with improved information services, and bring many economic, environmental and social benefits.

  25.  GNSS is recognised as an important technical solution for a number of applications, however it is just one of a number available, and therefore its suitability needs to be considered on a case by case basis.

Shipping and Ports

  26.  As part of DfT's shipping strategy[8] it will facilitate the use of electronic aids to navigation, complementing traditional aids where necessary, building on the General Lighthouse Authorities' vision statement for 2020. Increasing reliance on GPS has already led to major changes in the provision and operation of navigation aids. Further new navigation systems are now coming on stream, such as Automatic Identification of Ships (AIS), and, by around 2010, Galileo based satellite navigation systems.


  27.  The additional integrity information and accuracy of the Galileo Safety of Life service could provide a complementary source of positioning information for the new European Rail Traffic Management System/European Train Control System (ERTMS/ETCS) cab-based signalling standards for high-speed trains. Satellite navigation systems are also being used to support Selective Door Operation systems, where the train length is greater than the station platform, and support on-train passenger information systems. They have the potential to support energy metering and vehicle positioning monitoring as part of fleet management.


  28.  As described in the Department's White Paper, The Future of Air Transport,[9] there are few areas in which the UK is free to make policy in isolation from other countries. Most new aviation legislation now originates from the European Union. In addition, global standards for aviation, including satellite navigation, are set by the International Civil Aviation Organisation (ICAO).

  29.  ICAO envisages a gradual transition from the current ground-based infrastructure to the increased use of GNSS. The use of GPS is already well established in the field of aviation navigation. Refining and improving satellite navigation through EGNOS and Galileo will provide additional benefits to aircraft in all phases of flight.


  30.  The Department coordinates the UK position through a Galileo Coordination Group which brings together representatives of all interested Whitehall Departments. While DfT has policy lead for Galileo it collaborates closely with other Government Departments to ensure the complementary objectives fit together, eg DTI's aim of enhancing the competitiveness of UK industry with DFT need for applications capable of improving the UK transport system. DfT is an active partner in the British National Space Centre.


  31.  The EC is planning to spend €350 million over seven years on Galileo related research, under its 7th Framework Programme of Research (FP7)[10], [11]; covering:

    —  Exploiting Galileo's full potential.

    —  Providing the tools and creating the environment.

    —  Adapting receivers to the requirements and upgrading core technologies.

    —  Allowing infrastructure evolution.

  32.  DfT will fully participate in the Programme Committee overseeing this element of the Framework Programme. A key objective will be securing greater Member States' involvement in specifying the research. DfT believes that the resources should be devoted to ensuring the success of Galileo, particularly in developing applications users need and want, and which will therefore provide revenues for the PPP. This is a higher priority than technology driven research to improve the system.


  33.  The Select Committee has identified the following issues as being of particular concern.

Impact of Current Levels of Investment on UK International Competitiveness

  34.  The primary aim of DfT funded activity, related to the use of space, is to deliver transport objectives. Nevertheless, DfT supports the Government policy of improving the competitiveness of a healthy UK based industrial base, delivered by BNSC and DTI.

Benefits of Participating in the ESA and Other International Programmes

  35.  The Government continues to work to maintain the priority UK objectives of: achieving a robust and viable PPP; maintaining Galileo as a civil programme under civil control; influencing the development and financial control of the project to ensure a transparent process which delivers a value for money deal for the Community; and ensuring that UK industry, already at the forefront of the development of Galileo, remains well positioned to exploit it in the long-term. Maintaining our position as a major player within the programme and as a member state of the EC and ESA, we are able to influence the development of the project to ensure that the development of Galileo and the necessary expenditure within the EC and ESA are subject to appropriate scrutiny and challenged when required.

  36.  Participation in the research Framework Programmes gives DfT influence over the research funded by the EC supporting the development of Galileo and applications. DfT is seeking stronger oversight in FP7 through the GSA. Tranches of FP6 money were transferred to the GJU where decisions were largely taken internally.

The Commercial Benefits from Innovation and Technology Transfer

  37.  A Location and Timing Knowledge Transfer Network (KTN) is managed by the National Physical Laboratories, building on the successful Pinpoint-Faraday Partnership, the government-backed forum for GNSS innovation. Location and timing technologies span many areas which touch people's lives and it is the KTN's responsibility to put the UK at the forefront of this growing industry. Their aim is to overcome barriers by combining academic excellence, industrial expertise and government support to drive development for the UK in this emerging market. Their role is to:

    —  Provide a network that has access to the entire industry and provide a forum for identifying people with ideas and those that can apply them to the real world.

    —  Help turn ideas into realistic business propositions.

    —  Provide access to individuals who can explain complex technological issues to the layman.

    —  Provide newsletters and advice about funding.

  38.  The KTN, with 700 members, drawn from industry, academia, end users and government, is growing at a rate of 50% per year. The Galileo team in DfT keeps in close touch with the KTN.

Delivery of Public Benefits

  39.  DfT's key objective is to secure public benefit from the development of applications, based on satellite positioning and navigation systems, aimed at realising a more efficient, safer and environmentally friend UK transport system.

Support for Space-Related Research and the UK Skills Base

  40.  DfT supports significant research aimed at investigating the use of GNSS as the basis of possible Road Pricing systems and other ITS applications. Much of this work will carried out by UK organisations.

November 2006




3   Department for Transport Annual Report 2006 (Cm 6817). Back

4   ARTES 9, "Initial Global Navigation Satellite System", ESA/JCB(93)66, 17 November 1993. Back

5   Commission Jacques Barrot's speech on 12 September 2006. Back

6   ESYS report for BNSC "Galileo Awareness and Justification Study", June 2005. Back

7   DfT, Crown Copyright, November 2005, Product code PPU3617/ES. Back

8   The Future of Transport-White Paper published on 20 July 2004. Back

9   The Future of Air Transport-White Paper, published on 16 December 2003. Back

10   Chief Scientific Adviser's Evidence and Research Strategy: June 2006. Back

11   See Back

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