Examination of Witnesses (Questions 540-
559)
MONDAY 19 MARCH 2007
JEAN-JACQUES
DORDAIN AND
PROFESSOR DAVID
SOUTHWOOD
Q540 Adam Afriyie: Does that affect
our relationship with ESA? When we walk into a room at ESA, do
people say, "They are only paying half their share"?
Is that relevant or does it enhance our standing? Do other members
want to listen more carefully to what we might be investing in?
Mr Dordain: It does not hurt a
lot because the most interesting part of ESA is the flexibility.
There is not one programme; there are 57 different projects, all
on an optional basis meaning that where you are not contributing
you have no voice and you have to be silent. Where you are contributing
you have a voice. That flexibility is a fantastic asset for ESA
because we do not need the support of all Member States to do
something.
Q541 Adam Afriyie: Why should the
UK continue to invest in ESA? Why do we not just have our own
unilateral or bilateral programmes? You now have an opportunity
to sell ESA. Why should we not go it alone? Why should we not
join with other states rather than remaining a member of ESA?
Mr Dordain: Other states of Europe?
Q542 Chairman: Why not the United
States or India or China or Russia or Brazil?
Mr Dordain: You can certainly
do that. Nothing prevents you.
Q543 Chairman: What do we gain?
Mr Dordain: What you gain is that
you are a member of a very flexible network. You could certainly
make the best compromise between the common interest of the club
and your national interest. The flexibility of ESA is a fantastic
asset because in this type of organisation we can make the best
compromise between the common and the national interest. Since
we are using national money, we have to keep the national interest.
You can also get the common interest.
Professor Southwood: I am not
disagreeing with what my director general said but there is a
little bit of patriotism inside me which says that you should
be very careful about regarding space as just something you take
off the shelf. It is a strategic issue. The UK's economic future
is aligned with Europe. That is the change of the last 50 years.
Surely we could go with the United States but we would be the
junior partner. In Europe it is clear you are not a junior partner.
You are one of the more senior partners. You should not regard
space as just a commodity that you buy. It is something with potentially
strategic importance, particularly in the environment, in navigation
and the applications that feed through from the kinds of things
we do in the agency. If you will forgive me switching for a minute
from being European to being British, there is a very strong reason
that you should put a lot of value on the European connection.
It is a strategic interest for the country and I do not think
we are going to align clearly with China or India in terms of
our global interests. It is not that we are going to go to war
with them or anything but our interests do not align.
Chairman: It is important for us to pose
that question.
Q544 Dr Spink: I want to examine
briefly the Global Monitoring for Environment and Security, GMES.
You said earlier that you expected a bit more from the UK for
that programme. We currently give £2.73 million over three
years direct to ESA through the various bodies. We also give through
the EC at GDP level a rather larger sum. How much more do you
want? How much more do you think would be appropriate?
Mr Dordain: It is not for me to
decide which type of percentage the UK should put in. You are
in the leading role in earth science. You have taken the knowledge
about the earth and the atmosphere as a very serious problem and
it is. You have been consistent by putting a significant share
into earth science, just as do France, Germany and Italy. When
it comes to the application part, which is taking the benefit
of scientific progress to deliver services for environmental security,
you are not there at the level of Germany, Italy and France. This
is the problem. It is just a matter of consistency between the
importance that you are allocating to improving the knowledge
of the earth and the atmosphere and much less interest so far
in the application side of the services delivered to citizens.
GMES is not a space programme. It is a programme for delivering
services. Space is just one of the complementary sources which
provides data to these services.
Q545 Dr Spink: One of the very positive
elements of Tony Blair's legacy will be his leadership in climate
change and earth sciences through Gleneagles and the other initiatives
that he has led. Why do you think he has not followed it through
into the application side? Do you think it is just a lack of understanding
or do you think it is because Defra are the lead organisation
and Defra just do not have the understanding, competence, confidence
and expertise to push forward in this area? This is clearly a
trick we are missing.
Professor Southwood: Local knowledge
helps. It is hard to avoid the feeling that there is a lack of
confidence in Defra in understanding that, if we are going to
manage the planet better, we collectively in Europe—and
we have our part to play—in this century, have to have global
information and that has to come from space. We do it already
with EUMETSAT. We develop all the technology for EUMETSAT and
nobody thinks twice about using information from space in weather
forecasting. It has improved our weather forecasting enormously.
We knew it was going to snow this weekend, for example. That came
from looking in the Atlantic and seeing what was coming our way.
We can do much better than this in many other ways, using space
information, using the science we have already done. In a sense,
when I look at the approaches of organisations like Defra, there
is a tendency to somehow assume that the information will be there
but there should be an active role in making sure the information
is there and making sure that it is information that we have an
independent level of control in. That is what concerns me. I think
there is a failure there.
Q546 Dr Spink: When do you think
an opportunity will arise for the UK government and Defra to readdress
its investment in GMES?
Mr Dordain: Any time. When a participating
state wants to change its contribution and increase it—it
is forbidden to decrease it—it can do that any time providing
the other participating states agree. There are in my view two
opportunities coming. One is in the summer of this year when the
participating states have to confirm or change their contribution
to the first part of the ESA GMES programme. The second opportunity
will be at the end of next year when we shall have a council at
ministerial level which will look at segment two of GMES. Today
we are just developing the first hardware and then we shall have
to produce the hardware to sustain the services. The decision
will be taken next year. This is what we have in our calendar.
To complete what David said, the key point is that with GMES we
are not starting from scratch. We have the scientific satellites
which are already delivering data. We have demonstrated that these
scientific data are very important for a lot of different agencies.
Three weeks ago I signed an agreement with the European Maritime
Safety Agency and we are using our Envisat already, which is a
scientific satellite, for delivering relevant data. The question
with GMES is to make these services not scientific any more but
operational and sustainable services, because you cannot attract
an agency like the European Maritime Safety Agency and say, "We
will deliver the data for one or two years and after that you
will not get the data any more". This would not be helpful
for this type of agency. The relevant data must come from satellites,
from space. There is no other source of data.
Q547 Dr Spink: The UK, with only
a 5% share of the programme, has been mean minded with its contribution
through ESA; whereas through the EC at GDP level contribution
it has been more generous. Do you think there is a problem with
these two levels of subscription, bearing in mind especially that
the EC subscription route does not give us any access to contracts
for industrial provision?
Mr Dordain: You are pessimistic
about the competitiveness of your industry. They can get contracts
on competition. It is true that there is not the principle of
return associated to EC money. I would like to spend two minutes
on the relationship between ESA and the EU. I would not like to
give the impression that the relationship between ESA and the
European Union is just to get money. This would be a mistake.
First of all, the money available in the European Commission today
for space is very limited. The budget of ESA is three billion
euros per year. The maximum budget that the Commission can put
in space is 250 million per year. The interesting part, working
with the European Community, is not the money. The money is always
welcome but it is not the most important part. The relationship
between ESA and the EU is the relationship between the space sector
and the users of European policies. This is exactly Galileo. The
Galileo satellites are responding to a transport programme. Galileo
is not a space programme. Galileo is a transport policy where
satellites are useful. GMES is not a space programme. It is services
for environmental security to be delivered to citizens where space
has a role to play. The relationship between ESA and the EU is
to make a connection between the space sector and the European
policies, not space policies. The least I am expecting from the
EU is the space policy and I am expecting much more on their ability/capacity
to define transport policy, environmental policy, security policy,
regional policy, all policies where space can play a role. This,
for me, is the most important part of the relationship between
ESA and the EU. After that, if they put some money in, they are
more than welcome but we shall not change drastically the budget
of space in Europe from the money of the European Commission.
The Member States who are expecting that the Commission can bring
the budget solution unfortunately provide no solution. The money
will still come largely from Member States rather than from the
European Commission. The European Commission will not replace
the lack of support of one or two Member States.
Q548 Chairman: David, you talked
critically about Defra and its involvement with GMES. You were
not overly critical but you recognised the shortcomings. What
could Defra do to up their performance in terms of being much
more proactive?
Professor Southwood: I said a
confidence deficit which is two sided. It is not just Defra. As
I understand it—I have looked, for instance, at a lot of
the evidence that you have been given and so on—it is also
a failure on our part and also particularly on the Commission's
part to persuade Defra that really what we are talking about is
what they want. It will provide the means. I see a confidence
deficit on the part of Defra, but you have to recognise that if
somebody does not have any confidence in you there is a deficit
on the other side. I am grateful that you pulled that point out
because I am not totally against Defra. There has been a failure
of communication or a failure to understand what we believe is
the long term commitment here.
Q549 Chris Mole: Turning to Galileo,
our colleagues in the transport select committee have been told
that Galileo may not be ready until 2010. The Commission sticks
to an insistence that it will be available in 2008. We have a
civil servant telling us that, in reality, it will be 2011. What
are the challenges in Galileo? When do you think it will be ready?
Mr Dordain: I am sure they are
not talking of the same Galileo. Speaking of 2008, never ever
was it said that the operational services of Galileo would be
available in 2008. It depends on what Galileo we are speaking
about. Is it the in orbit validation that ESA is in charge of?
Is it the deployment of the constellation? Is it the operations
and services? These are three different matters. The decision
makers decided to make Galileo in several phases. This is just
a fact of life. There is an in orbit validation funded 100% by
public money to reduce the risk for private investors. They have
decided to put that under ESA responsibility and to put the four
satellites in orbit at the end of 2008 just to demonstrate to
private investors that the system can work. Then there is the
so-called Galileo concessionaire who should be in charge of investing
and deploying the constellation, the 26 satellites beyond the
first ones. The same concessionaire would be in charge of exploiting
the Galileo constellation to deliver services. I am not in the
concessionaire's shoes but I assume that they can start to deliver
operational services without waiting for the 30 satellites to
be in orbit. This is the reason why, depending on whether you
are speaking of the in orbit validation, the constellation completely
in orbit, or, if you are speaking of operational services, the
dates can be different. Galileo has been designed from the very
beginning as a private public partnership. The public sector was
there to reduce the risk for private investors to make the in
orbit validation and then transferring to the private investors
the responsibility of deploying and operating the constellation,
delivering services. This works pretty well, with two conditions.
ESA is developing the in orbit validation. We need the concessionaire
in front of us for two very important reasons. Firstly, we need
to know from the concessionaire on which requirements they will
make money because we are not building something just to make
satellites but to fulfil requirements, especially requirements
on which the concessionaire can make money. Number two, we need
the concessionaire in front of us to put some pressure on the
calendar because they would like to make money as soon as possible.
It is a virtuous system provided the concessionaire is there.
This is the problem today. We are developing the in orbit validation
and the concessionaire is not yet there. The rest is details but
in the logic there is something missing today.
Q550 Chris Mole: When will the concessionaire
be in place?
Mr Dordain: That is not my responsibility.
It is the negotiation between the Galileo supervisory authority
and the concessionaire. They are discussing it. As the director
general of ESA, I am ready to help and to do anything to have
the concessionaire as soon as possible because I miss the concessionaire.
Q551 Chris Mole: Why do we need an
independent European capability in satellite navigation?
Mr Dordain: I am certainly not
the best suited to answer this type of question because Galileo
is not a space programme. ESA has not created Galileo. It is a
European transport policy which has created Galileo. ESA is just
providing a part of the solution but not the problem. The problem
is a result of European transport policy. As far as I have understood
from the European Commission, they have arrived at the conclusion
that, to have an efficient European transport policy, there was
a need for a European constellation called Galileo. This was the
only way to make sure that there was full reliability of a navigation
system over Europe. Relying upon a US military system was not
the most reliable way to have a European transport policy, reliable
any time, whatever situation in the world was there. It was the
first reason. The second reason was to make sure that the European
service industry could have access to all the services which you
can associate with a satellite navigation system. The third reason
is to have a system where Galileo is interesting not only for
Europe, in my view, it is interesting for the world. To rely upon
one system only in the world could be risky. To have a second,
independent system is always much better. I have never considered
Galileo as a competitor to GPS but more as a parallel system to
GPS, making sure that the navigation requirements will be fulfilled
at any time, in any circumstance. On the day when all air traffic
is relying upon a satellite navigation system, you had better
have a reliable system. Galileo is not a space programme. It is
not an ESA programme. ESA is just developing satellites to respond
to a European transport policy. For me, this is very important
because this is the heart of the relationship between ESA and
the EU.
Q552 Chris Mole: Do you have a view
on the management of the costs which have gone up from 1.1 billion
euros to 1.5 billion euros?
Mr Dordain: Yes. We know what
is a space development programme and we know what it means to
control the industry and the costs. Unfortunately, you cannot
control the costs if you cannot control the calendar. It is not
so easy to control the calendar of just one piece of the Galileo
programme because the in orbit validation is just the first slice
of the overall system. The following slices are not yet defined
or not yet consolidated. It is very difficult to control the first
slice.
Q553 Chris Mole: You expect it to
increase further?
Mr Dordain: No. There was an increase,
the 400 million that you were referring to. If we have a concessionaire
in the next few months, I can control the situation. What I cannot
control is the situation where there is no concessionaire. As
I have just said, when there is a vacuum behind the in orbit validation,
the industry is like nature. They will always fill the vacuum.
It is very difficult to control something which is just a first
phase where there is nothing behind it. I am more than ready to
control the industry. We know how to control industry in ESA.
What I cannot control is a system which is open ended.
Q554 Chris Mole: We have picked up
on some concerns that there may be pressure within ESA Member
States to extend Galileo. Is this something you are aware of?
Mr Dordain: I am just developing
satellites according to the requirements that I am given. This
is not to wash my hands or to avoid answering. I am more than
ready to answer any question but I am not in charge of the requirements.
Q555 Chris Mole: It is a question
for the Commission?
Mr Dordain: I have what is called
a mission requirement document, which is the bible, and we are
designing satellites according to the mission requirement document.
Q556 Chairman: Who uses them is another
issue?
Mr Dordain: Yes. Who will use
them is not my business.
Q557 Chris Mole: You touched on the
need to have a second system because we do not want to rely on
the American system. How do you view competition from a possible
Chinese satellite navigation system?
Mr Dordain: This is certainly
a problem. In terms of competition, it is very difficult to compete
against China. I have no problem competing against the United
States. We are using the same economic standards. Vis a vis the
United States, I am convinced that Europe is competitive compared
to the United States. When it comes to competing with China, it
is much more difficult. Our only chance to be competitive with
China is to be better in terms of technology. Using the current
technology, China will be more competitive than any other space
power in the world.
Q558 Chris Mole: We could have 26
satellites that nobody wants to use because the Chinese ones are
cheaper. Is that right?
Mr Dordain: It is a joke. If I
was a private investor, I would buy 26 Chinese satellites rather
than European satellites because I am sure that they would be
cheaper. Now I am not so sure that they will fulfil the requirements.
We have the mission requirement document in Europe. We build and
design satellites in Europe according to these requirements. What
I do not know is if the Chinese satellites are able to fulfil
the requirements. They will be cheaper for sure. We cannot make
satellites cheaper than the Chinese with equal technology. What
we can do is to make better satellites to fulfil more performance
requirements. I am sure of that.
Q559 Adam Afriyie: Can we come on
to the concept of investment and return on investment? We have
this wonderful concept of juste retour whereby a Member
State of ESA gets a return between 84 and 94% of the money that
is paid over in membership fees. It seems that the UK has been
falling short and it is absolutely outrageous. Where are our 78
million euros?
Mr Dordain: First of all, what
is true today was not true five years ago. Today, the UK is under-returned.
In the previous period, when we were accounting the return, you
were over-returned a lot. The question is why was the UK over-returned
five years ago and why is it under-returned now? Secondly, I should
have come with an ESA convention but maybe I have one in my bag
and I shall give you one, as a gift. I am always told, especially
in Brussels, that the industrial policy of ESA is just juste
retour, which is completely wrong. The industrial policy objectives
of ESA are defined in Article VII of the ESA Convention. I would
like to state firmly that the industrial policy of ESA has to
fulfil four objectives. Objective number one is cost-efficiency.
Number two is competitiveness of industry. Number three, what
you call juste retour, is equal distribution of activities.
Number four is competitive bidding. Our job is to fulfil the four
objectives of industrial policy altogether, meaning that the equal
distribution of activities is only one of the four objectives,
but unfortunately I am always told that juste retour is
the only objective of industrial policy. This is not true because
we are cost-efficient, we are competitively bidding and we are
supporting the competitiveness of European industry, and at the
same we are making equal distribution. I would just say that I
do not like to give the impression that the only driver in the
industrial policy of ESA is just to distribute the activities
without any competitive bidding, without taking into account competitiveness,
without taking into account cost-efficiency. This is very important.
Why are you under-returned today when you were over-returned five
years ago? I think it is a mixture of reasons, there is not one
reason.
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