Select Committee on Science and Technology Minutes of Evidence


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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