Europe is set to make a major decision on satellite navigation in December, but many questions remain unanswered

Emma Kelly/LONDON

On 20/21 December, European Union (EU) transport ministers are expected to give the go-ahead for development of the continent's Galileo global navigation satellite system (GNSS). For a year, industry teams and the European Commission (EC) have been working on definition studies to determine the system's design with financial, legal, operational and international issues.

While technical activities have been progressing well, institutional aspects are proving far more complex and various issues will be unresolved when European transport ministers decide on whether to commit to the development of the c3 billion system ($3.45 billion) in two months' time.

Nevertheless, the commission is confident of a positive decision in December due to the GNSS's importance to Europe. According to Jean Trestour, head of the EC's Galileo unit, Galileo is important to Europe in four areas - transport, employment, economic/ industrial and regulatory issues.

"It is clear that satellite navigation will increasingly play a fundamental role in transport in the future," Trestour told delegates at the EC/Eurocontrol GNSS seminar in Prague, the Czech Republic, earlier this month. "GNSS will be part of an intelligent infrastructure, helping to ensure safety, streamline traffic operations, cut congestion, reduce environmental damage and support multi-modal development. Advanced navigation systems are a prerequisite for efficient transport management and sustainable mobility, which are themselves critical for economic growth," Trestour says.

Galileo will also "remedy the shortcomings" of existing satellite navigation systems - the US Department of Defense-controlled global positioning system (GPS) and Russia's Glonass. Neither system is under civilian control and Europe plays no role in either. Hence the EC believes it cannot guarantee the "reliability and availability which is indispensable for transport and vital economic operations".

Potential for jobs

The economic and industrial benefits for a European GNSS are clear. Galileo will allow the continent to claim some of the potential c40 billion global GNSS market by 2005. "The challenge is to ensure that Europe can take a fair share of the global market, and its related jobs," says Trestour. With 20,000 jobs likely to be created by the establishment of Galileo, it is obviously attractive to European governments.

While European ministers will go into their late December meeting with many of the satellite navigation answers on the table, those which remain are likely to take a lot longer to resolve.

The structure of the Galileo system itself should be known by then. "All of the architecture decisions should be made and justified by the middle of this month, in time for the December meeting," says Mike Healy, head of navigation business development at Astrium - a company active in the system definition studies and aiming to be a prime Galileo contractor.

Two architectural options have been considered - 30 medium earth orbit (MEO) satellites at a 24,000km (15,000 miles) altitude, and a combined MEO and geostationary earth orbit (GEO) option comprising 24 MEO satellites and eight GEO ones. "Both options have been presented to the Galileo steering committee and they will decide on which one is to go forward to the EU transport ministers in December," says Healy. Thirty ground stations positioned worldwide will be required to monitor the quality of the signals from the satellites. The ground structure of the European Geostationary Navigation Overlay System (EGNOS) - the first phase in Europe's GNSS programme and set to start service from the end of 2003 - will form part of the ground segment of Galileo.

Europe secured the vital radio frequencies required for the Galileo signal at the World Radiocommunication Conference (WRC 2000) in Istanbul, Turkey, in May. "Europe scored a major success here, with the desired frequency bands assigned," says Healy. "We got large chunks of bands for Galileo, enough frequencies to provide a reasonable system."

While technical issues are set to be resolved by December, financial issues will not be. Galileo development will require funding of just under c3 billion, with annual operational costs of approximately c250 million from 2008.

Galileo is cheap

Compared with other European programmes, Galileo is cheap, according to the EC. It is "the equivalent of 100km of high-speed rail track in open country". The EC and European Space Agency (ESA) will commit €1.45 billion to Galileo, but private industry is expected to foot the rest of the bill - approximately €1.5 billion plus annual operational costs - in a private-public partnership (PPP).

But exactly how much industry is willing to pay is unknown. "It's a little premature to say what private industry can contribute as the rules of the game need to be defined first, but the public bodies don't want to make the rules until they know what the private sector is giving," says Healy.

The finance issue is a "chicken and egg" situation, concedes Trestour. "You can't have private involvement before a political commitment," he says, adding that the commission "is convinced" that private industry will participate in Galileo as soon as the political decision is made to go ahead with it. The EC has consulted the private sector on their possible financial commitment and some have suggested an investment "close to €1.5 billion", according to Trestour. "However, this funding will only take off in an institutional and legal framework that can guarantee attractive revenue for investors and their bankers," he adds.

Healy believes private industry would be willing to commit upwards of €20 million over the next two years to Galileo development. Private industry commitment will be clearer this month after a meeting of the chief executive officers of the two main consortia keen to bid for Galileo work and participate in the PPP - Galileo Industries, comprising Astrium, Alcatel Space and Alenia Spazio, and Siderius (Thomson-CSF, Thomson-CSF Racal and TeleSpazio) - and EC transport commissioner Loyola de Palacio to discuss the private sector commitment. "By the middle of November we should have a private commitment from industry on what it is willing to invest," says Healy.

The EC expects a good payback from Galileo. "The initial results of the economic analysis-already show that Galileo will return several times the initial investment as of 2010, with a reasonable slice of the market. The main challenge is to mobilise the seed capital for Galileo," says Trestour. The European GNSS market for all users, between 2005-2023, has been put at €122 billion in equipment, €113 billion in services and €50 billion in exports, according to Healy.

Europe will test the GNSS waters with EGNOS, the EC believes. EGNOS "should be able to test the commercial value of the signal and the capacity of the public sector to integrate this technology into its various policies", says Trestour.

Different levels

Galileo will provide levels of service, with levels of accuracy and fees. The basic service - Open Access Service (OAS) - will be a standard positioning service similar to that provided by GPS and as good as GPS, says Healy. Controlled Access Service 1 (CAS 1) will be a restricted access charged-for service, while CAS 2 will be a controlled access, fee-paying service for critical applications, such as air traffic services. This will deliver a guaranteed service which the OAS will not, says Healy. Several revenue mechanisms have been looked at, including a one-time licence fee on receivers, service payments, shadow tolls, payments for controlled access and critical services such as air traffic services.

As well as financial issues, questions also remain regarding international co-operation, concedes the EC. While it is keen to resolve these issues, a failure to do so in the short-term will not affect the December go-ahead decision, Trestour suggests. "The possible level of co-operation with our partners needs to be known as soon as possible. This analysis will have an impact on the cost of the programme, but obviously the decision to pursue the programme should not become a hostage to it. The whole world now knows Europe's fundamental desire to co-operate," he says.

The most important international talks are those with the USA, seen as vital if Galileo is to be inter-operable with GPS, and Russia. The EC has always been keen that Russia play a role in Galileo development due to that country's GNSS expertise. Talks have also taken place with Canada, which is financially supporting Galileo's definition phase, in addition to Brazil, Chile, Israel, and countries in Africa and Asia, says Trestour. A lot of countries, however, are waiting for a European political decision on Galileo go-ahead before they commit to any participation, he adds.

Talks with the USA have been "difficult" and are "not progressing very well", concedes the commission. The USA has always hoped that Europe would not go ahead with its own GNSS independent of GPS and "are not encouraging us too much to proceed". The USA has not treated Galileo "too seriously", but is expected to do so once a positive decision on system development is made, suggests Healy.

Talks with the Russian Federation, meanwhile, have been far more positive and have "identified a scenario of possible co-operation, which would be based on the co-existence of two independent but complementary constellations, while targeting cost reductions", says Trestour. "This approach retains the sovereignty of the two parties and is a very promising and exemplary avenue of co-operation," he adds. Europe and the Russian Federation have identified "concrete industrial co-operation projects that can rapidly be set in motion", he says. With Russia's satellite navigation, launch and systems expertise, the commission believes the EU has "a lot to gain in co-operating with them".

The institutional framework for managing Galileo is possibly the biggest challenge the EC is facing, according to Trestour. Associated liability and safety regulation issues need to be resolved urgently. The Galileo project is currently being run by a steering committee comprising representatives of national governments and ESA, representing the political and strategic level of programme management.

"The management structure clearly has to be open to development, but it must also take account of a number of fundamental criteria," says Trestour. The structure must be simple and flexible enough to allow for the single and responsible management of public funds; operations must be transparent, and there must be an equitable distribution of costs between the categories of users. The management must also allow participation by the private sector. "A regulatory authority and a commercial structure on a contractual or totally privatised basis" should enable Galileo to meet its public and commercial service requirements, Trestour adds.

But exactly how the continent will move to a public body and a vehicle company to run Galileo is "still open to a lot of debate", concedes Healy.

Security and military issues also remain unresolved, believes Healy, with diverging national views on government access service, which would provide a guaranteed service for governmental and military use during times of crisis.

Once EU transport ministers give the green light to Galileo, as the EC is confident they will, the continent will proceed to full-scale development of the system, leading to satellite launches from 2005/6 and full operations from 2007/8, says Trestour.

Due to the many unresolved issues remaining with Galileo, some industry observers have suggested a more sensible approach for EU ministers would be to make a partial financial commitment to its development in December while more work is conducted on the PPP, legal and institutional aspects.

Political momentum

But the political momentum behind Galileo appears unstoppable. "The EC is keen to get the programme going," says Healy, conceding that the longer it takes Europe to get Galileo to market, the stronger GPS will be and the harder for the continent to get a major slice of the GNSS market. As Trestour says: "The EC considers Galileo as the appropriate answer to the technology challenges we face in Europe and a possibility to provide a significant contribution to future worldwide seamless GNSS."

Although aviation will only account for about 1% of the total use of GNSS, Galileo is set to make a great contribution to the European aviation industry. The EC sees Galileo as a "facilitator for a compatible European-wide navigation infrastructure. This will help to pursue the European Single Sky policy and contribute to a solution for current air traffic congestion."

Source: Flight International