LE BOURGET,
France - European government and industry
officials continue to dispute the best way to contract and deploy the
30-satellite Galileo navigation and timing constellation even as final bids are
prepared for the satellites and launch services.
In what may
be a sign that the European Commission, as Galileo's paymaster, is succeeding
in its goal of using a competitive Galileo procurement to shake up Europe's
space sector, government and industry representatives openly disagreed about Galileo's
direction here June 15-19 during the Paris Air Show.
The
European Space Agency (ESA) said its current thinking is that all 28 of the Galileo
satellites to be contracted late this year would be launched, two at a
time, by Russian Soyuz rockets operated from Europe's Guiana Space Center in
French Guiana.
"It's simple
economics," said Rene Oosterlinck, ESA's director of navigation. In a June 16
interview, Oosterlinck said Europe's heavy-lift Ariane 5 rocket would be
reserved as a backup in the event of a Soyuz problem.
The current
Ariane 5 ES version that would be used for Galileo can carry just three
750-kilogram Galileo
satellites, with a four-satellite capability possible only after a
modification of its upper stage that would cost up to 50 million euros ($70 million).
But Alain
Charmeau, chief executive officer of Astrium Space Transportation - Ariane 5's
prime contractor - said it is all but certain that several Ariane 5 vehicles
will be used for Galileo to reduce European dependence on Russian hardware for
a program meant to showcase European strategic autonomy.
In a June
17 press briefing, Charmeau said the Ariane 5 ES version's upgrade has little
to do with changing hardware and mainly concerns designing a Galileo payload
dispenser and studies on mission optimization to place the four satellites into
Galileo's medium Earth orbit.
Similarly,
Jean-Yves Le Gall, chief executive of the Arianespace launch consortium that
markets Ariane 5 and will market Soyuz, said he has a written request from the
European Commission asking that Arianespace - the sole company bidding for the
work - make a proposal featuring both Soyuz and Ariane 5 rockets.
ESA and the
European Commission appear to favor dividing the satellite construction
contract into two stages to permit a later modification
of the design, as needed. In addition, the two government agencies have
given indications that they may divide the first satellite contract between the
two bidders - consortia led by Astrium Satellites and by OHB System.
On June 15,
ESA awarded contracts to begin development of long-lead satellite components -
those whose development takes longest — to both consortia. Astrium Satellites
received a contract valued at 7 million euros, with OHB receiving 10 million
euros.
Oosterlinck
said awarding two contracts should not be seen as an indication that ESA will
be dividing the Galileo contract between the two bidders; rather, it is meant as an insurance
policy to reduce the possibility of further development delays. The hardware
produced by the contracts will belong to ESA and likely will find some use
elsewhere if one of the two contractors is not selected for final construction,
he said.
Evert
Dudok, chief executive of Astrium Satellites, urged ESA and the European
Commission not to divide the satellite construction contract, whose budget is
840 million euros
"Don't
change the rules in the middle of the game," Dudok said during a June 16 press
briefing. "If it's a competition, let's have one winner and one loser. It has
to be winner-take-all or we will be in a real mess."
ESA and the
European Commission are considering three scenarios: Ordering all 28 satellites
from one of the two bidders; ordering 16 satellites from one bidder, with 12 to
be competed later to stretch out the budget and permit rapid modifications to
the satellites if need be; and a third option in which each bidder gets an
order for eight satellites, with the final 12 to be competed at a later date.
"It is not
a budget issue, it is a question of design flexibility," Oosterlinck said.
Dudok said
the most financially efficient solution is to order all 28 satellites from a
single contractor. Giving Astrium and OHB eight satellites each would raise the
total cost of the satellite procurement by as much as 35 percent because
neither contractor could generate scale economies. If one consortium is
selected to build 16 satellites, with 12 to be competed later, the satellite
price tag would go up by 15 percent, he said.
Dudok
sharply criticized what he said was a political desire in some government
circles to "create a third satellite prime contractor" in Europe alongside
Astrium Satellites and Thales Alenia Space, which is on Astrium's Galileo team
and may be on OHB's team as well.
Dudok did
not mention the German government by name, but it is Germany that has been most
active in promoting OHB as a prime contractor, saying OHB is fully German,
whereas Astrium is at least as French as it is German, in
addition to Astrium's substantial operations in Britain and Spain.
Marco
Fuchs, chief executive of OHB Technology, which owns OHB System, dismissed
Dudok's remarks. "No one can know what price penalties you pay by contracting
with two bidders until they have seen the actual bids," Fuchs said June 18.
"Astrium doesn't know our bid price, and we don't know theirs. And even if you
suppose that non-recurring engineering costs will be relatively higher if you
use two contractors, you get the advantage of maintaining a competitive
environment for future orders."
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