Europeans Clash Over Galileo Satellite Plan

Europeans Clash Over Galileo Satellite Plan
An artist's illustration of the Galileo navigation satellite or Europe.
(Image: © ESA.)

LE BOURGET,France - European government and industryofficials continue to dispute the best way to contract and deploy the30-satellite Galileo navigation and timing constellation even as final bids areprepared for the satellites and launch services.

In what maybe a sign that the European Commission, as Galileo?s paymaster, is succeedingin its goal of using a competitive Galileo procurement to shake up Europe?sspace sector, government and industry representatives openly disagreed about Galileo?sdirection here June 15-19 during the Paris Air Show.

TheEuropean Space Agency (ESA) said its current thinking is that all 28 of the Galileosatellites to be contracted late this year would be launched, two at atime, by Russian Soyuz rockets operated from Europe?s Guiana Space Center inFrench Guiana.

?It?s simpleeconomics,? said Rene Oosterlinck, ESA?s director of navigation. In a June 16interview, Oosterlinck said Europe?s heavy-lift Ariane 5 rocket would bereserved as a backup in the event of a Soyuz problem.

The currentAriane 5 ES version that would be used for Galileo can carry just three750-kilogram Galileosatellites, with a four-satellite capability possible only after amodification of its upper stage that would cost up to 50 million euros ($70?million).

But AlainCharmeau, chief executive officer of Astrium Space Transportation - Ariane 5?sprime contractor - said it is all but certain that several Ariane 5 vehicleswill be used for Galileo to reduce European dependence on Russian hardware fora program meant to showcase European strategic autonomy.

In a June17 press briefing, Charmeau said the Ariane 5 ES version?s upgrade has littleto do with changing hardware and mainly concerns designing a Galileo payloaddispenser and studies on mission optimization to place the four satellites intoGalileo?s medium Earth orbit.

Similarly,Jean-Yves Le Gall, chief executive of the Arianespace launch consortium thatmarkets Ariane 5 and will market Soyuz, said he has a written request from theEuropean Commission asking that Arianespace - the sole company bidding for thework - make a proposal featuring both Soyuz and Ariane 5 rockets.

ESA and theEuropean Commission appear to favor dividing the satellite constructioncontract into two stages to permit a later modificationof the design, as needed. In addition, the two government agencies havegiven indications that they may divide the first satellite contract between thetwo 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 Satellitesreceived a contract valued at 7 million euros, with OHB receiving 10 millioneuros.

Oosterlincksaid awarding two contracts should not be seen as an indication that ESA willbe dividing the Galileo contract between the two bidders;?rather, it is meant as an insurancepolicy to reduce the possibility of further development delays. The hardwareproduced by the contracts will belong to ESA and likely will find some useelsewhere if one of the two contractors is not selected for final construction,he said.

EvertDudok, chief executive of Astrium Satellites, urged ESA and the EuropeanCommission not to divide the satellite construction contract, whose budget is840 million euros

?Don?tchange the rules in the middle of the game,? Dudok said during a June 16 pressbriefing. ?If it?s a competition, let?s have one winner and one loser. It hasto be winner-take-all or we will be in a real mess.?

ESA and theEuropean Commission are considering three scenarios: Ordering all 28 satellitesfrom one of the two bidders; ordering 16 satellites from one bidder, with 12 tobe competed later to stretch out the budget and permit rapid modifications tothe satellites if need be; and a third option in which each bidder gets anorder for eight satellites, with the final 12 to be competed at a later date.

?It is nota budget issue, it is a question of design flexibility,? Oosterlinck said.

Dudok saidthe most financially efficient solution is to order all 28 satellites from asingle contractor. Giving Astrium and OHB eight satellites each would raise thetotal cost of the satellite procurement by as much as 35 percent becauseneither contractor could generate scale economies. If one consortium isselected to build 16 satellites, with 12 to be competed later, the satelliteprice tag would go up by 15 percent, he said.

Dudoksharply criticized what he said was a political desire in some governmentcircles to ?create a third satellite prime contractor? in Europe alongsideAstrium Satellites and Thales Alenia Space, which is on Astrium?s Galileo teamand may be on OHB?s team as well.

Dudok didnot mention the German government by name, but it is Germany that has been mostactive in promoting OHB as a prime contractor, saying OHB is fully German,whereas Astrium is at?least as French as it is German, inaddition to Astrium?s substantial operations in Britain and Spain.

MarcoFuchs, chief executive of OHB Technology, which owns OHB System, dismissedDudok?s remarks. ?No one can know what price penalties you pay by contractingwith 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 yousuppose that non-recurring engineering costs will be relatively higher if youuse two contractors, you get the advantage of maintaining a competitiveenvironment for future orders.?

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