GALILEO: launching of the call for a concessionaire

Brussels, 20 October 2003

The GALILEO Joint Undertaking today published a call for tenders to launch the procedure for selecting the concessionaire for the European satellite navigation system. Commission Vice-President Loyola de Palacio issued the following statement: "This is a decisive step on the path towards the smooth functioning of a programme designed to ensure Europe's independence in one of the most promising sectors of the economy in the 21st century. Apart from the technical aspects, the success of GALILEO is also dependent on the completion of the concession process and private - sector funding"

The selection of the concessionaire by the GALILEO Joint Undertaking will be in two stages: first, short-listing and then competitive negotiation.

GALILEO, the European satellite radionavigation programme, will be global in scope. Its cost-benefit ratio, put at 4.6 (1) (2) , is better than that of any other public infrastructure project. It will be financed by both public and private funds. This is a fundamental aspect of the system which is on the one hand a public service and on the other an enormous potential source of revenue in many sectors. The growth prospects of the products and services markets connected with satellite radionavigation are considerable. The implications can be illustrated by a few figures: the markets in question already amount to some €10 billion per annum, are growing at the rate of 25% per year, and will reach some €300 billion in 2020. Over three billion receivers are likely to be in service in 2020. GALILEO should create some 100 000 jobs. The anticipated revenues are arousing keen interest among investors, and significant private-sector funding is on the cards. Hence the reason for choosing to administer the system in the form of a concession as part of a public-private partnership.

The concession period for the system covers the deployment phase (scheduled for 2006 to 2007) and the operation phase (from 2008). The concession contract will give the private-sector concessionaire the task of managing these phases in accordance with specifications. The deployment phase will see the launching of 30 satellites and the establishment of ground stations. The operating revenues will remunerate the concessionaire to a large extent. The latter will be overseen by a public body, the Supervisory Authority proposed by the Commission on 31 July ( IP/03/1141 ).

The Supervisory Authority will have the task of managing public interests relating to the GALILEO programme. It will act as licensing authority vis-à-vis the future private concessionaire to be designated before the end of 2004 and will endeavour to ensure that the concessionaire complies with the specifications provided for in the concession contract, and in particular the public service obligations in terms of continuity and guarantee of services.

The concession notice for the management of the deployment and operation phases of GALILEO were published in the Supplement to the Official Journal of the European Union of 17 October 2003.

Background

GALILEO is the European satellite radionavigation programme. It was launched at the instigation of the European Commission and developed jointly with the European Space Agency (ESA). It heralds the advent of a technological revolution comparable to that generated by mobile phones. It will also lead to the development of a new generation of universal services in sectors such as transport, telecommunications, agriculture and fisheries. To date, only the American GPS system and the Russian GLONASS system master this technology, which promises to be extremely profitable. But both those systems are funded and controlled by the military authorities. The GALILEO programme, on the other hand, will be managed and controlled by civilians, and offers a guarantee of quality and continuity which is essential for many sensitive applications. By dint of the complementarity of GALILEO with the present systems, navigation and positioning services will increase in reliability and availability throughout the world.

For further information about GALILEO, please visit the following websites:

http:///europa.eu.int/comm/dgs/energy_transport/galileo/i...

http:///www.esa.int/export/esaSA/navigation.html

Details about the concession notice are available at:

http:///www.galileoju.com
(1)
(2) As calculated in a study by Price Waterhouse Coopers.

Related item:

Galileo Invitation to Tender (link)
Commission 2003-10-17

DN: IP/03/1414 Date: 20/10/2003