GALILEO: Three operators competing for the concession

February 9, 2004

Brussels, 6 February 2004

The GALILEO joint undertaking has completed the first phase of the procedure for selecting the future concession holder of the European satellite navigation system. The second phase will now go ahead with the three consortia of companies on the shortlist. In response to the results, Loyola de Palacio, Vice-President of the Commission said: " The preselection results are very encouraging. They endorse the European institutions' approach: the private sector is willing to invest heavily in the GALILEO programme. The quality of the three tenders selected augurs well for the competitive negotiation phase".

The three consortia of companies selected to participate in the second phase are the "Eutelsat consortium", consisting in particular of Eutelsat, Hispasat, LogicaCMG and AENA, the "Inavsat consortium", consisting in particular of Inmarsat Ventures, EADS Space and Thales, and a consortium consisting in particular of Vinci Concessions, Alcatel Participations and Finmeccanica.

Each shortlisted tender was submitted by a consortium consisting of a small number of lead partners, backed up by a cluster of companies from the most diverse fields, notably financial institutions and companies working on various applications of satellite radionavigation. The wide range of candidates from different sectors of the economy who responded to the call for tender is evidence of the importance attached by all sectors to the GALILEO programme.

None of the shortlisted candidates doubt GALILEO's potential to generate substantial commercial revenue and they are all willing to fund a considerable proportion of their contribution from their own assets. The commercial and governmental services offered by GALILEO together with the intellectual property rights are considered particularly significant sources of revenue.

An information day for industry will be held on 9 March 2004 to allow the three shortlisted consortia to present themselves and to invite companies in all sectors interested in satellite navigation, for example air transport, oil prospecting, insurance and agriculture, to participate in the programme.

Timetable

The procedure for selecting the future concession holder, conducted by the GALILEO joint undertaking, began on 17 October 2003 with the publication of a concession notice in the Official Journal of the European Union. It consists of two phases: the preselection phase which has just been completed and the competitive negotiation phase.

During the second phase, the GALILEO joint undertaking will conduct negotiations with the shortlisted candidates with a view to awarding the concession. It will then present a concession award proposal.

The concession will be awarded to the shortlisted consortium which offers the best value for money, based mainly on:

- The amount of public contributions required;

- The quality of the tender submitted by the candidate, which will need, in particular, to satisfy the requirements associated with the management of a worldwide service.

The concession period for the system covers the deployment phase (scheduled for 2006 to 2007) and the operational phase (from 2008). The concession contract will give the concession holder the task of managing these phases in accordance with strict specifications. The deployment phase will see the launching of thirty satellites and the establishment of ground stations. The operating revenue will remunerate the concession holder's investment to a large extent. The concession holder will be overseen by a public body, the Supervisor Authority, as proposed by the Commission on 31 July 2003 ( IP/03/1141 ).

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. Both these systems are funded and controlled by the military authorities. The GALILEO programme, however, will be managed and controlled by civilians, and offers a guarantee of quality and continuity which is essential for many sensitive applications. Given the complementarity of GALILEO with the present systems, navigation and positioning services will increase in reliability and availability throughout the world.

For further information on GALILEO, see:

http://europa.eu.int/comm/dgs/energy_transport/galileo/index_en.htm

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

For details of the concession notice see:

http://www.galileoju.com

DN: IP/04/172 Date: 06/02/2004

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