WRITTEN QUESTION P-1502/01

by Jacqueline Foster (PPE-DE) to the Council

(21 May 2001)

Subject: Funding of the Galileo Satellite Navigation System Project

The Memorandum of Understanding signalling the provisional funding from private sector bodies of EUR 200 million needs further explanation. Could the Council give examples of some of the industries which have agreed to the funding? Could the Council also confirm the reports that unless a firm political decision is taken on the definitive phase by June 2001 then this commitment by the private sector will become obsolete?

In the interest of transparency may I call on the Council to make absolutely clear its intentions with regard to the funding of this project and whether, in the absence of substantial private sector interest, it will fund the project solely from the EU budget, including the EUR 220 million it will cost to maintain the project per annum? Could the Council also provide an up-to-date breakdown of the contributions foreseen from individual Member States?

Reply

(27 November 2001)

Contacts between the Commission and industrialists interested in the Galileo project have led to the signing of a memorandum of understanding on the establishment of arrangements for participation by the private sector in the development phase of the Galileo satellite radionavigation programme. Although not a party to these contacts, the Council has noted the interest to which the Galileo project continues to give rise among industrialists.

At its meeting on 5 April 2001, the Council adopted a Resolution on the Galileo project(1), which sets a work plan with a precise timetable of decisions still to be taken. In accordance with this work plan, it is envisaged that at its meetings on 27 and 28 June 2001, the Council will establish a preliminary definition of the services Galileo can provide. It cannot, of course, prejudge any decisions still to be taken in December 2001 or later.

In its April Resolution, the Council agreed immediately to release financing up to EUR 100 million for the year 2001 and, upon approval of this resolution, in compliance with the mechanisms of the Financial Regulation concerning the TEN, to take a decision in December 2001 on releasing the remaining TEN budget appropriations (namely EUR 450 million) as well as a decision on setting up the entity in charge of the management of the Galileo project.

Recalling that the European Council, at successive meetings and notably at Stockholm, confirmed the aim of securing finance largely from private sources, to that end, the Council invited the Commission to launch, as soon as possible, a tendering process giving a perspective of all the phases of the project in order to enable the longer term development of the private sector involvement in the project to identify the commercial and public services to be provided by Galileo, to specify the revenue flows that they could generate and the accompanying measures required to bring this about. This will also help to clarify the conditions for the longer term commitment by the private sector. The result of the tender evaluation will be available early in November 2001 to serve as a basis for a decision by the Council before the end of 2001. This decision will also define the maximum available Community funds for the deployment and operational phases.

The public-private partnership is recognised as a key element for the success of the Galileo project. The European Council has itself confirmed this approach at various meetings, and recently, in Stockholm, noted that the private sector had to take up the challenge with regard to participation in the project and its financing through a binding commitment for the deployment phase. It should be noted that the private sector has already made a specific response to this request by committing itself through the signing of the abovementioned memorandum of understanding as from the development phase (2001-2005), which precedes the deployment phase (2006-2007).

The Council must take a decision, before the end of 2001, specifying, among other things, the conditions for the longer term commitment by the private sector and defining the maximum available Community funds for the deployment and operational phases of the Galileoproject. As for any contributions by the various Member States, it has been specified that contributions from additional national funds will not be compulsory.

(1) OJ C 157, 30.5.2001.