Proposal for a Council Regulation on the establishment of a Joint Undertaking to develop the new generation European air traffic management system (SESAR) {SEC(2005)1532}
Date: 2005-11-25
Institutions: European Commission
Subjects: air space, air traffic, air transport, common transport policy, joint venture, trans-European network

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 25.11.2005 
COM(2005) 602 final 

2005/0235 (CNS) 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL 

on the project to develop the new generation European air traffic management system 
(SESAR) and the establishment of the SESAR Joint Undertaking 

Proposal for a 

COUNCIL REGULATION 

on the establishment of a Joint Undertaking to develop the new generation European air 
traffic management system (SESAR) 

(presented by the Commission) 

{SEC(2005)1532} 

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COMMUNICATION FROM THE COMMISSION TO THE COUNCIL 

on the project to develop the new generation European air traffic management system 
(SESAR) and the establishment of the SESAR Joint Undertaking 

1. 

INTRODUCTION 

Air  transport  contributes  €220  billion  to  European  gross  domestic  product  and 
employs  3.1  million  people.  It  is  also  an  important  aspect  of  European  cohesion, 
ensuring the rapid and efficient movement  of people and goods, but also  providing 
essential access to remote regions. 

Projections for the development of air traffic in Europe show that it should more than 
double  in  the  next  20  years,  or  even  triple  in  some  regions,  particularly  central 
Europe1. 

Developing air transport infrastructure is therefore becoming a priority for European 
growth.  Moreover,  this  growth  relies  on  the  operation  of  major  industrial  projects 
with high technological value such as GALILEO (satellite radionavigation) or ITER 
(nuclear fusion). 

SESAR falls into this category. This project aims to develop the new generation 
European  air  traffic  management  system.  The  challenge 
to  develop 
technologies, methods of organisation and industrial components that are capable of 
ensuring the safety and fluidity of air transport in the next 20 years in Europe and in 
the world. 

is 

It is also the response of the European Community to the vision of the  High Level 
Group  on  the  single  European  sky,  and  the  recommendations  of  the  Advisory 
Council  for  Aeronautics  Research  in  Europe  (ACARE),  which  called  for  a 
“revolution”  in  air  traffic  control  to  ensure  that  Europe  is  in  a  position  to  meet  the 
challenges of its economic and social development. 

With its key contribution to the development of the aeronautics sector in Europe, it is 
in  line  with  the  Lisbon  objective  of  making  the  European  Union  “the  most 
competitive  and  dynamic  knowledge-based  economy  in  the  world”.2  The  results  of 
the  impact  study  undertaken  show  that  this  project  will  contribute  significantly  to 
European growth and will promote the creation of high added-value jobs in Europe. 

Finally, it is one of the “projects of common interest” for infrastructure identified by 
the European Council.3  

1 
2 
3 

Source : Eurocontrol 
SESAR was included in the Commission's various contributions to the Lisbon process. 
Council resolutions of 24 October 1994 (94/C 309/02), of 17 November 1995 (95/C 317/01) and of 19 
July 1999 (1999/C 222/01). Decision 1692/96/EC of the European Parliament and of the Council of 23 
July 1996. Commission proposal COM(2004) 475 of 14 July 2004. 

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2. 

AIR TRAFFIC CONTROL: AN ESSENTIAL ELEMENT OF AIR OPERATIONS 

Air  traffic  control  (ATC)  is  responsible  for  ensuring  the  safety  and  regularity  of 
flights. Nowadays it is based mainly on systems for controlling and guiding aircraft 
that are located on the ground, and in particular on the work of air traffic controllers. 
In  fact,  the  pilots  in  their  cockpits  are  to  a  large  extent  “blind”,  their  “eyes”  being 
those of the controllers who tell them which paths to follow. 

2.1. 

A rapidly changing institutional organisation 

The ‘single European sky’4 adopted in March 2004, the implementation of which is 
already well-advanced, radically reforms the organisation of air navigation services. 
It clearly defines the roles and responsibilities of supervisory authorities and service 
providers, and establishes crossborder blocks of airspace. With these blocks, routes 
and  airspace  structures  are  no  longer  defined  in  accordance  with  borders  but  in 
accordance with the operational reality of traffic. 

This reform will lead to a significant reorganisation of the sector by establishing new 
working  and  decision-making  methods  that  are  more  efficient  and  based  on 
consultation of the Member States and the industry. 

2.2. 

An ageing infrastructure 

Whilst the field is changing rapidly, even if the global performance of the system has 
improved, there has been little change in the equipment. In fact, the fast growth of air 
traffic  over  the  last  20  years  has  not  been  accompanied  by  a  substantial 
modernisation of the air traffic control system. In the age of the information society, 
controllers  and  pilots  still  use  voice  communication  and  the  same  radio  means  as 
before.5  Whereas  cockpits  are  becoming  increasingly  automated,  controllers  still 
essentially  have  to  base  their  work  on  anticipating  problems  and  obstacles  which 
could  arise.  Reliability  and  safety  rates  for  air  transport,  which  are  exceptional  in 
comparison with other forms of transport, have been maintained largely as a result of 
significant increases in staff which have improved the distribution of traffic, and also 
as  a  result  of  the  efforts  made  by  all  European  air  traffic  controllers,  but  without 
changing working methods. At a time when the capacity limit is becoming critical, a 
qualitative leap is necessary. 

2.3. 

A necessary technological reform 

As current air traffic control systems are obsolescent and have an excessive amount 
of  specific  local  features,  they  are  ill-suited  for  the  rapid,  economic  and  reliable 
development of aviation in Europe. At the same time, however, needs in this sector 
are changing rapidly: 

–  passengers want efficient, affordable and safe transport; 

4 

5 

Regulation (EC) No 549/2004 laying down the framework for the creation of the single European sky. 
Regulation (EC) No 550/2004 on the provision of air navigation services. Regulation (EC) No 551/2004 
on the organisation and use of the airspace. Regulation (EC) No 552/2004 on the interoperability of the 
European Air Traffic Management network. 
This also presents safety issues relating to the congestion of the airwaves and misunderstandings which 
can arise between the instructions given by one party and the actions taken by another. 

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–  respect  for  the  environment  is  becoming  a  major  constraint  for  the  harmonious 

development of mobility; 

–  11  September  2001  showed  that  planes  can  be  a  threat  to  the  safety  of  the 

population. 

The  changes  required  to  take  account  of  this  new  approach  to  air  transport 
cannot be based on the current system: 

–  The ageing techniques and systems, based on architecture dating from the 1980s, 
are  not  designed  to  make  full  use  of  new  technologies,  for  example  satellite 
navigation technologies. 

–  The lack of technical adaptability means that aircraft must follow predefined and 
strict flight paths, which are not optimal in terms of the consumption of energy or 
noise emissions. 

–  The over-adaptation of different systems to specific local features, even if this has 
enabled  operators  to  respond  to  the  pressure  of  traffic,  makes  the  whole  system 
weaker by making both technical and operational interoperability more difficult.  
–  There  are  huge  disparities  between  the  standards  of  equipment  and  the  current 
performance  of  the  different  countries  of  the  European  Union  in  terms  of  air 
traffic control, which harms its overall performance.  

Developments in this sector are not necessarily going in the right direction: 

–  Increases in the cost of the European air traffic control system (currently about €7 
billion  per  year)  are  currently  generally  in  proportion  to  the  increase  in  traffic. 
Thus,  if  no  proactive  steps  are  taken,  under  a  simple  trend-based  scenario  air 
traffic control will cost between €14 and €18 billion per year in 2020. 

–  While, at global level, air transport has progressively achieved a very high level of 
safety, the analysis of safety data in Europe shows that, during the last five years, 
there have been three major accidents that have been directly linked to air traffic 
control  problems.6  The  analysis  of  trends  in  terms  of  air  traffic  incidents  is  still 
worrying. Even if the Community has adopted a proactive approach, particularly 
by creating the European Aviation Safety Agency, the role of which must develop 
in order to become central to all issues of air safety, it is feared that, with traffic 
becoming  significantly  more  dense  and  equipment  becoming  increasingly  more 
obsolescent,  the  risk  of  air  accidents  is  reaching  a  level  which  is  completely 
unacceptable to Europeans. 

–  The uncoordinated development of systems which we are currently seeing creates 
significant  additional  costs  and  delays  in  the  introduction  of  new  equipment, 
penalising  users  twice  in  terms  of  cost  and  performance,  but  also  penalising 
controllers who are given tools which are not very flexible or high-performance.7 

6 

7 

Paris-Roissy  in  2000,  Milan  Linate  in  2001  and  Überlingen  in  2002.  There  are  also  on  average  nine 
accidents per year which are indirectly linked to ATC. 
The most blatant example is that of the aeronautical telecommunications network, which was defined 
and standardised on an obsolete model before Internet technology and which has still not been deployed 
today. 

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3. 

THE SESAR PROJECT 

3.1. 

SESAR: new generation air traffic control 

The growth in air traffic is confronting Europe with the urgent need to modernise air 
traffic  infrastructure.  By  radically  improving  air  traffic  management,  SESAR  will 
allow us to face up to the limits of airspace and the increasing lack of airport capacity 
through the optimum use of existing infrastructure. 

SESAR  is  the  technological  element  of  the  single  European  sky:  it  allows  the 
technical  and  operational  infrastructure  to  accompany  and  facilitate  institutional 
reform.  It  will  also  use  the  regulatory  instruments  and  new  working  methods 
permitted  by  the  single  sky,  which  will  ensure  that  technological  advances  can  be 
effectively implemented in the field. 

A  real  technological  leap  must  be  made,  for  example  in  the  areas  of  data  links 
between  aircraft  and  the  ground,  satellite  navigation  and  real-time  automated  flight 
trajectories  management.  It  will  allow  the  best  use  to  be  made  of  the  significant 
developments  in  computing  and  communication  technologies,  whilst  at  the  same 
time taking account of the necessary safety, security and reliability constraints during 
the design phases of the systems. 

The  United  States,  which  is  facing  the  same  difficulties,  has  already  launched  the 
Next  Generation  Air  Transport  System  (NGATS)  project.  SESAR  is  the  European 
response  to  consolidate  Europe’s  place  in  this  sector.  The  industrial  challenge  is 
enormous since it is a global market. 

4. 

SESAR IS A MAJOR EUROPEAN INDUSTRIAL PROJECT 

The  SESAR  project  falls  into  the  same  category  as  European  industrial  successes 
such as Ariane, Airbus and GALILEO. It combines research efforts, acts as a catalyst 
for  Europe’s  innovation  capacity  and  will  make  European  air  traffic  control 
infrastructure the most modern and high-performance infrastructure in the world. 

SESAR allows the pooling and rationalisation of the development of new generation 
air  traffic  control  systems  which,  upstream,  creates  economies  of  scale  and, 
downstream, brings significant benefits in terms of the operation and maintenance of 
these systems. A study carried out for the Commission (see Annex 3), and involving 
representatives from the industry's consultative body, shows a net present value of 
€20 billion for developing SESAR.  

An overall assessment, taking account of the impact of SESAR on the whole of the 
European  aeronautics  sector,  shows  that  the  project  will  create  several  thousand 
additional jobs throughout the aeronautics sector.  

The  technological  lead  conferred  by  SESAR  on  the  European  aeronautics  industry 
will  put  it  in  position  of  strength  on  export  markets.  It  will  also  allow  European 
aircraft to compete with their foreign competitors. 

The impact of SESAR in terms of safety is fundamental. The current fragmentation 
of  systems  and  operational  procedures  and  the  ageing  technologies  are  not 
sustainable even though safety is the main objective of air traffic control. The use of 

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modern,  safe  and  reliable  technologies  and  standardisation  of  the  air  traffic  control 
infrastructure will bring significant benefits in terms of the safety of air transport.8 

The  environmental  impact  of  SESAR  will  also  be  considerable,  in  particular  as  a 
result of exploiting the amazing advances of GALILEO which will mean that flight 
paths  can  be  proposed  that  are  more  direct  and  therefore  better  in  terms  of  the 
environment. It is estimated that the savings in terms of the reduction of greenhouse 
gas emissions could be between 4 and 6% per flight9. Furthermore, the higher degree 
of  precision  and  flexibility  offered  by  satellite  navigation  and  the  new  generation 
systems for landing and taking off will mean that flight paths around airports can be 
optimised  in  order  to  take  better  account  of  the  needs  of  local  residents.  These 
benefits  are  however  related  to  each  flight  made  and  a  significant  increase  in  the 
number  of  flights  will  have  an  overall  negative  effect  on  the  environment,  which 
SESAR  cannot  entirely  prevent.  It  is  therefore  necessary  to  provide  for  additional 
measures aimed at reducing the impact of aviation on the environment. 

5. 

THE GOVERNANCE OF SESAR: A KEY FACTOR FOR ITS SUCCESS 

5.1. 

Avoiding deadlocks in decision-making 

Problems encountered in the modernisation of air transport infrastructure also result 
from decision-making difficulties. There are great differences in the type and status 
of  the  various  stakeholders  in  the  air  traffic  control  sector  which  are  reinforced  by 
geographical differences. 

As  was  the  case  for  GALILEO,  making  use  of  the  Community’s  institutional 
mechanisms and a flexible and original management structure will mean that current 
obstacles can be overcome. 

5.2. 

The single European sky: an institutional solution 

With the regulatory instruments which it has put in place in the context of the single 
European  sky,  the  Community  has  efficient  decision-making  mechanisms  which 
have  a  strong  element  of  consultation,  in  particular  through  the  Single  Sky 
Committee, composed of the Member States, and the industry's consultative body in 
which  all  stakeholders  in  the  industry  take  part.  Its  decisions  are  compulsory  and 
must be implemented through regulations and this is their strength. 

5.3. 

The SESAR Joint Undertaking 

SESAR will combine research and development funds to create a new generation of 
systems  and  will  allow  the  equipment  in  the  different  countries  of  the  European 
Union  to  be  standardised  and  a  new  European  aeronautical  infrastructure  to  be 
deployed. 

8 

9 

In particular, the Commission has just adopted a communication on reducing the climate change impact 
of aviation (COM(2005)459 final). 
Eurocontrol data 

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This policy must be able to develop in the framework of a public-private partnership 
combining the long-term institutional investment capacity with a sharing of the risk 
with industry. The project must be able to benefit from public and private funds and 
must be guided by the programme and not the budget, and must allow for it gradually 
and irrevocably to be taken over by the industry. 

It  is  therefore  necessary  to  have  a  flexible  and  reactive  structure  with  a  legal 
personality so that it can conclude the contracts required to develop the European air 
traffic  control  system.  Close  links  with  the  public  authorities  responsible  for 
regulation should however be maintained. 

SESAR is first and foremost an ambitious research and development project and will 
as  such  be  able  to  benefit  from  Community  funding  from  the  research  framework 
programme  and  the  trans-European  networks  programme  which  explicitly  provide 
for  the  possibility  of  the  financing  technological  development  activities.  In  this 
context, Article 171 of the Treaty provides the Community with an effective tool, the 
Joint Undertaking, which has proved its worth in the GALILEO project. 

Such a Joint Undertaking is in line with the Lisbon strategy in that it allows public 
and private resources to be combined for a joint objective. It is also flexible enough 
to be able to manage research projects itself or to interact efficiently and proactively 
with other initiatives in order to ensure overall consistency. 

A proposal for a regulation setting up the joint undertaking and defining its statutes is 
attached to this communication. 

The Joint Undertaking has a number of advantages: 

–  it ensures the coordinated management of a budget from very diverse sources; 
–  it  allows  the  Community  (Member  States  and  the  Commission)  to  maintain 

political control over SESAR; 

–  it  ensures  consistency  between  the  Commission’s  actions  under  the  single 

European sky and the actions required for SESAR; 

–  it ensures the consistency of a project that affects very disparate stakeholders (air 

companies, the military, industry, service providers etc.); 

–  it  can  benefit  from  technical  support  from  Eurocontrol10,  developed  within 

SESAR; 

–  it  can  fully  involve  industry,  particularly  through  contributions  of  private 

transnational capital;  

–  it  can  receive  a  contribution  from  users,  directly  levied  on  route  charges  for 

projects of common interest; 

–  it  can  open  up  the  possibility  of  extending  the  SESAR  partnership  to  third 

countries. 

The joint undertaking will operate at project supervision level. It will rely to a large 
extent on external technical efforts, in particular on the part of its members. It must 

10 

In particular in application of the ATM 2000+ strategy 

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be  set  up  quickly  in  order  to  take  over  the  modernisation  plan  resulting  from  the 
definition phase and prepare the resulting work programme. 

6. 

SESAR IS A PROJECT IN STAGES 

In view of the differences between the air traffic control systems in Europe and the 
diversity  of  the  fleet  of  aircraft  in  service,  there  must  be  a  transition  to  ensure  the 
continuity and quality of the services offered to users of European airspace. 

SESAR  is  also  planned  in  several  stages  in  order  to  allow  flexibility  in  the 
implementation of developments and to minimise the transitory risks. 

6.1. 

The definition phase (2005-2007) 

The main aim of the definition phase is to draw up the plan for the modernisation of 
air  traffic  management  in  Europe.  It  defines  the  different  technological  steps  to  be 
taken, 
timetables  for  operational 
implementation. 

the  priorities  for  modernisation  and 

the 

This definition phase, cofinanced with Eurocontrol, represents a sum of €60 million, 
half  of  which  is  provided  by  the  Community  under  the  trans-European  transport 
networks. It is currently being launched and will be completed at the end of 2007. It 
represents two years’ work by a team of nearly 200 people, including representatives 
from  throughout  the  industry,  which  shows  the  strong  feeling  of  ownership  and 
involvement which the stakeholders in the field have in relation to SESAR. 

6.2. 

The implementation phase (2008-2020) 

The  definition  phase  will  be  followed  by  an  implementation  phase  which  will 
consist of two successive stages: 

•  Development (2008-2013) 
This  phase  will  see  the  establishment  of  the  technological  bases  which  will  be  the 
foundation of the new generation of systems. It will lead to major changes in terms 
of functions, in particular on the development of assistance for air traffic control and 
the  sharing  of  certain  tasks  between  the  ground  and  the  aircraft  in  order  to  free  air 
traffic controllers from tasks which could be carried out by pilots in certain phases of 
the flight (for example during the approach phases). 

•  deployment (2014-2020) 
This  is  the  phase  for  the  large-scale  installation  of  the  new  systems  and  the 
widespread  implementation  of  the  related  functions.  The  air  traffic  management 
system resulting from this last stage corresponds to the new generation of air traffic 
control. This new system will triple its capacity compared with the current situation, 
with  the  level  of  safety  increased  by  a  factor  of  at  least  10  and  a  unit  cost  of 
operation much lower than the current cost. 

The  Joint  Undertaking  must  be  set  up  quickly,  even  before  the  end  of  the 
definition phase, so that it can appropriate the modernisation plan being drawn 
up  and  prepare  the  resulting  work  programme.  It  will  thus  be  able  to  benefit 

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from the momentum of the definition phase and will continue it in the effective 
implementation of the industry’s recommendations. 

6.3. 

Stakeholders and financing 

The  following  table  gives  the  different  financial  deadlines  for  the  project  and 
identifies the stakeholders who will be responsible for implementing this financing. 

The  Commission’s  financial  analysis  shows  that  the  funding  needs  for  the 
foundation,  deployment  and  consolidation  phases  of 
the  project  will  be 
approximately €300 million per year: 

Phase 

Years 

Definition 

2005-2007 

Development 

2008-2013 

Deployment 

2014-2020 

Funding 
€60 million: 
Eurocontrol (€30 million) 
Community (€30 million ) 
€300 million per year: 
Community (€100 million )  
Eurocontrol (€100 million )  
Industry and others (€100 million ) 
Industry 

Stakeholders

Eurocontrol 

Joint 
Undertaking 

Industry 

The  figures  given  are  indicative,  except  for  the  definition  phase.  They  will  be 
clarified  during  this  first  phase  which  is  under  way  and  will  give  rise  to  a  specific 
communication from the Commission on the subject in the course of 2006. 

In particular, it should be noted that at the end of the deployment phase in 2013, the 
industry  will  be  responsible  for  the  financing  and  control  of  the  whole  SESAR 
project.  At  the  end  of  this  phase,  and  based  on  the  progress  made  in  achieving  its 
objectives,  the  Joint  Undertaking  will  be  required  to  transform  into  an  essentially 
private body (for example in the form of a European company) which will ensure the 
development of the project according to the initial ambitions whilst making sure that 
there are no conflicts of interest. This structure should nevertheless allow the public 
authorities  to  keep  a  stake  in  the  project,  particularly  as  the  owner  of  tangible  and 
intangible  assets  financed  by  public  funds.  Such  a  stake  will  also  make  it  easier  to 
supervise  work,  particularly 
international  cooperation  and 
standardisation procedures. 

tasks  relating 

to 

The budget would come from the following sources: 

–  the  European  Community,  from  the  research  and  development11  framework 
programmes  and  the  trans-European  networks.  After  the  definition  phase,  the 
Community's financial participation is strictly limited to the duration of the new 
financial perspective 2007-201312; 

11 

12 

The Commission will keep ACARE (Advisory Council for Aeronautics Research in Europe) informed 
about the Joint Undertaking's programmes. 
Any modification to the annual spending from the community budget will need to be approved during 
discussions relating to budgetary procedures of the said year, and will stay below the approved ceilings 
for “projects of common interest”, following decisions taken on the proposal COM (2004) 475 final  

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–  resources from industry; 
–  the Eurocontrol budget; 
–  the budget from the route charges, levied according to the terms of Article 15(1) 
of the Regulation on the provision of services in the framework of the single sky; 
–  the contributions of other new members of the Joint Undertaking, including third 

countries. 

7. 

CONCLUSION 

The  impact  study  on  the  project  to  modernise  the  European  air  traffic  control 
infrastructure, as well as the discussions with stakeholders in the area, in particular 
the consultation of the Member States through the Single Sky Committee, the social 
partners and industry, have shown that the only solution in Europe for developing the 
new generation of air traffic control systems is to pool energies in a major industrial 
project. 

The definition phase of SESAR, which has already been launched, shows a degree of 
commitment  and  ownership  which  has  never  before  been  seen  in  the  world  of  air 
transport.  It  is  also  a  sign  of  the  degree  of  urgency  in  which  the  aeronautics 
community finds itself, and of how important the expected benefits of SESAR are. 

SESAR  will  represent  real  progress  in  terms  of  efficiency  by  making  available 
technologies which will optimise the capacities of machines and people. SESAR will 
also  create  substantial  economies  of  scale  by  the  rationalisation  of  development 
projects and the extensive standardisation and interoperability of systems installed.  

SESAR  will  also  increase  the  environmental  efficiency  of  each  flight  by  reducing 
congestion, which is costly in terms of pollution, and optimising the flight paths of 
aircraft in accordance with environmental constraints. 

Finally,  SESAR  will  greatly  increase  the  safety  of  air  transport,  which  is  currently 
threatened  by  the  obsolescence  of  equipment  and  the  lack  of  standardisation  of  air 
traffic  control  in  Europe.  This  is  the  aspect  which  will  be  of  greatest  benefit  to 
European society as a whole, in particular for citizens who put safety at the heart of 
their aspirations.  

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

1.1. 

Grounds for and objectives of the proposal 

Projections for the development of air traffic in Europe show that it should more than 
double  in  the  next  20  years,  or  even  triple  in  some  regions,  particularly  central 
Europe. 

Developing air transport infrastructure is therefore becoming a priority for European 
growth.  Moreover,  this  growth  relies  on  the  operation  of  major  industrial 
programmes  with  high 
(satellite 
radionavigation) or ITER (nuclear fusion). 

technological  value  such  as  GALILEO 

SESAR falls into this category. This programme aims to develop the new generation 
European  air traffic  management system.  The challenge is  to develop technologies, 
methods of organisation and industrial components that are capable of ensuring the 
safety and fluidity of air transport in the next 20 years in Europe and in the world. 

The  purpose  of  the  proposal  is  to  create  a  SESAR  Joint  Undertaking  to  ensure  the 
coherence and consistency of the programme, whilst promoting partnership between 
the Community and other institutions and bodies, both public and private. 

1.2. 

General context 

As current air traffic control systems are obsolescent and have an excessive amount 
of  specific  local  features,  they  are  ill-suited  for  the  rapid,  economic  and  reliable 
development of aviation in Europe. At the same time, however, needs in this sector 
are changing rapidly: 

–  passengers want efficient, affordable and safe transport; 

–  respect  for  the  environment  is  becoming  a  major  constraint  for  the  harmonious 

development of mobility; 

–  11  September  2001  showed  that  planes  can  be  a  threat  to  the  safety  of  the 

population. 

The  developments  required  to  take  account  of  this  new  approach  to  air  transport 
cannot be based on the current system: 

–  The  ageing  techniques,  some  of  which  based  on  a  architecture  several  decades 
old, are reaching their maximum capacity to evolve in order to make full use of 
new technologies, for example satellite navigation technologies. 

–  The lack of technical adaptability means that aircraft must follow predefined and 
strict flight paths, which are not optimal in terms of the consumption of energy or 
noise emissions. 

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–  The over-adaptation of different systems to specific local features, even if this has 
enabled  operators  to  respond  to  the  pressure  of  traffic,  makes  the  whole  system 
weaker by making both technical and operational interoperability more difficult. It 
also  raises  the  question  of  the  overall  capacity  of  the  system  to  adapt  to  new 
functions. 

–  There  are  huge  disparities  between  the  standards  of  equipment  and  the  current 
performance  of  the  different  countries  of  the  European  Union  in  terms  of  air 
traffic control, which harms its overall performance.  

Developments in this sector are not necessarily going in the right direction: 

–  Increases in the cost of the European air traffic control system (currently about €7 
billion  per  year)  are  currently  generally  in  proportion  to  the  increase  in  traffic. 
Thus,  if  no  proactive  steps  are  taken,  under  a  simple  trend-based  scenario  air 
traffic control will cost between €14 and 18 billion per year in 2020. 

–  While, at global level, air transport has progressively achieved a very high level of 
safety, the analysis of safety data in Europe shows that, during the last five years, 
there have been three major accidents that have been directly linked to air traffic 
control  problems.  The  analysis  of  trends  in  terms  of  air  traffic  incidents  is 
worrying. Even if the Community has adopted a proactive approach, particularly 
by creating the European Aviation Safety Agency, the role of which must develop 
in order to become central to all issues of air safety, it is feared that, with traffic 
becoming  significantly  more  dense,  the  risk  of  air  accidents  is  reaching  a  level 
which is completely unacceptable to Europeans. 

The  uncoordinated  development  of  systems  which  we  are  currently  seeing  creates 
significant  additional  costs  and  delays  in  the  introduction  of  new  equipment, 
penalising  users  twice  in  terms  of  cost  and  performance,  but  also  penalising 
controllers who are given tools which are not very flexible or high-performance. 

1.2.1.  Existing provisions in the area of the proposal 

There are no existing provisions in the area of the proposal. 

1.2.2.  Consistency with the other policies and objectives of the Union 

The ‘single European sky’ adopted in March 2004, the implementation of which is 
already well-advanced, radically reforms the organisation of air navigation services. 
It clearly defines the roles and responsibilities of supervisory authorities and service 
providers, and establishes crossborder blocks of airspace. With these blocks, routes 
(and  airspace  structures)  are  no  longer  defined  in  accordance  with  borders  but  in 
accordance  with  the  operational  reality  of  traffic.  SESAR  is  the  technological 
element of the single European sky. 

The  proposal  also  fits  in  with  the  Lisbon  Strategy  by  integrating  and  speeding  up 
European research and technological innovation in order to stimulate growth and the 
creation of jobs in Europe. 

Finally,  SESAR  is  one  of  the  “projects  of  common  interest”  for  infrastructure 
identified  by  the  European  Council.  Council  resolutions  of  24  October  1994  (94/C 

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309/02), of 17 November 1995 (95/C 317/01) and of 19 July 1999 (1999/C 222/01). 
Decision  1692/96/EC  of  the  European  Parliament  and  of  the  Council  of  23  July 
1996. Commission proposal COM(2004) 475 of 14 July 2004. 

2. 

CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

2.1. 

Consultation of interested parties 

2.1.1.  Consultation methods, main sectors targeted and general profile of respondents 

The  industry  consultation  body  set  up  by  the  framework  Regulation  for  the  single 
European sky (Regulation (EC) No 549/2004) and composed of representatives from 
throughout  the  civil  aviation  industry  (including  the  social  partners)  created  a 
specific  subgroup  to  be  responsible  for  the  economic  impact  study  and  the 
assessment of the different possible forms of governance for SESAR. 

The  results  of  this  study  have  also  been  the  subject  of  a  joint  presentation  to  the 
members of the industry consultation body and the single sky committee, composed 
of representatives from the states of the European Union.  

2.1.2. 

Summary of responses and how they have been taken into account 

The continuous involvement of the players in the economic impact and governance 
assessment meant that the specimen quotations could be validated and comments and 
suggestions could be gathered along the way. 

In  addition,  when  drawing  up  its  proposal,  the  Commission  took  account  of  the 
comments made during the final presentation of the study. 

2.2. 

Collection and use of expertise 

The  use  of  external  expertise,  apart  from  in  the  economic  impact  and  mode  of 
governance study, was not necessary. 

2.3. 

Impact assessment 

As  an  option,  “not  doing  anything”  will  mean  activities  relating  to  the  research, 
development and implementation of new air traffic control equipment continue to be 
carried  out  in  a  dispersed  and  fragmented  way  in  Europe.  The  role  of  the 
Commission will be limited to setting standards for  the interoperability of systems, 
the  existence  of  which  will  not  give  any  boost  to  innovation:  standards  are  set  de 
facto  to  maintain  innovation  rather  than  speed  it  up.  In  this  scenario,  there  will 
continue to be a high degree of fragmentation within the European air traffic control 
infrastructure  and  the  lack  of  consolidation  of  research  will  risk  not  generating 
enough  technological  innovation  to  renew  systems.  Furthermore,  the  decision-
making  processes  will  continue  to  be  inefficient,  owing  to  the  gap  between 
technological action and the legal provisions for implementing it. This option would 
therefore mean that the air traffic control infrastructure is not able to accommodate 
the  desired  growth  in  traffic,  which  will  result  in  poor  operational  and  financial 
performance. The cost of congestion has been estimated at €20 billion and the risk in 

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terms  of  safety  is  real,  with  the  air  traffic  control  system  operating  at  full  capacity 
and using obsolete equipment. 

A  second  option  was  analysed,  aimed  at  setting  up  a  central  European  body  which 
would  replace  national  and  local  bodies.  The  latter  would  then  be  responsible  only 
for putting the products developed by the central body into operational service. This 
option has, however, met with considerable opposition from all players consulted. 

Thus,  the  suppliers  of  air  navigation  services  consider  that,  in  an  area  which  is 
becoming  increasingly  competitive  particularly  as  a  result  of  the  single  sky, 
equipment  is  an  essential  component  of  their  production  plant  and  it  is  therefore 
important to keep a minimum amount of strategic control. The social partners, whilst 
recognising that standardisation “from above” was desirable, have suggested that the 
transition  between  the  current  patchwork  of  local  equipment  and  such  a  situation 
would  require  a  local  or  regional  component,  at  least  in  the  beginning.  The  air 
operators, although wanting a standard system in Europe, recognised the value of a 
gradual  transition.  The  Member  States  wanted  a  certain  level  of  competition  to  be 
maintained in Europe, and wanted the transition to be organised to take account of 
local constraints. 

The planned option of creating a joint undertaking to manage SESAR’s activity is a 
middle  way  between  the  two  previous  options,  centralising  what  it  is  expedient  to 
centralise, whilst leaving enough flexibility for local implementation and adaptation. 
The  joint  undertaking,  which  provides  for  significant  industry  participation,  also 
allows  the  long-term  institutional  investment  capacity  to  be  combined  with  sharing 
the risk with industry. This option seems to be extremely positive from an economic 
point  of  view  in  comparison  with  the  option  of  “not  doing  anything”  because  the 
financial analysis gives acompared incremental net present value of about 20 billion 
€. This option means that a high-performance and cutting-edge system can be put in 
place,  which  will  increase  the  environmental  efficiency  of  each  flight,  whilst 
maximising  safety.  In  addition,  the  rationalisation  of  the  research  and  development 
programme and the partnership between public authorities and private undertakings 
envisaged by the joint undertaking will enable European industry to achieve a high 
degree of competitiveness on the market for the sale of equipment and aircraft.  

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

3.1. 

Summary of the proposed action 

The  proposal  consists  of  a  Council  regulation  on  the  establishment  of  the  SESAR 
Joint Undertaking. 

3.2. 

Legal basis 

The legal basis of the proposal is Article 171 of the Treaty establishing the European 
Community. 

3.3. 

Subsidiarity principle 

The principle of subsidiarity applies in so far as the proposal does not affect an area 
where the Community has exclusive competence. 

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The  objectives  of  the  proposal  may  not  be  achieved  to  a  sufficient  extent  by  the 
action of Member States for the following reasons: 

–  The single European sky is, by nature, supranational. It establishes, in particular, 
the  formation  of  functional  crossborder  blocks  of  airspace.  With  these  blocks, 
routes  and  airspace  structures  are  no  longer  defined  in  accordance  with  national 
borders  but  in  accordance  with  the  reality  of  traffic  flows.  The  new  air  traffic 
control  systems,  intended  in  particular  to  equip  these  functional  blocks  of 
airspace,  cannot  be  limited  to  a  national  dimension.  In  addition,  the  new 
technologies  implemented  will  require  equipment  for  aircraft,  for  which  there  is 
little point in being limited to a purely national technological choice. Finally, the 
disparities  between  the  equipment  and  performance  of  the  Member  States’  air 
traffic control systems are such that harmonisation at European level is necessary: 
the  overall  performance  of  the  European  air  traffic  control  infrastructure, 
particularly  in  terms  of  safety,  depends  above  all  on  the  performance  of  its 
“weakest” links. 

–  The  Member  States  have  adopted  a  declaration  on  military  issues  related  to  the 
single European sky13 according to which a close European cooperation between 
civil  and  military  users,  on  all  issues  relating  to  air  traffic  management,  is 
necessary. 

–  The  European  air  traffic  control  equipment  industry  is  working  in  a  “niche” 
market, in which there are hardly any off-the-shelf product lines, given that each 
control system installed is specific to local constraints. This therefore generates a 
high unit cost of production and affects the industry’s capacity for investment in 
technological  innovation,  which  is  a  weakness  in  comparison  to  the  American 
competition which benefits from a large single market in the United States. 

The pooling of research and development efforts at EU level is therefore necessary, 
given  the  transnational  nature  of  the  equipment  and  technologies  to  be  developed, 
and also the need to achieve a sufficient mass of resources to permit innovation. 

The aims of the proposal may be better achieved through Community action for the 
following reasons: 

–  The research and development efforts must be carried out at European level. The 
effective  implementation  of  technological  innovations  must  be  synchronised 
within  the  Union  in  order  to  ensure  the  homogenous  nature  of  the  quality  and 
safety  of  the  air  traffic  control  service  within  the  European  area.  This 
synchronisation  can  only  be  carried  out  by  using  the  Community’s  legal 
provisions resulting from the single sky. 

In  addition,  the  public-private  partnership  which  is  necessary  to  maximum  the 
synergies necessary for innovation, as well as the participation of third countries, are 
conceivable only at European level. 

13 

OJ L 96, 31.3.2004, p. 9 

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15 

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Community  intervention  will  allow  the  rationalisation  of  development  programmes 
and  significant  interoperability  of  systems  installed  which  will  result  in  substantial 
economies of scale. The standardisation of systems in Europe and the replacement of 
obsolete  technologies  will  also  lead  to  a  significant  improvement  in  the  level  of 
safety of European air traffic control. 

The  economic  assessment  shows  that  SESAR  will  contribute  substantially  to 
European  growth  and  the  creation  of  new  jobs  in  Europe  by  improving  the 
performance  of  air  transport  activities  and  increasing  the  competitiveness  of  the 
European aeronautical sector. 

The  option  chosen  to  make  this  proposal  is  a  combination  of  pooling,  at  European 
level, what must be pooled (research programmes, planning), what it is expedient to 
pool  (development  of  joint  components),  whilst  leaving  local  flexibility  for 
implementation. 

The proposal therefore complies with the subsidiarity principle. 

3.4. 

Proportionality principle 

The proposal complies with the proportionality principle for the following reasons. 

SESAR  coordinates  and  integrates  the  research  and  development  activities  in  the 
field  of  air  traffic  control  in  Europe;  uniform  management  of  this  programme  is 
necessary in order to ensure consistency. The option of a joint undertaking seemed to 
all players to be the simplest way of managing SESAR, as it allows public authorities 
(Community,  Eurocontrol)  to  be  associated  with  the  private  sector.  It  also  enables 
third  countries  that  have  concluded  at  least  one  agreement  with  the  European 
Community  in  the  field  of  air  transport  to  be  associated  with  SESAR.  The  joint 
undertaking  will  operate  at  project  supervision  level.  However  it  will  have  to  be 
given enough technical capability to enable it to ensure that the decisions it will have 
to take are well-founded. It will rely to a large extent on external technical efforts, in 
particular on the part of its members. 

The overall financial burden required for SESAR has been estimated at €300 million 
per  year.  This  amount  must  however  be  seen  in  the  context  of  the  €200  million 
currently spent in Europe on research alone, or the €1 billion of annual investment at 
European  level  in  air  traffic  control.  SESAR  will  rationalise  this  expenditure  by 
coordinating it and avoiding the duplication of efforts. 

3.5. 

Choice of instruments 

Proposed instrument(s): regulation. 

Other means would not have been adequate for the following reason(s): 

–  The  creation  of  an  undertaking  in  which  the  Community  participates  requires  a 

Council regulation. 

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4. 

BUDGETARY IMPLICATIONS 

The preliminary budgetary assessment, which must however be fine-tuned during the 
definition phase which is under way, indicates Community expenditure of €3 million 
in 2007 and €100 million per year between 2008 and 2013. 

5. 

ADDITIONAL INFORMATION 

5.1. 

Simulation, pilot phase and transitory period 

The proposal is subject to a definition phase which has already been launched. 

5.2. 

Review/revision/sunset clause 

The proposal includes a review clause. 

The proposal includes a sunset clause of all or part of the legislative act if predefined 
conditions are met. 

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2005/0235 (CNS) 

Proposal for a 

COUNCIL REGULATION 

on the establishment of a Joint Undertaking to develop the new generation European air 
traffic management system (SESAR) 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular Article 
171 thereof, 

Having regard to the proposal from the Commission14, 

Having regard to the opinion of the European Parliament15, 

Having regard to the opinion of the European Economic and Social Committee16, 

Whereas: 

(1) 

(2) 

In order to create the single European sky, on 10 March 2004 the European Parliament 
and the Council adopted Regulation (EC) No 549/2004 laying down the framework for 
the  creation  of  the  single  European  sky  (the  framework  Regulation)17,  Regulation 
(EC) No 550/2004 on the provision of air navigation services in the single European 
sky  (the  service  provision  Regulation)18,  Regulation  (EC)  No  551/2004  on  the 
organisation  and  use  of  the  airspace  in  the  single  European  sky  (the  airspace 
Regulation)19,  and  Regulation  (EC)  No  552/2004  on  the  interoperability  of  the 
European Air Traffic Management network (the interoperability Regulation)20. 

The  project  to  modernise  air  traffic  management  in  Europe,  hereinafter  called  the 
“SESAR project”, is the technological element of the single European sky. It aims to 
give  the  Community  a  high-performance  air  traffic  control  infrastructure  which  will 
enable the safe and environmentally friendly development of air transport, benefiting 
fully from the technological advances of programmes such as GALILEO. 

(3) 

The SESAR project aims to integrate and coordinate activities which were previously 
undertaken in a dispersed and uncoordinated manner in the Community. 

14 
15 
16 
17 
18 
19 
20 

OJ C […], […] , p.[…]. 
OJ C […], […] , p.[…]. 
OJ C […], […] , p.[…]. 
OJ L 96, 31.3.2004, p. 1. 
OJ L 96, 31.3.2004, p. 10. 
OJ L 96, 31.3.2004, p. 20. 
OJ L 96, 31.3.2004, p. 26. 

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(4) 

(5) 

(6) 

(7) 

(8) 

The first phase of the SESAR project, the “definition” phase, which aims to define the 
different  technological  steps  to  be  taken,  the  priorities  in  the  modernisation 
programmes and the operational implementation plans, is under way. It is cofinanced 
by  the  Community  under  the  trans-European  networks  and  by  the  European 
Organisation for the Safety of Air Navigation (Eurocontrol). 

This  definition  phase  is  carried  out  under  the  responsibility  of  Eurocontrol  by  a 
consortium of undertakings chosen after a public invitation to tender. It will finish in 
2007 and will result in a plan to modernise air traffic management in the Community. 

The definition phase will be followed by a phase to implement the plan to modernise 
air traffic management in the Community, which will consist of two successive steps: 
development (2008-2013) and deployment (2014-2020). 

In accordance with Article 15(3) of Regulation (EC) No 550/2004, the route charges 
can  provide  income  to  finance  projects  aimed  at  supporting  specific  categories  of 
airspace  users  and/or  air  navigation  service  providers  in  order  to  improve  the 
collective air navigation structures, the supply of air navigation services and the use of 
airspace. 

In accordance with the guidelines adopted by the Competitiveness Council of 7 June 
200521  concerning  the  preparation  of  the  future  European  space  programme,  the 
European  Union  will  be  responsible  for  ensuring  the  availability  and  continuity  of 
operational services supporting its policies, and it will contribute to the development, 
deployment  and  operation  of  a  European  space  infrastructure  by  concentrating  on 
space-based applications to contribute to the achievement of its policies. 

(9) 

By  avoiding  the  duplication  of  research  and  development  activities,  the  SESAR 
project will not lead to an increase in the overall volume of air users’ contribution to 
research and development efforts. 

(10)  Following 

the  Community’s  accession 

the  Commission  and 
Eurocontrol  have  signed  a  cooperation  framework  agreement  for  the  implementation 
of the single European sky and for research and development activities in the field of 
air traffic control. 

to  Eurocontrol, 

(11)  The  public  budget  for  the  implementation  phase  of  the  SESAR  project  should  be 

supplemented by contributions from the private sector. 

(12)  Taking  into  account  the  number  of  players  who  will  need  to  be  involved  in  this 
process, and the financial resources and technical expertise needed, it is vital to set up 
a legal entity capable of ensuring the coordinated management of the funds assigned to 
the SESAR project during its implementation phase. 

(13)  This  entity,  which  is  responsible  for  managing  a  public  research  programme  of 
European  interest,  must  be  considered  as  an  international  organisation  within  the 
meaning  of  the  second  indent  of  Article  15(10)  of  the  Sixth  Council  Directive 
77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States 
relating  to  turnover  taxes  –  Common  system  of  value  added  tax:  uniform  basis  of 

21 

9440/05 RECH 120 COMPET 111 

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assessment22, and the second indent of Article 23(1) of Council Directive 92/12/EEC 
of 25 February 1992 on the general arrangements for products subject to excise duty 
and on the holding, movement and monitoring of such products23. 

(14)  This entity should also be exempt from taxation by the Member States as regards taxes 
other than VAT and excise duty, and salaries paid to its staff should be exempt from 
any national income tax. 

(15)  SESAR  is  a  research  and  development  project  which  justifies  funding  from  the 
Community  research  and  development  framework  programmes.  It  is  therefore 
necessary  to  set  up  a  Joint  Undertaking  under  Article  171  of  the  Treaty  in  order  to 
enable considerable progress to be made in the development of technologies relating to 
air traffic control systems during the development phase (2008-2013) phases. 

(16)  Article 4(g) of Decision 1692/96/EC of the European Parliament and the Council of 23 
July  1996,  on  the  guidelines  on  development  of  the  Trans-European  transport 
network24, foresees the possibility to finance research and development activities.  

(17)  The main task of the Joint Undertaking must be to organise and coordinate the SESAR 
project  by  combining  public  and  private  sector  funding  and  using  external  technical 
resources, provided by its members, and in particular Eurocontrol’s experience. 

(18) 

In order to facilitate communication with the founding members, the seat of the Joint 
Undertaking should be located in Brussels. 

(19)  As route charges are entirely borne by airspace users, the latter contribute financially 
to  the  research  and  development  efforts  in  the  air  traffic  management  sector.  They 
should therefore be given appropriate representation within the Joint Undertaking. 

(20)  The  rules  for  the  organisation  and  operation  of  the  Joint  Undertaking  should  be  laid 

down by drawing up the statutes of the Joint Undertaking. 

(21)  The Commission is assisted by the Single Sky Committee established by Article 5 of 

Regulation (EC) No 549/2004.  

(22)  The Joint Undertaking should be set up before the end of the definition phase so that it 
can  follow  the  work  of  the  definition  phase  and  prepare  the  development  phase  in 
order to ensure a rapid implementation of the plan to modernise air traffic management 
in Europe. 

22 

23 

24 

OJ L 145, 13.06.1977, p. 1. Directive as last amended by Directive 2004/66/EC (OJ L 168, 1.5.2004, p. 
35). 
OJ L 76, 23.03.1992, p. 1. Directive as last amended by Directive 2000/106/EC (OJ L 359, 4.12.2004, 
p. 30). 
OJ L 228, 9.9.1996, p. 1. Decision as last amended by Decision 884/2004/EC, (OJ L 167, 30.4.2004, p. 
1) 

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HAS ADOPTED THIS REGULATION: 

Article 1 
Establishment of a Joint Undertaking 

1. 

2. 

In order to carry out the development activities of  the implementation phase of the 
project to modernise air traffic management in Europe, hereinafter referred to as the 
“SESAR  project”,  a  Joint  Undertaking  is  hereby  established,  known  as  “SESAR 
Joint Undertaking” for a period ending on 31 December 2013. 

The  aim  of  the  Joint  Undertaking  shall  be  to  ensure  the  modernisation  of  the 
European  air  traffic  management  system  by  federating  research  and  development 
efforts  in  the  Community.  It  shall  be  responsible  in  particular  for  carrying  out  the 
following tasks: 

–  organising  and  coordinating  the  implementation  of  the  SESAR  project,  in 
accordance  with  the  plan  to  modernise  air  traffic  management  in  Europe, 
hereinafter  referred  to  as  “the  plan”,  drawn  up  by  Eurocontrol,  by  combining 
public and private sector funding; 

–  updating the plan and verifying its execution; 

–  organising the technical work of research and development, validation and study, 

to be carried out under its authority; 

–  ensuring  the  supervision  of  activities  related  to  the  development  of  common 
products  duly  identified  in  “the  plan”  and  if  necessary,  to  organise  specific 
invitations to tender; 

3. 

The seat of the Joint Undertaking shall be located in Brussels. 

Article 2 
Legal status 

1. 

2. 

3. 

The  Joint  Undertaking  shall  have legal personality.  In  every Member State,  it  shall 
enjoy the most extensive legal capacity accorded to legal persons under that State’s 
law. It may, in particular, acquire or dispose of movable and immovable property and 
may be a party to legal proceedings. 

The Joint Undertaking shall be recognised as an international organisation within the 
meaning  of  the  second  indent  of  Article  15(10)  of  Directive  77/388/EEC  and  the 
second indent of Article 23(1) of Directive 92/12/EEC. 

The  Joint  Undertaking  shall  be  exempt  from  taxation  by  the  Member  States  as 
regards taxes other than VAT and excise duty. In particular, it shall be exempt from 
the payment of registration fees and corporate or similar taxes. Salaries paid to staff 
of the Joint Undertaking shall be exempt from any national income tax. 

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Article 3 
Statutes of the Joint Undertaking 

1. 

2. 

The  statutes  of  the  Joint  Undertaking,  as  set  out  in  the  Annex  hereto,  are  hereby 
adopted. 

The statutes may be modified in accordance to the procedure referred to in paragraph 
2 of Article 5, and in particular Articles 3, 4, 5, 6 and 8 thereof. 

Article 4 
Sources of financing 

1. 

The financing of the Joint Undertaking shall come from: 

a) 

b) 

contributions from its members in accordance with Article 1 of its statutes and 

a possible levy on the air navigation charges within the meaning of the second 
indent of Article 15(3)(e)  of Regulation (EC) No 550/2004. The Commission 
shall  define,  in  accordance  to  the  procedure  referred  to  in  paragraph  4  of 
Article 15 of Regulation (EC) No 550/2004, the procedures for collecting and 
using the this levy. 

2. 

3. 

1. 

2. 

The  Community’s  contribution  can  be  paid  from  the  budget  of  the  research  and 
technological  development 
framework 
programmes. 

trans-European  networks 

and 

the 

All  Community  financial  contributions  to  the  Joint  Undertaking  shall  cease  upon 
expiry of the period mentioned in Article 1. 

Article 5 
Committee 

The  Single  Sky  Committee,  established  by  Article  5  of  Regulation  (EC)  No 
549/2004, hereinafter referred to as “the Committee”, shall be informed on a regular 
basis about its work. To this end, the Commission shall put the SESAR project as an 
item on the agenda of the Committee’s meetings. 

Where  reference  is  made  to  this  paragraph,  Articles  5  and  7  of  Decision 
1999/468/EC  shall  apply.  The  period  laid  down  in  Article  5(6)  of  Decision 
1999/468/EC shall be set at one month. 

Article 6 
Assessment 

Every three years from the start of the activities of the Joint Undertaking and upon expiry of 
the  term  of  the  Joint  Undertaking,  the  Commission  shall  carry  out  assessments  on  the 
implementation  of  this  Regulation,  the  results  obtained  by  the  Joint  Undertaking  and  its 
working methods. 

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Article 7 
Entry into force 

This  Regulation  shall  enter  into  force  on  the  day  following  that  of  its  publication  in  the 
Official Journal of the European Union. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels, 

For the Council 
The President 

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ANNEX  

Statutes of the Joint Undertaking 

Article 1 
Members 

1. 

The following shall be founding members of the Joint Undertaking: 

–  the European Community, represented by the European Commission (hereinafter 

referred to as “the Commission”); 

–  the  European  Organisation  for  the  Safety  of  Air  Navigation  (Eurocontrol), 

represented by its Agency (hereinafter referred to as “Eurocontrol”). 

2. 

The following may become members of the Joint Undertaking: 

–  the European Investment Bank; 

–  third countries, in particular those that have concluded at least one agreement with 

the European Community in the field of air transport; 

–  any other public or private undertaking or body. 

3. 

Any  request  for  accession  pursuant  to  paragraph  2  shall  be  addressed  to  the 
Executive Director, who shall transmit it to the Administrative Board. 

The Administrative Board shall decide whether to accept or reject the request. If the 
request is accepted, the Executive Director shall negotiate the conditions of accession 
and  submit  them  to  the  Administrative  Board.  These  conditions  may  include,  in 
particular, provisions relating to the financial contributions and representation within 
the Administrative Board. 

4. 

Membership of the Joint Undertaking may not be transferred to a third party unless 
the prior and unanimous agreement of the Administrative Board is given. 

Article 2 
Organs of the Joint Undertaking 

The  organs  of  the  Joint  Undertaking  shall  be  the  Administrative  Board  and  the  Executive 
Director. 

Article 3 
Composition of the Administrative Board 

1. 

The Administrative Board shall be composed of: 

a) 

a representative from each of the members of the Joint Undertaking; 

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24 

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b) 

an airspace users’ representative; 

c) 

a navigation service providers’ representative; 

d) 

an equipment manufacturers’ representative; 

e) 

f) 

an airports’ representative; 

a  representative  from  the  bodies  representing  staff  in  the  air  traffic 
management sector; 

The representatives referred to in points (b), (c), (d), (e) and (f) of paragraph 1 are 
designated by the Industry Consultation Body, set up in accordance with Article 6 of 
Regulation (EC) No 549/2004. 

Article 4 
Voting in the Administrative Board 

The  representatives  referred  to  in  points  (a)  and  (b)  of  Article  3(1)  shall  have  the 
right to vote. 

The members of the Joint Undertaking shall have a number of votes in proportion to 
their  contribution  to  the  funds  of  the  Joint  Undertaking.  However,  the  Community 
and Eurocontrol shall each have at least 30% of the total number of votes and the air 
passengers’ representative referred to in point (b) of Article 3(1) shall have at least 
10% of the total number of votes. 

Decisions of the Administrative Board shall be adopted by a simple majority of the 
votes cast unless otherwise provided for in these statutes. 

If the votes are evenly divided, the Community shall have the casting vote. 

Any  decision  relating  to  the  accession  of  new  members  -  within  the  meaning  of 
paragraph  2  of  Article  1  -  the  appointment  of  the  Executive  Director  and  the 
dissolution  of  the  Joint  Undertaking  shall  require  the  positive  opinion  of  the 
Community’s representative on the Administrative Board. 

2. 

1. 

2. 

3. 

4. 

5. 

Article 5 
Tasks and meetings of the Administrative Board 

1. 

In particular, the Administrative Board shall be responsible for: 

a) 

giving guidelines and taking the decisions necessary for the implementation of 
the SESAR project and exercising overall control over its implementation; 

b) 

deciding on the accession of new members; 

c) 

d) 

appointing the Executive Director and approving the organisation chart; 

deciding  on  the  amounts  and  procedures  for  paying  members’  financial 
contributions; 

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25 

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e) 

f) 

g) 

h) 

i) 

j) 

k) 

l) 

adopting the financial regulations of the Joint Undertaking; 

approving the three-year business plan and the annual work programme of the 
Joint  Undertaking  referred  to  in  Article  15(1)  and  (2)  as  well  as  the  annual 
budget, including the staff establishment plan; 

approving the annual accounts and balance-sheet; 

adopting the annual report on the progress of the SESAR project referred to in 
Article 15(3); 

deciding  on  any  acquisition,  sale  and  mortgaging  of  land  and  other  property 
rights, as well as on the giving of any sureties or guarantees, the taking-out of 
shares in other undertakings or institutions, on any granting or taking of loans 
and on the dissolution of the Joint Undertaking; 

establishing procedures for granting rights of access to tangible and intangible 
assets which are the property of the Joint Undertaking; 

laying down the rules and procedures for awarding the contracts necessary to 
implement “the plan”; 

approving  any  proposal  involving  significant  changes  in  the  execution  of  the 
SESAR project and in the work programme; 

m) 

exercising  such  other  powers  and  performing  such  other  functions,  including 
the establishment of subsidiary bodies, as may be necessary for the purposes of 
the SESAR project. 

2. 

The  Administrative  Board  shall  meet  at  least  twice  a  year.  Extraordinary  meetings 
shall  be  convened  at  the  request  of  either  one-third  of  the  members  of  the 
Administrative Board representing at least 30% of the voting rights, at the request of 
the Community or of the Executive Director. 

The meetings shall normally take place at the seat of the Joint Undertaking. 

Unless otherwise decided in particular cases, the Executive Director shall participate 
in the meetings. 

3. 

The Administrative Board shall adopt its rules of procedure. 

Article 6 
Executive Director 

1. 

2. 

The  Executive  Director  shall  be  responsible  for  the  day-to-day  management  of  the 
Joint  Undertaking  and  is  its  legal  representative.  He  shall  be  appointed  by  the 
Administrative  Board  on  a  proposal  from  the  European  Commission.  He  shall 
perform his duties with complete independence. 

The  Executive  Director  shall  direct  the  execution  of  the  SESAR  project  within  the 
guidelines established by the Administrative Board to which he shall be responsible. 

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He  shall  provide  the  Administrative  Board  with  all  information  necessary  for  the 
performance of its functions. 

3. 

The Director shall in particular: 

a) 

employ, manage and supervise the staff of the Joint Undertaking, including the 
staff referred to in Article 7(4); 

b) 

organise, manage and supervise the activities of the Joint Undertaking; 

c) 

d) 

e) 

f) 

g) 

h) 

i) 

j) 

submit  to the Administrative Board his proposals concerning the organisation 
chart; 

draw  up  and  regularly  update  the  business  plan  and  the  annual  work 
programme  of  the  Joint  Undertaking,  and  submit  them  to  the  Administrative 
Board; 

draw  up  the  draft  annual  budget,  including  the  staff  establishment  plan,  and 
submit them to the Administrative Board; 

ensure  that  the  obligations  of  the  Joint  Undertaking,  with  regard  to  the 
contracts and agreements it concludes, are met; 

ensure that the activities of the Joint Undertaking are carried out with complete 
independence and without any conflicts of interest; 

draw up the annual report on the progress of the SESAR project and submit it 
to the Administrative Board; 

submit the annual accounts and balance-sheet to the Administrative Board; 

submit to the Administrative Board any proposal involving a significant change 
in the design of the SESAR project. 

Article 7 
Staff of the Joint Undertaking 

1. 

2. 

3. 

4. 

The staff complement shall be determined in the establishment plan that will be set 
out in the annual budget. 

The  members  of  the  staff  of  the  Joint  Undertaking shall have a fixed-term contract 
based  on  the  conditions  of  employment  of  other  servants  of  the  European 
Communities. 

All staff expenditure shall be borne by the Joint Undertaking. 

Any  member  of  the  Joint  Undertaking  may  propose  to  the  Executive  Director  to 
second members of its staff to the Joint Undertaking. If this proposal is accepted, the 
costs relating to this shall be borne by this member and may constitute a contribution 
in kind within the meaning of Article 11(5). 

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Staff  seconded  to  the  Joint  Undertaking  must  act  with  complete  independence  and 
under the supervision of the Executive Director. 

5. 

The  Administrative  Board  shall  adopt  the  arrangements  for  implementing  this 
Article. 

Article 8 
Agreements 

In  order  to  carry  out  the  tasks  defined  in  Article  1  of  the  present  Regulation,  the  Joint 
Undertaking shall conclude an agreement with Eurocontrol by which: 

a) 

b) 

1. 

2. 

3. 

Eurocontrol shares the results of the definition phase with the Joint Undertaking; 

Eurocontrol  is  given  responsibility  for  the  following  tasks,  which  result  from 
implementing “the plan”, as well as the management of the relevant funds: 

i) 

ii) 

organising  research,  development  and  validation  activities  in  accordance  with 
the work programme of the Joint Undertaking; 

overall management responsibility of the common developments for the future 
system; 

iii)  monitoring “the plan” and proposing possible amendments to it; 

iv) 

updating  convergence  indicators  (European  convergence  and  implementation 
plan, local convergence and implementation plan); 

v) 

liaison with the International Civil Aviation Organisation. 

Article 9 
External contracts 

Notwithstanding  the  provisions  of  Article  8,  the  Joint  Undertaking  may  conclude 
service  and  supply  contracts  with  undertakings  or  a  consortium  of  undertakings,  in 
particular to carry out the tasks provided for in Article 1(2) of the present Regulation. 

The  Joint  Undertaking  shall  ensure  that  the  contracts  referred  to  in  paragraph  1 
provide  for  the  right  of  the  Commission  to  carry  out,  on  behalf  of  the  Joint 
Undertaking, controls in order to ensure that the financial interests of the Community 
are protected. 

The  contracts  referred  to  in  paragraph  1  shall  include  all  appropriate  provisions 
relating to the intellectual property rights referred to in Article 17. In order to avoid 
any  conflict  of  interests,  members  involved  in  defining  work  that  is  subject  to  an 
invitation  to  tender,  including  their  staff  seconded  under  Article  7(4),  cannot  take 
part in carrying out this work. 

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Article 10 
Working groups 

In order to carry out the tasks provided for in Article 1 of the present Regulation, the 
Joint  Undertaking  can  set  up  a  limited  number  of  working  groups  to  carry  out 
activities which are not already being carried out elsewhere. These groups shall rely 
on the expertise of professionals in the air traffic management sector and shall work 
in a transparent manner. 

The experts who take part in the working groups shall not belong to the staff of the 
Joint Undertaking. 

The working groups shall be chaired by a representative of the Joint Undertaking. 

Article 11 
Financial provisions 

The  revenue  of the Joint  Undertaking shall  come from  members’ contributions and 
from a possible levy on the air navigation charges within the meaning of the second 
paragraph of Article 15(3)(e) of Regulation (EC) No 550/2004. 

In order to start up the work of the  Joint Undertaking, the founding members shall 
pay  a  minimum  initial  contribution  of  EUR  10  million  within  a  period  of  one  year 
from the establishment of the Joint Undertaking. 

The  members  referred  to  in  the  second  and  third  indents  of  Article  1(2)  shall 
undertake to pay a minimum initial contribution of EUR 10 million within a period 
of  one  year  from  when  their  accession  to  the  Joint  Undertaking  is  accepted.  This 
amount shall be reduced to EUR five million for members that subscribe to the Joint 
Undertaking within 12 months of its constitution. 

In  the  case  of  undertakings,  subscribing  individually  or  collectively,  which  may  be 
regarded  as  small  or  medium-sized  enterprises  within  the  meaning  of  the 
Commission recommendation of 6 May 2003 concerning the definition of small and 
medium-sized enterprises25, this amount shall be reduced to EUR 250 000 regardless 
of when they become members. 

The  Administrative  Board  shall  decide  on  the  amounts  which  must  be  released  by 
each member in proportion to the contributions which it has agreed to pay and shall 
establish the deadline by which the members must pay their contributions. 

Contributions  in  kind  are  possible.  They  shall  be  subject  to  an  evaluation  of  their 
value and their utility for carrying out the tasks of the Joint Undertaking. 

The  Administrative  Board  shall  propose  to  the  Commission  the  level  and  the  cost-
base of the levy on the air navigation charges referred to in paragraph 1. 

1. 

2. 

3. 

1. 

2. 

3. 

4. 

5. 

6. 

25 

OJ L 124, 20.05.2003, p. 36 

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29 

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7. 

1. 

2. 

1. 

2. 

3. 

Any member of the Joint Undertaking that fails to meet its commitments concerning 
the  contributions  in  kind  or  does  not  release  the  amount  due  within  the  prescribed 
time-limit  shall  be,  for  six  months  following  the  expiry  of  this  time-limit, 
disqualified  from  voting  in  the  Administrative  Board  until  such  time  as  its 
obligations  have  been  met.  Upon  expiry  of  this  period  of  six  months,  if  the 
obligations have still not been met, membership shall be repealed. 

Article 12 
Revenue 

All  the  revenue  of  the  Joint  Undertaking  shall  be  applied  to  promoting  the  tasks 
defined in Article 1 of the present Regulation. Subject to Article 23, no payment by 
way of division of any excess revenue over expenditure shall be paid to the members 
of the Joint Undertaking. 

the  Community’s 
regulatory  provisions  applicable 
Notwithstanding 
contribution, any interest yielded by the contributions paid by its members shall be 
considered to be revenue of the Joint Undertaking. 

the 

to 

Article 13 
Financial regulations 

The  financial  regulations  of  the  Joint  Undertaking  shall  be  adopted  by  the 
Administrative Board. 

The  purpose  of  the  financial  regulations  is  to  ensure  the  economic  and  sound 
financial management of the Joint Undertaking. 

The financial regulations should respect the broad principles laid down in Regulation 
(EC, Euratom) No 2343/2002, and shall in particular include the main rules on: 

a) 

the  presentation  and  structure  of  the  SESAR  project  cost  estimates  and  the 
annual budget; 

b) 

the implementation of the annual budget and internal financial control; 

c) 

d) 

e) 

the  method  of  payment  of  contributions  by  the  members  of  the  Joint 
Undertaking; 

the keeping and presentation of accounts and inventory records as well as the 
drawing up and presentation of the annual balance-sheet; 

the procedure regarding calls for tender, based on non-discrimination between 
the  countries  of  the  members  of  the  Joint  Undertaking  and  the  Community 
character  of  the  project,  the  award  and  the  terms  and  conditions  of  contracts 
and orders on behalf of the Joint Undertaking. 

4. 

The detailed implementing rules enabling the Commission to ensure compliance with 
its  obligations  pursuant  to  Article  274  of  the  Treaty  establishing  the  European 

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30 

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Community shall be set out in an agreement between the Joint Undertaking and the 
Commission. 

Article 14 
Implementation and control of the budget 

The financial year shall correspond to the calendar year. 

Before  31  March  of  each  year,  the  Director  shall  transmit  to  the  members  the  cost 
estimates of the SESAR project as approved by the Administrative Board. 

The  project  cost  estimates  shall  include  a  forecast  of  annual  expenditure  for  the 
following two years. Within this forecast, the estimates of revenue and expenditure 
for the first of those two financial years (preliminary draft budget) shall be drawn up 
in  such  detail  as  is  necessary  for  the  internal  budgetary  procedure  of  each  member 
regarding  its  financial  contributions  to  the  Joint  Undertaking.  The  Director  shall 
supply the members with all supplementary information needed for this purpose. 

The  members  shall  forthwith  communicate  to  the  Director  their  comments  on  the 
project cost estimates, and in particular on the estimates of revenue and expenditure 
for the following year. 

Based on the approved project cost estimates, and taking into account the comments 
received from members, the Director shall prepare the draft budget for the following 
year and submit it to the Administrative Board for adoption before 30 September. 

Within  two  months  of  the  end  of  each  financial  year,  the  Director  shall  submit  the 
annual accounts and balance-sheets for the preceding year to the Court of Auditors of 
the  European  Communities.  The  audit  executed  by  the  Court  of  Auditors  shall  be 
based on records and performed on the spot. 

The Director shall present the annual accounts and balance-sheet, together with the 
report  of  the  Court  of  Auditors,  to  the  Administrative  Board  for  approval  by  a 
majority  of  75%  of  the  votes  cast.  The  Director  is  entitled  and,  if  requested  by  the 
Administrative Board, obliged to comment on the report. 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

The Court of Auditors shall send its report to the members of the Joint Undertaking. 

Article 15 
Documents to be drawn up 

1. 

2. 

3. 

The  business  plan  shall  specify  the  plan  for  the  execution  of  all  elements  of  the 
SESAR project. It shall cover three year periods and be updated regularly. 

The  annual  work  programme  shall  be  drawn  up  each  year  for  a  period  of  twelve 
months and shall describe the activities, timetable and costs of the Joint Undertaking 
over this period. 

The annual report shall show the progress of the SESAR project, in particular with 
regard to the timetable, costs and performance of this project. 

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Article 16 
Protection of the financial interests of the Community 

1. 

2. 

The  Commission  shall  have  the  right  to  ensure  that  the  financial  interests  of  the 
Community are protected by carrying out effective controls. Should the Commission 
discover  any  irregularities,  it  shall  reserve  the  right  to  reduce  or  suspend  any 
subsequent payment to the Joint Undertaking. 

The reduced or suspended amount pursuant to paragraph 1 shall be equivalent to the 
amount of the irregularities actually discovered by the Commission. 

Article 17 
Property rights 

The Joint Undertaking shall own all the tangible and intangible assets created or transferred to 
it for the implementation phase of the SESAR project. 

Article 18 
Transparency and treatment of documents 

The  Administrative  Board  shall  adopt  rules  on  the  treatment  of  documents  in  order  to 
reconcile  the  requirements  of  security,  commercial  secrecy,  and  public  access.  These  rules 
shall take into account, where appropriate, the principles and limits laid down in Regulation 
(EC) No 1049/2001 of the European Parliament and of the Council26. 

Article 19 
Anti-fraud measures 

1. 

2. 

3. 

For  the  purposes  of  combating  fraud,  corruption  and  other  illegal  acts,  Regulation 
(EC) No 1073/1999 of the European Parliament and of the Council27 shall apply. 

The  Joint  Undertaking  shall  accede  to  the  Interinstitutional  Agreement  of  25  May 
1999 between the European Parliament, the Council of the European Union and the 
Commission of the European Communities concerning internal investigations by the 
European  Anti  Fraud  Office  (OLAF)28  and  shall  forthwith  issue  the  appropriate 
provisions applicable to all employees of the Joint Undertaking. 

The  Court  of  Auditors  and  OLAF  may,  if  necessary,  carry  out  on-the-spot  checks 
among  the recipients of the Joint Undertaking’s funding and the agents responsible 
for allocating it. 

26 
27 
28 

OJ L 145, 31.05.2001, p. 43. 
OJ L 136, 31.05.1999, p. 1. 
OJ L 136, 31.05.1999, p. 15. 

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Article 20 
Liability 

1. 

2. 

3. 

4. 

The Joint Undertaking shall be solely responsible for meeting its obligations. 

The contractual liability of the Joint Undertaking shall be governed by the relevant 
contractual provisions and the law applicable to the contract in question. 

Any  payment  by  the  Joint  Undertaking  for  covering  the  liability  referred  to  in 
paragraph  2  and  the  costs  and  expenses  incurred  in  connection  therewith  shall  be 
considered expenditure of the Joint Undertaking. 

The  Executive  Director  shall  propose  to  the  Administrative  Board  to  take  out  any 
necessary insurance, and the Joint Undertaking shall take out such insurance as the 
Administrative Board may request. 

Article 21 
Confidentiality 

The Joint Undertaking shall ensure the protection of sensitive information, the non-authorised 
disclosure  of  which  could  damage  the  interests  of  the  contracting  parties.  It  shall  apply  the 
principles and minimum standards of security defined and implemented by Council Decision 
2001/264/EC29. 

Article 22 
Operational period of the Joint Undertaking 

1. 

The  Joint  Undertaking  shall  be  established  for  a  period  ending  on  31  December 
2013. 

According to the progress made in achieving  the tasks  of the Joint Undertaking, as 
defined  in  Article  1  of  the  present  Regulation,  that  period  may  be  reduced  or 
extended by amending these statutes. 

2. 

According to the progress made in achieving the objectives of the business plan and 
its updates, upon expiry of the period referred to in paragraph 1, the transfer by the 
Joint Undertaking of all or part of the tangible and intangible assets that it owns to 
another body shall be proposed by the Commission to the Council. 

Article 23 
Dissolution of the Joint Undertaking 

For the purpose of conducting the proceedings involved in winding up the Joint Undertaking, 
the  Administrative  Board  shall  appoint  one  or  more  liquidators,  who  shall  comply  with  the 
decisions of the Administrative Board. 

29 

OJ L 101, 11.4.2001, p. 1. Decision as last amended by Decision 2005/571/CE (OJ L 193, 23.7.2005, p. 
31). 

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Article 24 
Applicable law 

The  law  of  the  State  where  the  seat  of  the  Joint  Undertaking  is  located  shall  apply  in  any 
matter not covered by these statutes. 

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LEGISLATIVE FINANCIAL STATEMENT 

1. 

NAME OF THE PROPOSAL: 

Proposal  for  a  Council  Regulation  on  the  establishment  of  a  Joint  Undertaking, 
SESAR. 

2. 

ABM / ABB FRAMEWORK 

Policy Area(s) concerned and associated Activity/Activities: 

Activity: “Inland, air and maritime transport” 

Objective:  “To  ensure  the  implementation  of  the  internal  market  in  transport 
services" 

3. 

BUDGET LINES 

3.1. 

Budget  lines  (operational  lines  and  related  technical  and  administrative 
assistance lines (ex- B.A lines)) including headings : 

According to current coding: 

06.0301  -  Financial  support  for  projects  of  common  interest  in  the  trans-European 
transport network 

06.0601 - Research related to energy and transport – Aeronautics and space 

3.2. 

Duration of the action and of the financial impact: 2007-2013 

3.3. 

Budgetary characteristics (add rows if necessary): 

Budget 
line 

06.0301 

06.0601 

Expenditure type 

New 

EFTA 
contribution 

Contributions 
from applicant 
countries 

Heading in 
financial 
perspective 

Non-
comp 

Non-
comp 

Diff30 

NO 

YES 

Diff 

NO 

YES 

NO 

NO 

No 1A 

No 1A 

30 

Differentiated appropriations 

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4. 

SUMMARY OF RESOURCES 

4.1. 

Financial Resources 

4.1.1. 

Summary of commitment appropriations (CA) and payment appropriations (PA) 

Any amendment to the annual amounts charged to the Community budget will have 
to  be  approved  during  discussions  relating  to  the  budgetary  procedure  of  the  year 
concerned and be below the ceilings approved for the “projects of common interest” 
when the decisions are taken on proposal COM(2004) 475 final. 

Expenditure type 

Sectio
n 
No 

Year 
2007 

2008 

2009 

2010 

2011 

2012  
and later 

Total 

EUR million (to 3 decimal places) 

Operational expenditure31 

Commitment 
Appropriations (CA) 

8.1 

a 

06.0301 

06.0601 

3.000 

50.000 

50.000 

50.000 

50.000 

100.000

303.000

0 

50.000 

50.000 

50.000 

50.000 

100.000

300.000

Payment 
Appropriations (PA) 

b 

06.0301 

06.0601 

2.000 

26.000 

50.000 

50.000 

50.000 

125.000

303.000

0 

25.000 

50.000 

50.000 

50.000 

125.000

303.000

Administrative expenditure within reference amount32 

Technical & 
administrative 
assistance (NDA) 

8.2.4 

c 

= 

= 

= 

= 

= 

= 

= 

TTOOTTAALL  RREEFFEERREENNCCEE  AAMMOOUUNNTT 

Commitment 
Appropriations 

Payment 
Appropriations 

a+c 

b+c 

3.000 

100.00
0 

2.000 

51.000 

100.00
0 

100.00
0 

100.00
0 

100.00
0 

100.000 

200.000

603.000

100.000 

250.000

603.000

Administrative expenditure not included in reference amount334 

Total indicative financial cost of intervention 

31 
32 
33 

Expenditure that does not fall under Chapter 06 01 of the Title 06 concerned. 
Expenditure within Article 060104 of Title 06 
Expenditure within Chapter 06 01 other than Articles 060104 or 060105. 

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8.2.5 

d 

0.389 

0.281 

0.281 

0.281 

0.281 

0.562

2.075

8.2.6 

e 

pm 

pm 

pm 

0.200 

pm 

0.400

0.600

a+c
+d+
e 

b+c
+d+
e 

3.389 

100.28
1 

100.28
1 

100.48
1 

100.281 

200.962

605.675

2.389 

51.281 

100.28
1 

100.48
1 

100.281 

250.962

605.675

Human  resources  and 
associated  expenditure 
(NDA) 

than 

Administrative 
costs, 
other 
human 
and 
resources 
associated  costs,  not 
included 
in  reference 
amount (NDA) 

TOTAL  CA  including 
cost 
Human 
of 
Resources 

TOTAL  PA  including 
Human 
of 
cost 
Resources 

Co-financing details 

If  the  proposal  involves  co-financing  by  Member  States,  or  other  bodies  (please  specify 
which),  an  estimate  of  the  level  of  this  co-financing  should  be  indicated  in  the  table  below 
(additional  lines  may  be  added  if  different  bodies  are  foreseen  for  the  provision  of  the  co-
financing): 

EUR million (to 3 decimal places) 

Year 
2007 

2008 

2009 

2010 

2011 

2012 
and later 

Total 

3.000 

100.000 

100.000 

100.000 

100.000 

200.000

603.000

0 

100.000 

100.000 

100.000 

100.000 

200.000

600.000

Co-financing body 

EUROCONTROL 

Other members of the 
Joint Undertaking and 
levy on the navigation 
charge* 

f 

TOTAL  CA  including 
co-financing 

a+c+d
+e+f 

6,389 

300.281 

300.281 

300.481 

300.281 

601.162

1 808.875

4.1.2.  Compatibility with Financial Programming 

The  Community  financing  proposed  is  compatible  with  proposal  COM(2004)  487 
final subject to the final agreement on the 2007-2013 financial perspective. 

The reference amounts charged to the TEN and RTD programmes are included in the 
amounts of proposals COM(2004) 475 final and COM(2005) 119. 

(cid:133) 

Proposal is compatible with existing financial programming. 

EN 

37 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(cid:133) 

(cid:133) 

Proposal  will  entail  reprogramming  of  the  relevant  heading  in  the  financial 
perspective. 

Proposal  may  require  application  of  the  provisions  of  the  Interinstitutional 
Agreement34 (i.e. flexibility instrument or revision of the financial perspective). 

4.1.3.  Financial impact on Revenue 

(cid:55)  Proposal has no financial implications on revenue 

(cid:133) 

Proposal has financial impact – the effect on revenue is as follows: 

NB: All details and observations relating to the method of calculating the effect on 
revenue should be shown in a separate annex. 

Budget line 

Revenue 

EUR million (to one decimal place) 

Situation following action 

[Yea
r n] 

[n+1] [n+2] [n+3

] 

[n+4]  [n+5]

35 

Prior to 
action 
[Year 
n-1] 

a) Revenue in absolute terms

b) Change in revenue 

 ∆ 

(Please specify each revenue budget line involved, adding the appropriate number of 
rows to the table if there is an effect on more than one budget line.) 

4.2. 

Human Resources FTE (including officials, temporary and external staff) – see 
detail under point 8.2.1. 

Annual requirements 

Year 
2007 

2008 

2009 

2010 

2011 

2012 and later 

Total number of 
human resources 

4 

3 

3 

3 

3 

3 per year 

5. 

CHARACTERISTICS AND OBJECTIVES 

Details of the context of the proposal are required in the Explanatory Memorandum. 
This  section  of  the  Legislative  Financial  Statement  should  include  the  following 
specific complementary information: 

34 
35 

See points 19 and 24 of the Interinstitutional agreement. 
Additional columns should be added if necessary i.e. if the duration of the action exceeds 6 years. 

EN 

38 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
5.1. 

Need to be met in the short or long term 

The  SESAR  project  is  composed  of  a  definition  phase  (2004-2007)  and  an 
implementation  phase  (2008-2020)  in  two  stages:  development  (2008-2013)  and 
deployment (2014-2020). The exact scope of the implementation phase will depend 
on  the  definition  phase.  The  Joint  Undertaking  will  be  involved  only  in  the 
development  activities  of 
implementation  phase.  The  Commission 
communication on SESAR includes further details on this point.  

the 

5.2. 

Value-added  of  Community  involvement  and  coherence  of  the  proposal  with 
other financial instruments and possible synergy 

The  Community  is  already  co-financing,  with  Eurocontrol,  the  definition  phase  as 
part of the TEN-Transport programme. Without the Community’s participation, this 
phase  would  not  have  been  able  to  be  launched  or  it  would  have  been  seriously 
delayed which might have compromised the project. 

The  participation  of  the  public  authorities  in  the  implementation  phase  adds  a 
strategic and institutional dimension to the project. It is fully in line with the Lisbon 
strategy in that it creates a public-private partnership in the field of research. As the 
regulatory  authority,  the  Commission  ensures  consistency  with  the  single  sky 
legislation and ensures quick and efficient decision-making which is essential for the 
modernisation of air traffic management in Europe.  

The financial participation of the Community is an important incentive for industry 
which would not be able to finance the modernisation of the system on its own at the 
same time as bearing the operational cost of the current system. 

5.3. 

Objectives, expected results and related indicators of the proposal in the context 
of the ABM framework 

The  SESAR  project  is  in  line  with  the  ABM  objective  of  “completing  the  internal 
market  in  energy  and  transport  services  and  ensuring  its  implementation”  of  the 
activity “Inland, air and maritime transport”. 

The  objective  of  the  SESAR  project  is  to  modernise  the  European  air  traffic 
management  system.  The  objective  of  the  Joint  Undertaking  is  to  organise  and 
coordinate  the  project  by  combining  research  and  development  efforts  in  the 
European Community.  

The definition phase of the project is currently under way and will produce in 2007 
the plan for the modernisation of air traffic management in Europe. This plan will 
provide  the  key  elements  for  defining  the  operational  objectives  of  the  Joint 
Undertaking.  The  plan  will  define  the  performance  needs  of  the  new  system  for 
2020  and  beyond  and  will  identify  solutions  for  the  creation  of  a  standardised  and 
fully interoperable air traffic management system. It will define the work programme 
for the research, development and validation activities as well as a detailed plan, in 
terms of costs and priorities, of the development and deployment phases.  

Consequently,  it  will  not  be  possible  to  define  operational  objectives  and  precise 
indicators before the modernisation plan has been drawn up. 

EN 

39 

   EN 

 
Nevertheless, we can already identify “specific” objectives: 

–  Establishing  the  Joint  Undertaking,  setting  up  the  management  bodies  and 

recruiting staff; 

–  Organising  and  coordinating  the  implementation  of  the  project,  in  accordance 

with the modernisation plan; 

–  Organising  the  research,  development,  validation  and  study  work  carried  out 

under its authority; 

–  Organising invitations to tender for the development of joint products. 

The  indicators  that  could  be  considered  at  this  stage  are:  the  establishment  of  the 
management  structure  (fitting  out  of  the  headquarters  (seat),  establishment  of  the 
Administrative Board, adoption of the rules of procedure and the financial regulation, 
recruitment of the Executive Director and staff); starting up activities (establishment 
of  work  programme,  conclusion  of  the  agreement  with  Eurocontrol,  calling  on  the 
financial  commitments  of  members);  continuing  activities  and  evaluating  them 
(attracting  new  members,  launching  calls  for  tender,  producing  reports  on  progress 
made, benchmarking with the United States). 

5.4.  Method of Implementation (indicative) 

Show below the method(s)36 chosen for the implementation of the action. 

(cid:55) Centralised Management 

(cid:55) Directly by the Commission 

(cid:133) Indirectly by delegation to: 

(cid:133) Executive Agencies 

(cid:133)  Bodies  set  up  by  the  Communities  as  referred  to  in  art.  185  of  the 

Financial Regulation 

(cid:133) National public-sector bodies/bodies with public-service mission 

(cid:133) Shared or decentralised management 

(cid:133) With Member states 

(cid:133) With Third countries 

(cid:133) Joint management with international organisations (please specify) 

36 

If  more  than  one  method  is  indicated  please  provide  additional  details  in  the  “Relevant  comments” 
section of this point 

EN 

40 

   EN 

 
                                                 
6. 

MONITORING AND EVALUATION 

6.1.  Monitoring system 

The  draft  statutes  of  the  Joint  Undertaking  provide  for  specific  measures  regarding 
internal control. 

6.2. 

Evaluation 

6.2.1.  Ex-ante evaluation 

The impact assessment attached to this proposal, based on a preparatory cost-benefit 
study carried out on the SESAR project and its governance, already provides most of 
the information required by an ex-ante evaluation on the establishment of the SESAR 
Joint Undertaking. 

However, for the reasons indicated in paragraph 5, the key elements for defining the 
operational  objectives  of  the  Joint  Undertaking  will  only  be  available  in  2007. 
Consequently, as it is not possible to carry out a comprehensive ex-ante evaluation at 
this stage of the project, the Commission will complete its evaluation at the end of 
the definition phase. 

6.2.2.  Measures taken following an intermediate/ex-post evaluation (lessons  learned from 

similar experiences in the past) 

Not applicable 

6.2.3.  Terms and frequency of future evaluation 

The internal evaluation of the Joint Undertaking is based on an annual report on the 
progress of the project. 

In  addition,  every  three  years  the  Commission  evaluates  the  implementation  of  the 
regulation and the results obtained. A final evaluation is also planned. 

7. 

ANTI-FRAUD MEASURES 

The statutes of the Joint Undertaking contain specific measures regarding anti-fraud 
measures. 

EN 

41 

   EN 

 
8. 

DETAILS OF RESOURCES 

8.1. 

Objectives of the proposal in terms of their financial cost 

(Headings of Objectives, 
actions and outputs 
should be provided) 

Type 
of 
outp
ut 

Av. cost 

Year 2007 

Year 2008 

Year 2009 

Year 2010 

Year 2011 

Year 2012 and 
later 

TOTAL 

No. 
outputs 

Tota
l 
cost 

No. 
outputs 

Tota
l 
cost 

No. 
outputs 

Tota
l 
cost 

No. 
outputs 

Tota
l 
cost 

No. 
outputs 

Tota
l 
cost 

No. 
outputs 

Total 
cost 

No. outputs 

Total 
cost 

Commitment appropriations in EUR million (to 3 decimal places) 

OBJECTIVE 
NO 137 

Establishment  of  the 
Joint Undertaking 

Sub-total Objective 1

= 

= 

1 

1 

OBJECTIVE 
NO 238 

Organise 
coordinate 
implementation 
the project 

and 
the 
of 

37 
38 

As described under Section 5.3 
As described under Section 5.3 

EN 

42 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Sub-total Objective 2

= 

= 

OBJECTIVE 
No 3 

Sub-total Objective 3 

= 

= 

OBJECTIVE 
No 4 

Organise 
tender 

calls 

for 

Sub-total Objective 4 

= 

= 

TOTAL COST

= 

= 

2 

0 

0 

3 

4 

4 

4 

4 

8 

26 

48 

48 

48 

48 

96 

288 

48 

48 

48 

48 

96 

100 

100 

100 

100 

200 

288 

603 

The  figures  given  in  table  8.1  are  indicative.  A  more  detailed  breakdown  by  objective  will  follow  from  the  definition  phase  of  the  project. 

EN 

43 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8.2. 

Administrative Expenditure 

8.2.1.  Number and type of human resources 

Types of post 

Staff to be assigned to management of the action using existing and/or additional 
resources (number of posts/FTEs) 

Year 
2007 

Year 2008 

Year 2009 

Year 2010 

Year 2011 

2012-2013 

Officials or 
temporary 
staff39 (06 01 
01) 

A*/
AD 

B*, 
C*/
AST 

Staff financed40 by Art. 
06 01 02 

Other  staff  financed41 
by Art. 06 01 04/05 

TOTAL 

2 

1 

1 

= 

4 

1 

1 

1 

= 

3 

1 

1 

1 

= 

3 

1 

1 

1 

= 

3 

1 

1 

1 

= 

3 

2 

2 

2 

= 

6 

8.2.2.  Description of tasks deriving from the action 

–  Preparatory work for the establishment of the Joint Undertaking; 

–  Liaison with the various political, economic, technical and social stakeholders; 

–  Management of Community grants. 

8.2.3. 

Sources of human resources (statutory) 

(When  more  than  one  source  is  stated,  please  indicate  the  number  of  posts 
originating from each of the sources) 

(cid:55)  2  Posts  currently  allocated  to  the  management  of  the  project  to  be  replaced  or 
extended 

(cid:133) Posts pre-allocated within the APS/PDB exercise for year n 

(cid:55) 1 Post to be requested in the next APS/PDB procedure 

1 Post to be redeployed using existing resources within the managing service 

(cid:55) 
(internal redeployment) 

39 
40 
41 

Cost of which is NOT covered by the reference amount. 
Cost of which is NOT covered by the reference amount. 
Cost of which is included within the reference amount. 

EN 

44 

   EN 

 
 
 
 
 
                                                 
Posts required for year n although not foreseen in the APS/PDB exercise of the 

(cid:133) 
year in question 

8.2.4.  Other administrative expenditure included in reference amount 

Expenditure on administrative management) 

(06 

01 

04/05 

– 

Not applicable 

Budget line 
(number and heading) 

EUR million (to 3 decimal places) 

Year 
n 

Year 
n+1 

Year 
n+2 

Year 
n+3 

Year 
n+4 

Year n+5 
and later 

TOTAL 

1.  Technical  and  administrative  assistance 
(including related staff costs) 

= 

= 

= 

= 

= 

= 

 Executive agencies42 

Other technical and administrative assistance 

= 

= 

= 

= 

= 

= 

= 

= 

- intra muros 

- extra muros 

Total Technical and administrative assistance 

0 

0 

0 

0 

0 

0 

0 

8.2.5.  Financial cost of human resources and associated costs not included in the reference 

amount 

Type of human resources 

Year 2007

Year 
2008 

Year 
2009 

Year 2010  Year 2011  Year 2012 
and later 

EUR million (to 3 decimal places) 

Officials and temporary staff (06 01 01) 

0.324 

0.216 

0.216 

0.216 

0.216 

Staff financed by Art. 06 01 02 

0.065 

0.065 

0.065 

0.065 

0.065 

0.432 

0.130 

Total cost of Human Resources and 
associated costs (NOT in reference 
amount) 

0.389 

0.281 

0.281 

0.281 

0.281 

0.562 

Calculation– Officials and Temporary agents 
Reference should be made to Point 8.2.1, if applicable 

Standard cost €108 000/year per agent 

Calculation – Staff financed under Art. 06 01 02 

Reference should be made to Point 8.2.1, if applicable 

42 

Reference should be made to the specific legislative financial statement for the Executive Agency(ies) 
concerned. 

EN 

45 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Cost of a seconded national expert 
Daily subsistence allowance 
Travel 
Administrative expenses 
Total 

41 000 
4 000 
19 985 
64 985 

€/year 
€/year 
€/year 
€/year 

8.2.6.  Other administrative expenditure not included in reference amount 

EUR million (to 3 decimal places) 

Year 
2007 

Year 
2008 

Year 
2009 

Year 
2010 

Year 
2011 

Year 
2012 
and 
later 

TOTAL 

06 01 02 11 01 – Missions ** 

pm 

pm 

pm 

pm 

pm 

pm 

pm 

06 01 02 11 02 – Meetings & Conferences 

06 01 02 11 03 – Committees43 

06 01 02 11 04 – Studies & consultations 

06 01 02 11 05 - Information systems 

2. Total Other Management Expenditure 

(06 01 02 11) 

3. Other expenditure of an administrative 
nature (specify including reference to 
budget line) 

evaluations 06.010503 - 06.010404*** 

Total  Administrative  expenditure,  other 
than  human  resources  and  associated 
costs 
reference 
included 
amount) 

(NOT 

in 

0.200 

0.600 

0.800 

0.200 

0.600 

0.800 

Calculation - Other administrative expenditure not included in reference amount: 

The missions of Commission staff assigned to the project will depend on the location 

** 
of the seat of the Joint Undertaking. 

*** 

two interim evaluations and one final one. 

Human resources and administrative requirements will be covered from the allocation given 
to the managing DG under the annual allocations procedure.  

43 

Specify the type of committee and the group to which it belongs. 

EN 

46 

   EN