Proposal for a Council Regulation amending Regulation (EC) No 1321/2004 on the establishment of structures for the management of the European satellite radio-navigation programmes
Date: 2006-06-02
Institutions: European Commission
Subjects: EU office or agency, EU programme, administrative structures, company structure, corporate finance, joint venture, legal status, operation of the Institutions, satellite navigation

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 2.6.2006 
COM(2006) 261 final 

2006/0090 (CNS) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 1321/2004 on the establishment of structures for the 
management of the European satellite radio-navigation programmes 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

CONTEXT OF THE PROPOSAL 

110 

Grounds for and objectives of the proposal 

The  purpose  of  this  proposal  is  to  amend  Council  Regulation  (EC)  No  1321/2004  to 
enable the European GNSS Supervisory Authority to complete the development phase 
of the Galileo programme after the Galileo Joint Undertaking is wound up. 

120 

General context 

1) 

The Galileo programme 

The  aim  of  the  Galileo  programme  is  to  put  in  place  the  first  global  satellite 
radionavigation  and  positioning  infrastructure  specifically  designed  for  civilian 
purposes. There are technological, political and economic aspects to the programme. 

The programme is divided into the following four successive phases: 

a definition phase, which ran from 1999 to 2001, during which the system architecture 
was designed and the services to be offered were identified; 

a development and validation phase, which was initially intended to run from 2002 to 
2005 and includes the development of the system's satellites and earth components as 
well as validation in orbit; 

a  deployment  phase,  which  was  initially  intended  to  cover  2006  and  2007,  involving 
the construction and launching of satellites as well as the full establishment of the earth 
segment of the infrastructure; 

an operating phase, which was initially intended to start in 2008 and which includes the 
management of the system as well as its regular maintenance and upgrading. 

2) 

The Supervisory Authority 

The European GNSS Supervisory Authority (the “Supervisory Authority”) was set up 
by  Council  Regulation  (EC)  No  1321/2004  of  12 July 2004  on  the  establishment  of 
structures  for  the  management  of  the  European  satellite  radionavigation programmes. 
Its  task  is  to  ensure  the  management  of  public  interests  relating  to  the  European 
satellite  radionavigation  programmes  Egnos  and  Galileo,  and  to  act  as  regulatory 
authority  in  this  connection  during  the  deployment  and  operational  phases  of  the 
Galileo programme. 

The tasks of the Supervisory Authority are laid down in Article 2 of Regulation (EC) 
No 1321/2004.  It  is,  in  particular,  the  licensing  authority  vis-à-vis  the  private 
concession-holder for the system, with which it will conclude the concession contract. 
It  should  be  noted  that  the  two  systems,  Egnos  and  Galileo,  will  be  owned  by  the 
Supervisory  Authority  and  that  their  ownership  will  remain  entirely  public:  only  the 
management  of  the  deployment  and  operation  phases  will  be  awarded  to  the 
concession-holder, for a period of about twenty years. In addition, under Article 3 of 

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the  Regulation,  the  Supervisory  Authority  will  be  the  owner  of  all  the  tangible  and 
intangible  assets  which  are  transferred  to  it  by  the  Galileo  Joint  Undertaking  on 
completion of the development phase and which may be created or developed by the 
concession-holder during the deployment and operation phases. 

The  Supervisory  Authority  has  been  gradually  established  since  the  summer  of  2005 
and will become fully operational in the course of 2006. 

3) 

The Galileo Joint Undertaking 

The Galileo Joint Undertaking was set up by Council Regulation (EC) No 876/2002 of 
21 May 2002, under Article 171 of the Treaty, to carry out the development phase and 
to prepare for the subsequent phases of the Galileo programme. Its founding members 
are the European Community and the European Space Agency. 

The  Galileo  Joint  Undertaking  has  two  main  tasks.  Firstly,  it  directs  and  coordinates 
the  necessary  research  and  development  activities.  To  this  end,  it  has  concluded  an 
agreement  with  the  European  Space  Agency,  to  which  the  carrying-out  of  these 
activities has been assigned. It also develops activities relating to the applications and 
services which Galileo may offer. Secondly, it manages the procedure for selecting the 
system's  future  concession-holder,  which  will  be  responsible  for  managing  the 
deployment and operation phases, providing the necessary private capital and ensuring 
the commercial success of operation. 

130 

Existing provisions in the area of the proposal 

The need to wind up the Galileo Joint Undertaking and transfer its activities to 

1) 
the Supervisory Authority before the completion of the development phase. 

The Galileo Joint Undertaking was set up to implement the development phase, and its 
lifetime is based on the duration of that phase, which was initially intended to cover the 
years 2002 to 2005 inclusive. However, as the Galileo programme currently stands, the 
development phase will not be completed before the end of 2008, and the lifetime of 
the Joint Undertaking would in theory need to be extended accordingly, with the result 
that it would not cease its activities before the end of 2008, i.e. three years later than 
originally planned. 

However,  extending  the  lifetime  of  the  Joint  Undertaking  beyond  2006  would  be 
pointless and costly, as the Supervisory Authority is in a position to take over all the 
activities that are currently being carried out by the Joint Undertaking in the course of 
2006  and  subsequently  complete  them.  It  would  be  tantamount  to  an  unjustified 
duplication of structures and costs, especially since the programme development phase 
will in all likelihood be more expensive than initially expected. 

Before the end of 2006, the Supervisory Authority will have the necessary resources, in 
particular in terms of staff, to complete the tasks of the Joint Undertaking, namely to 
complete  the  development  phase  and  prepare  for  the  subsequent  phases  of  the 
programme. To enable the Supervisory Authority to take over the activities of the Joint 
Undertaking in an optimum manner, it would be desirable for the two structures to co-
exist for a few months and for the Supervisory Authority to be closely associated with 
the activities of the Joint Undertaking during this period. The latter has experience and 

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knowledge which it is essential to pass on to the Supervisory Authority, in particular 
for the negotiations concerning the concession contract, which must be continued and 
completed  by  the  Joint  Undertaking  in  2006.  Provision  should  therefore  be  made  for 
the Galileo Joint Undertaking to cease its activities on 31 December 2006 and for the 
Supervisory Authority to gradually  take over  the Joint Undertaking’s  activities in the 
course  of  2006.  The 
these  activities  will  be  completed  by 
31 December 2006. 

transfer  of 

Transferring the Joint Undertaking’s activities to the Supervisory Authority will have 
an  impact  on  the  Community  budget  for  2006,  since  the  Supervisory  Authority  will 
have to perform extra tasks, in addition to those initially planned, in the course of that 
year.  An  increase  in  its  budget  should  therefore  be  considered.  The  increase  mainly 
concerns staff costs and staff-related costs arising from a recruitment drive. 

More  generally,  the  transfer  of  the  Joint  Undertaking’s  activities  to  the  Supervisory 
Authority will have only a minor effect on Community finances. It will be zero after 
2006, since in 2007 and 2008 the Supervisory Authority will perform the tasks that the 
Joint Undertaking would have had to carry out anyway. Where 2006 is concerned, the 
increase  to  be  provided  for  in  the  Supervisory  Authority’s  budget  will  be  offset  to  a 
large  extent  by  a  reduction  in  the  Joint  Undertaking’s  expenditure  as  and  when  its 
activities are taken over by the Supervisory Authority. The savings made by the Joint 
Undertaking  in  this  way  will  form  part  of  the  assets  transferred  to  the  Supervisory 
Authority to finance the development phase. 

2) 
The need to amend Regulation (EC) No 1321/2004 to ensure the continuity of 
the  Galileo  programme  and  the  smooth  transfer  of  the  Galileo  Joint  Undertaking’s 
activities to the Supervisory Authority. 

As  already  mentioned  earlier,  the  Supervisory  Authority  was  set  up  to  oversee  the 
deployment  and  operation  phases  of  the  Galileo  programme,  while  the  Galileo  Joint 
Undertaking  was  set  up  to  implement  the  development  phase.  This  emerges,  in 
particular, from recitals 5 and 6 of Regulation (EC) No 1321/2004. Consequently, the 
management of the development phase on behalf of the Joint Undertaking is not listed 
as  one  of  the  Supervisory  Authority’s  tasks  in  Article  2  of  Regulation  (EC) 
No 1321/2004. 

Accordingly,  to  ensure  the  optimum  completion  of  the  development  phase  of  the 
Galileo programme following the disbanding of the Galileo Joint Undertaking, i.e. after 
31  December  2006,  Article  2  should  be  amended  to  assign  to  the  Supervisory 
Authority the tasks entrusted to the Galileo Joint Undertaking prior to its disbanding. 
These  tasks  are  provided  for  in  Articles  2,  3  and  4  of  the  Statutes  of  the  Joint 
Undertaking  annexed  to  Council  Regulation  (EC)  No  876/2002.  They  include 
finalising  technological  developments  relating  to  the  system  on  the  basis  of  an 
agreement  to  be  concluded  with  the  European  Space  Agency,  supervising  the 
implementation  of  the  development  phase,  preparing  the  deployment  and  operation 
phases, and negotiating the concession contract. Provision should also be made for the 
possibility of the Administrative Board being responsible for the proceedings involved 
in winding up the Joint Undertaking after 31 December 2006 mentioned in Article 21 
of the Undertaking’s Statutes, should the Supervisory Authority so decide. 

In  addition,  the  current  wording  of  Article  2  does  not  explicitly  mention  research 

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activities.  However,  to  define  or  promote  future  satellite  radionavigation  applications 
and  prepare  for  the  next  generation  of  satellites,  for  example,  the  Supervisory 
Authority will need to undertake or finance a considerable amount of research during 
the programme development, deployment and operation phases. It should therefore be 
explicitly  specified  in  Article  2  that  the  Supervisory  Authority  can  carry  out  all 
research of benefit to the European GNSS programmes. This will make it possible, in 
particular,  to  cover  activities  carried  out  under  the  joint  research  and  development 
programmes. 

Consequently, the following two subparagraphs should be added to the current text of 
the  Article  2(1)  of  Regulation  (EC)  No  1321/2004  which  sets  out  the  tasks  of  the 
Supervisory Authority:  

“(k)  with  a  view  to  the  completion  of  the  development  phase  of  the  Galileo 
programme, it shall take over, no later than the end of the lifetime of the Galileo Joint 
Undertaking, the tasks assigned to the latter by Articles 2, 3 and 4 of the Statutes of the 
Joint  Undertaking  annexed  to  Council  Regulation  (EC)  No  876/2002.  It  shall,  where 
appropriate  and  acting  in  accordance  with  a  decision  by  the  Administrative  Board  of 
the  Galileo  Joint  Undertaking,  attend  to  the  proceedings  involved  in  winding  up  the 
Joint Undertaking after 31 December 2006; 

(l)  it  shall  carry  out  all  research  of  benefit  to  the  development  and  promotion  of  the 
European GNSS programmes.” 

Unless  these  amendments  are  made,  there  would  be  legal  uncertainty  regarding  the 
continuity  of  the  programme,  since  the  Supervisory  Authority  has  no  legal  basis  for 
taking over most of the activities currently being carried out by the Joint Undertaking 
or for carrying out the research needed. 

Moreover, the current wording of the first paragraph of Article 3 of Council Regulation 
(EC) No 1321/2004 is as follows: “The Authority shall be the owner of all the tangible 
and  intangible  assets  which  are  transferred  to  it  by  the  Galileo  Joint  Undertaking  on 
completion of the development phase.” This means that the Authority could not assume 
ownership of the system until the end of the development phase, i.e. at the end of 2008 
at the earliest, which is much later than the probable date of signature of the concession 
contract. In order to bring that Article into line with the abovementioned amendments 
to  the  Regulation,  the  provisions  in  question  need  to  be  amended  to  enable  the 
Supervisory Authority, after the disbanding of the Galileo Joint Undertaking, to assume 
ownership  of  the  tangible  and  intangible  assets  created  or  developed  both  before  its 
disbanding and during the development phase after its disbanding. 

In addition, to avoid any risk of differences of interpretation, the current provisions of 
the first  paragraph of  Article 3  should be amended in two respects. It is necessary to 
specify  that  tangible  and  intangible  assets  created  or  developed  by  the  concession-
holder during the deployment and operation phases include those created or developed 
by its subcontractors or by undertakings under its control or by their subcontractors. 

Likewise, it should be specified that the ownership of assets covers manufacturer’s and 
trade-mark rights and all other intellectual property rights as defined in Article 1(1) of 
Regulation (EC) No 772/2004. 

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Article 3(1) should therefore be replaced by the following text: 

“1. From the end of the lifetime of the Galileo Joint Undertaking, the Authority shall be 
the  owner  of  all  the  tangible  and  intangible  assets  created  or  developed  during  the 
entire development phase, including those owned by the Galileo Joint Undertaking in 
accordance  with  Article  6  of  its  Statutes  and  those  created  or  developed  by  the 
European  Space  Agency  and  by  entities  given  responsibility  by  the  latter  or  by  the 
Galileo Joint Undertaking for activities for the development of the programme. 

The  Authority  shall  be  the  owner  of  all  the  tangible  and  intangible  assets  created  or 
developed  by  the  concession-holder  during  the  deployment  and  operation  phases, 
including those created or developed by its subcontractors or by undertakings under its 
control or by their subcontractors. 

Ownership  rights  shall  cover  all  intellectual  property  rights  within  the  meaning  of 
Article  1(1)  of  Regulation  (EC)  No  772/2004,  and  in  particular  manufacturer’s  and 
trade-mark rights.”  

141 

Consistency with other EU policies and objectives 

Not applicable. 

CONSULTATION OF INTERESTED PARTIES AND IMPACT ANALYSIS 

Consultation of interested parties 

219 

Not applicable 

Collection and use of expertise 

No recourse to external expertise was necessary. 

Impact analysis 

229 

230 

There is no solution other than to amend the Regulation in order to achieve the desired 
result. 

The impact of the activities of the Galileo Joint Undertaking being taken over by the 
Supervisory Authority is low since the activities would have been carried out anyway.  

LEGAL ASPECTS OF THE PROPOSAL 

305 

Summary of the proposed measures 

The  Galileo  Joint  Undertaking  should  be  wound  up  on  31  December  2006  and  its 
activities transferred to the Supervisory Authority. To this end, it is necessary to amend 
Council  Regulation  (EC)  No  1321/2004  on  the  establishment  of  structures  for  the 
management of the European satellite radionavigation programmes. 

310 

Legal basis 

Article 308 of the Treaty. 

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329 

Subsidiarity principle 

The  proposal  concerns  an  area  that  falls  within  the  Community’s  exclusive 
responsibility. The principle of subsidiarity does not therefore apply. 

Proportionality principle 

The proposal complies with the principle of proportionality, for the following reasons: 

The proposed amendments do not go beyond what is necessary. 

They do not involve an increase in the financial burden since the additional expenditure 
to be borne by the Supervisory Authority would have been borne by the Galileo Joint 
Undertaking anyway. 

Choice of instruments 

Proposed instrument: Regulation 

Other instruments would not have been appropriate, for the following reasons: 

331 

332 

341 

342 

Only a regulation can amend a regulation. 

BUDGETARY IMPLICATIONS 

401 

The proposal will result in an increase in the Supervisory Authority’s budget until the 
completion of the development phase of the Galileo programme. 

ADDITIONAL INFORMATION 

520 

Repeal of existing legislative provisions 

The  adoption  of  this  proposal  will  mean  that  some  legislative  provisions  must  be 
repealed. 

Review/revision/sunset clause 

533 

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

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2006/0090 (CNS) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 1321/2004 on the establishment of structures for the 
management of the European satellite radio-navigation programmes 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article 308 thereof, 

Having regard to the proposal from the Commission1, 

Having regard to the opinion of the European Parliament2, 

Whereas: 

(1) 

The  European  GNSS  Supervisory  Authority,  hereinafter  “the  Authority”,  was  set  up 
by  Council  Regulation  (EC)  No  1321/20043,  to  ensure  the  management  of  public 
interests relating to the European GNSS programmes and to act as regulatory authority 
in  this  connection  during  the  deployment  and  operational  phases  of  the  Galileo 
programme. 

(2) 

The tasks of the Authority are laid down in Article 2 of Regulation No 1321/2004. 

(3) 

(4) 

The Galileo Joint Undertaking was set up by Council Regulation (EC) No 876/20024 
to complete the development phase and prepare for the following phases of the Galileo 
programme.  As  the  Galileo  programme  currently  stands,  the  development  phase  will 
not be completed before the end of 2008. 

Since  the  Authority  is  in  a  position  to  take  over  all  the  activities  currently  being 
carried  out by the  Galileo Joint Undertaking in the course of 2006  and  subsequently 
complete them, extending the lifetime of the Joint Undertaking beyond 2006 would be 
pointless  and  costly.  It  is  therefore  appropriate  to  wind  up  the  Galileo  Joint 
Undertaking  and  transfer  its  activities  to  the  Authority  before  the  completion  of  the 
development phase. 

(5) 

However,  taking  over  the  management  of  the  development  phase  from  the  Galileo 
Joint  Undertaking  is  not  listed  as  one  of  the  Authority’s  tasks  in  Article  2  of 
Regulation  (EC)  No  1321/2004.  Nor  does  that  Article  mention  research  activities  or 

1 
2 
3 
4 

OJ C […], […], p. […]. 
OJ C […], […], p. […]. 
OJ L 246, 20.7.2004, p. 1. 
OJ L 138, 28.5.2002, p. 1. 

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work  that  the  Authority  may  be  called  upon  to  carry  out  or  finance  during  the 
development, deployment and operation phases of the programme. 

(6) 

Consequently,  in  order  to  ensure  the  continuity  of  the  Galileo  programme  and  the 
smooth transfer of the activities of the Galileo Joint Undertaking to the Authority, the 
wording  of  Article  2  of  Regulation  (EC)  No  1321/2004  should  be  amended.  It  is 
appropriate to assign explicitly to the Authority the tasks entrusted to the Galileo Joint 
Undertaking  prior  to  its  disbanding,  together  with  the  task  of  attending,  where 
appropriate and acting in accordance with a decision by the Administrative Board of 
the  Galileo  Joint  Undertaking,  to  the  proceedings  involved  in  winding  up  the  Joint 
Undertaking after 31 December 2006. It is also necessary to entrust the Authority with 
the task of carrying out all research of benefit to the European GNSS programmes. 

(7)  Moreover, for the sake of consistency, provision should be made for the Authority to 
assume  ownership  of  the  tangible  and  intangible  assets  held  by  the  Galileo  Joint 
Undertaking  at  the  time  of  its  disbanding,  rather  than  at  the  end  of  the  development 
phase. Provision should also be made for it to assume ownership of the tangible and 
intangible  assets  created  or  developed  during  the  development  phase  after  the 
disbanding of the Joint Undertaking. 

(8) 

In  addition,  to  avoid  any  risk  of  differences  of  interpretation  as  to  the  scope  of 
Regulation  (EC)  No  1321/2004,  it  is  also  necessary  to  specify  that  tangible  and 
intangible assets created or developed by the concession-holder during the deployment 
and  operation  phases  include  those  created  or  developed  by  its  subcontractors  or  by 
undertakings  under  its  control  or  by  their  subcontractors.  It  should  also  be  specified 
that the ownership of assets covers trade mark rights and all other intellectual property 
rights  within  the  meaning  of  Article  1(1)  of  Commission  Regulation  (EC) 
No 772/2004  of  27  April  2004  on  the  application  of  Article  81(3)  of  the  Treaty  to 
categories of technology transfer agreements5. 

(9) 

Regulation (EC) No 1321/2004 should therefore be amended accordingly, 

HAS ADOPTED THIS REGULATION: 

Article 1 

Regulation (EC) No 1321/2004 is amended as follows: 

(1) 

In Article 2(1), the following points (k) and (l) are added:  

“(k)  with  a  view  to  the  completion  of  the  development  phase  of  the  Galileo 
programme,  it  shall  take  over,  no  later  than  the  end  of  the  lifetime  of  the 
Galileo Joint Undertaking, the tasks assigned to the latter by Articles 2, 3 and 4 
of  the  Statutes  of  the  Joint  Undertaking  annexed  to  Council  Regulation  (EC) 
No  876/2002(*).  It  shall,  where  appropriate  and  acting  in  accordance  with  a 
decision by the Administrative Board of the Galileo Joint Undertaking, attend 
to  the  proceedings  involved  in  winding  up  the  Joint  Undertaking  after 
31 December 2006; 

5 

OJ L 123, 27.4.2004, p. 11. 

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(l) 

it shall  carry  out all research of benefit to the  development and promotion of 
the European GNSS programmes. 

______________________ 
(*) 

OJ L 138, 28.5.2002, p. 1.” 

(2) 

In Article 3, paragraph 1 is replaced by the following: 

“1.  From the end of the lifetime of the Galileo Joint Undertaking, as referred to in 
Article  20  of  its  Statutes,  the  Authority  shall  be  the  owner  of  all  the  tangible 
and  intangible  assets  created  or  developed  during  the  entire  development 
phase, including those owned by the Galileo Joint Undertaking in accordance 
with Article 6 of its Statutes and those created or developed by the European 
Space  Agency  and  by  entities  given  responsibility  by  the  latter  or  by  the 
Galileo Joint Undertaking for activities for the development of the programme. 

The  Authority  shall  be  the  owner  of  all  the  tangible  and  intangible  assets 
created  or  developed  by  the  concession-holder  during  the  deployment  and 
operation phases, including those created or developed by its subcontractors or 
by undertakings under its control or by their subcontractors. 

Ownership rights shall cover all intellectual property rights within the meaning 
of  Article  1(1)  of  Commission  Regulation  (EC)  No  772/2004(*),  and  in 
particular trade mark rights. 

__________________________ 
(*) 

OJ L 123, 27.4.2004, p. 11.” 

Article 2 

This Regulation shall enter into force on the [twentieth] 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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LEGISLATIVE FINANCIAL STATEMENT 

Policy area(s): ENERGY AND TRANSPORT 

Activity(ies): Development and validation phase of the Galileo programme 

TITLE  OF  ACTION:  PROPOSAL  FOR  A  COUNCIL  REGULATION  AMENDING  REGULATION  (EC) 
NO 1321/2004  ON  THE  ESTABLISHMENT  OF  STRUCTURES  FOR  THE  MANAGEMENT  OF 
THE EUROPEAN SATELLITE RADIO-NAVIGATION PROGRAMMES 

1. 

BUDGET LINE(S) + HEADING(S) 

060209/01 

060209/02 

2. 

OVERALL FIGURES 

2.1. 

Budget for action: EUR 82 million 

2.2. 

Period of application: 

The action will have an unlimited duration (annual contribution). 

2.3.  Multiannual estimate of expenditure: 

a) 

Schedule  of  commitment  appropriations/payment  appropriations 
intervention) in 

(financial 

EUR million 

Year 

2006 

2007 

2008 

2009 

2010 

2011 

2012 

2013 

Commitment 
appropriations 

Payment 
appropriations 

8 

8 

8 

8 

9 

9 

10 

11 

12 

12 

12 

10 

11 

12 

12 

12 

2.4. 

Compatibility with financial programming and financial perspective 

x 

Proposal compatible with existing financial programming 

Following 
year 

token 
entry 

token 
entry 

EN 

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2.5. 

Financial impact on revenue 

x 

No financial implications 

3. 

BUDGET CHARACTERISTICS 

Type of expenditure 

New 

EFTA 
contribution 

Contributions 
from 
candidate 
countries 

FP heading 

NCE 

DA 

NO 

NO 

NO 

No 3           

4. 

LEGAL BASIS 

Council  Regulation  (EC)  No  1321/2004  on  the  establishment  of  structures  for  the 
management of the European satellite radionavigation programmes.  

5. 

DESCRIPTION AND GROUNDS 

5.1. 

Need for Community intervention 

5.1.1.  Objectives pursued 

To  ensure  the  continuity  of  the  Galileo  programme  and  the  smooth  transfer  of  the 
Galileo  Joint  Undertaking’s  activities  to  the  Supervisory  Authority,  it  is  necessary  to 
amend Regulation (EC) No 1321/2004 by which the Supervisory Authority was set up.  

5.1.2.  Measures taken in connection with ex ante evaluation 

The proposal is the outcome of numerous discussions and has been endorsed by all the parties 
concerned by the Galileo programme (Administrative Boards of the Joint Undertaking and the 
Supervisory Authority).  

5.2. 

Actions envisaged and budget intervention arrangements 

Where the budget is concerned, transferring the Galileo Joint Undertaking’s activities to the 
Supervisory  Authority  will  mainly  have  have  an  impact  on  the  Supervisory  Authority’s 
operating  costs,  since  it  will  have  to  perform  extra  tasks  in  2006  and  subsequent  years.  An 
increase in its budget is therefore envisaged. 

5.3. 

Implementation arrangements 

The Supervisory Authority’s legal status allows it to act as a legal person in the performance 
of its tasks, which it will carry out in accordance with the rules and procedures provided for in 
the Regulation setting it up. 

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6. 

FINANCIAL IMPACT 

6.1.  Method  of  calculating  the  total  cost  of  the  action  (To  be  determined  by  DG 

BUDG and DG ADMIN) 

The  annual  costs  of  the  Supervisory  Authority  will  be  covered  by  Community  grants.  The 
different types of expenditure are as follows: 

Personnel costs 

The  proposed  budget  corresponds  to  a  staff  of  45  who  will  be  recruited6  gradually  between 
2006 and 2009. By the end of 2006, the Supervisory Authority will have a staff of 39. This 
estimate is based on a comparison with the Galileo Joint Undertaking. 

The  estimate  of  personnel  costs  is  based  on  the  annual  costs  for  categories  A*14,  A*13, 
A*11,  A*10,  A*9,A*8,  A*7,  A*6,  B*6,  B*3,  C*5,  and  C*2;  The  high  number  of  A  grade 
staff  reflects  the  high  level  of  scientific  competence  needed  by  the  Authority  to  perform  its 
tasks properly.  

TABLE Estimate of human resources 

GRADES 

Director of the Supervisory Authority 

Scientific staff 

Administrative staff 

TOTAL 

A 

1 

37 

38 

B 

C 

TOTAL 

1 

37 

7 

45 

2 

2 

5 

5 

The total annual personnel costs are estimated by taking as the average cost that of European 
Commission staff, i.e. EUR 0.108 million per annum. This cost does not include costs arising 
from recruitment, buildings and related administrative costs 

Equipment costs 

The costs arising from the acquisition of movable property and related costs and the purchase 
of  computer  equipment  are  estimated  at  EUR 600 000  for  2006.  A  provision  of 
EUR 200 000/year is earmarked to cover additional needs.  

Operating costs 

These  costs  cover  meetings,  studies  and  expenses  arising  from  translation,  publication  and 
public  relations.  The  preliminary  estimate  of  operating  costs  is  as  follows:  EUR 3.2  million 

6 

As temporary staff, in accordance with the rules applicable to Commission staff. 

EN 

13 

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for  2006,  EUR 3.1  million  2007,  EUR 4.1  million  for  2008,  EUR 4.3  million  for  2009, 
EUR 5.4 million for 2010, and EUR 6.4 million for 2011/2012/2013. 

Mission costs 

In  order  to  discharge  its  tasks,  the  Supervisory  Authority  will  need  to  organise  trips  both 
inside and outside the EU (transport and accommodation costs). The mission expenses budget 
is estimated at EUR 200 000 per annum for the first three years and EUR 300 000 per annum 
for  the  subsequent  years.  These  estimates  are  based  on  actual  average  costs  in  respect  of 
mission expenses at DG TREN.  

6.2. 

Itemised breakdown of cost of action 

Commitment appropriations in EUR (at current prices) 

Breakdown/ 
categories 

2006 

2007 

2008 

2009 

2010 

2011 

2012 

2013 

Following 
year 

Personnel costs 

2.500.000 

4.200.000 

4.200.000 

4.800.000 

4.800.000 

4.800.000 

4.800.000 

4.800.000 

Indirect 
personnel-related 
costs 

Equipment 

Operating costs 

Mission costs 

Total 

1.500.000 

300.000 

300.000 

400.000 

300.000 

300.000 

300.000 

300.000 

600.000 

200.000 

200.000 

200.000 

200.000 

200.000 

200.000 

200.000 

3.200.000 

3.100.000 

4.100.000 

4.300.000 

5.400.000 

6.400.000 

6.400.000 

6.400.000 

200.000 

200.000 

200.000 

300.000 

300.000 

300.000 

300.000 

300.000 

8.000.000 

8.000.000 

9.000.000 

10.000.000 

11.000.000 

12.000.000 

12.000.000 

12.000.000 

6.3. 

Schedule of commitment appropriations/payment appropriations 

2006 

2007 

2008 

2009 

2010 

2011 

2012 

2013 

in EUR million 

2006 –2013  

and thereafter 

Commitment appropriations 

8 

Payment appropriations 

2006 

and thereafter 

Total 

8 

8 

8 

8 

8 

9 

9 

9 

10 

11 

12 

12 

12 

10 

11 

12 

12 

12 

10 

11 

12 

12 

12 

EN 

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7. 

MONITORING AND EVALUATION 

7.1 

Monitoring arrangements 

Article 14 concerns the checks on the management of the funds entrusted to the Supervisory 
Authority  to  be  carried  out  by  the  Commission’s  internal  auditor,  the  European  Anti-Fraud 
Office (OLAF) and the Court of Auditors.  

7.2 

Arrangements and schedule for the planned evaluation 

Article 5 sets up the Supervisory Authority’s Administrative Board which carries out the tasks 
listed in Article 6, in particular concerning: 

– 

– 

– 

the annual work programme, 

the annual budget, and 

the financial rules. 

8. 

FRAUD PREVENTION MEASURES 

See point 7.1 above. 

EN 

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