Amended proposal for a Regulation of the European Parliament and of the Council on the further implementation of the European satellite radionavigation programmes (EGNOS and Galileo)
Date: 2007-09-19
Institutions: European Commission
Subjects: EU programme, organisation of transport, satellite navigation, space policy

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 19.9.2007 
COM(2007) 535 final 

2004/0156 (COD) 

Amended proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the further implementation of the  
European satellite radionavigation programmes (EGNOS and Galileo) 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1) The proposal for a Regulation adopted by the Commission in July 2004 

On  14  July  2004  the  Commission  adopted  a  proposal  for  a  Regulation  of  the  European 
Parliament  and  of  the  Council  on  the  implementation  of  the  deployment  and  commercial 
operating phases of the European programme of satellite radionavigation1. This proposal had 
two main objectives. 

Firstly, as the Galileo programme had reached an advanced stage of maturity and went well 
beyond  the  framework  of  a  simple  research  programme,  it  was  necessary  to  place  it  on  a 
specific  legal  basis  which  was  consistent  with  the  future  European  space  programme  and 
better  able  to  satisfy  its  needs  and  respond  to  the  requirement  for  sound  financial 
management. 

Secondly, this proposal dealt with financing the part of the Galileo programme funded by the 
Community budget during the 2007-13 financial framework. It also provided for a financial 
contribution  from  the  European  Community  of  EUR 1 billion  for  the  period  from 
1 January 2007 to 31 December 2013. 

On  21 April 2005  the  Council  reached  an  agreement  (partial  general  approach)  on  the 
Commission's  proposal  for  a  Regulation,  with  the  exception  of  the  budgetary  details,  with 
final approval dependant on the outcome of the debate on the 2007-13 financial framework. 
The  main  amendment  introduced  by  the  Council  was  to  include  the  EGNOS  programme  in 
the proposed Regulation. 

Parliament  has  also  examined  the  text  at  first  reading  and  on  5  September 2005  gave  a 
generally  very  positive  opinion  of  it.  Like  the  Council  it  wished  to  see  the  EGNOS 
programme included in the proposed Regulation. 

It should be pointed out that, when the Commission adopted its proposal for a Regulation in 
July  2004,  it  was  foreseen  that  the  deployment  and  commercial  operating  phases  of  the 
Galileo  programme  would  be  the  subject  of  a  private  sector  concession.  The  financial 
contribution from the European Community was, therefore, to be limited to one third of the 
cost  of  deployment  of  the  system  and  to  the  payment  of  annual  subsidies  to  the  future 
concessionaire during the first years of operation. 

2) Changes during the programme 

In  the  light  of  the  difficulties  that  arose  in  the  negotiations  on  the  concession  contract,  the 
Transport  Council  of  22 March 2007  asked  the  Commission  to  assess  all  progress  made 
regarding the Galileo project, to propose, as soon as possible, ways of guaranteeing the public 
financial commitments in the long term, to provide for a scenario for making EGNOS satellite 
navigation  services  available  in  the  short  term  and,  lastly,  to  assess  the  progress  of  the 
concession contract negotiations and to suggest detailed alternative scenarios. 

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COM(2004) 477. 

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The European Parliament made a similar request in its Resolution adopted on 26 April 20072, 
in particular to improve the public management of the programme by ensuring clear political 
responsibility and the Commission's leadership role. 

The  Commission  responded  to  the  requests  made  by  Parliament  and  the  Council  in  the 
Communication which it adopted on 16 May 20073. Firstly, it invited them to take note of the 
failure of the negotiations on the concession contract, to reaffirm the necessity to put in place 
an  autonomous  satellite  navigation  system  and  to  recognise  that,  in  this  respect,  the 
characteristics  of  the  Galileo  system  remain  fully  compatible  with  the  ambitions  of  the 
European  Union.  The  Commission  subsequently  made  the  following  main  proposals  with  a 
view to ensuring the satisfactory continuation of the programme: 

•  Ensure that the entire Galileo constellation is deployed by the European Community itself; 

the system may later be operated commercially through a public-private partnership. 

•  Nominate  the  European  Space  Agency  as  procurement  agent  for  the  deployment  of  the 
system. The Agency would act on behalf of the European Union, under its authority and by 
its rules. 

•  Strengthen and restructure the public governance of the European GNSS programmes by 
giving  the  Commission,  as  representative  of  the  European  Community,  political 
responsibility and a leadership role. 

•  Take immediate action to ensure that EGNOS, which will enter into operation at the start 

of 2009, can implement its services as a precursor to Galileo. 

In May 2007 the Commission stated that the new proposed scenario is the only one which will 
allow the system established under the Galileo programme to be fully operational by the end 
of  2012.  The  political  decision-making  process  currently  foresees  this  date  being  postponed 
until mid-2013. It requires a budget commitment of EUR 3.4 billion between 2007 and 2013, 
i.e.  EUR 2.4 billion  more  that  the  amount  originally  stated  in  the  proposal  adopted  by  the 
Commission  on  14 July 2004.  This  significant  increase  in  the  contribution  from  the 
Community budget is mainly the result of the European Community assuming responsibility 
for all aspects of deployment of the system. 

Following  the  Communication  from  the  Commission,  the  Transport  Council  adopted  a 
Resolution  in  June 2007  in  which  it  largely  agreed  to  the  Commission's  proposals.  In 
particular, the Council: 

•  concluded that the concession contract negotiations had failed and should be ended; 

•  invited the Commission to continue with the implementation of a certifiable EGNOS, with 

the initial service available by 2008; 

•  reaffirmed the value of Galileo as a key project of the European Union and supported the 

deployment of the Galileo system by the end of 2012; 

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European Parliament Resolution of 26 April 2007 on the Galileo concession contract negotiations. 
COM(2007) 261. 

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•  recognised that the implementation of a deployment of Galileo and EGNOS by the public 

sector would need additional public funding; 

•  requested  the  Commission  to  submit  to  it  by  September  2007  detailed  proposals  for 
financing,  proposals  for  an  implementation  and  procurement  strategy  which  will  have  to 
reflect progress made so far as well as the need for competition, concepts for the role of the 
private sector in the commercial operating phase, and proposals for a sound public-sector 
management structure of the programme on the basis of a clear division of responsibilities 
between the Commission, the European Space Agency,  the  European  GNSS  Supervisory 
Authority, Member States and the Council. 

In its Resolution of 20 June 20074 Parliament also supported the proposals put forward by the 
Commission  in  its  Communication  of  16 May 2007,  in  particular  regarding  Community 
financing for the programmes and the need to improve public governance of them. 

3) The proposed amendments to the text initially put forward by the Commission 

The proposals put forward by the Commission to amend its initial proposal for a Regulation 
reflect  the  abandonment  of  the  concession  plan  for  the  deployment  phase,  as  well  as  the 
various comments made by Parliament and the Council. 

Firstly,  the  text  now  fully  incorporates  the  EGNOS  programme  and  identifies  it,  alongside 
Galileo, as one of the two pillars of European satellite radionavigation policy. Both systems 
and programmes are also clearly defined. 

Secondly,  the  proposed  text  reflects  the  abandonment  of  the  concession  plan  for  the 
deployment phase of the Galileo programme and the fact that all aspects of this phase will be 
undertaken by the European Community. The budgetary resources needed to finance the two 
programmes  between  1 January 2007  and  31 December 2013  are  now  EUR 3 405  million. 
EUR 1 005 million is already foreseen in the existing financial programming (2007-13) under 
the  Commission's  proposed  legislation  for  the  implementation  of  the  deployment  and 
commercial operating phases of the Galileo programme5. It is proposed to increase the above 
figure by an additional EUR 2 100 million the allocation of which will be subject to a review 
of the current financial framework (2007-13). The funds are provided from unused margins in 
headings  2  and  5  for  2007  and  2008.  As  a  result,  the  text  of  the  amended  proposal  shall 
stipulate that the Community budget for 2007-13 foresee EUR 3 105 million for the European 
GNSS programmes. A sum of EUR 300 million, which is available for the European GNSS 
programmes  under  the  Seventh  Research  and  Development  Framework  Programme6,  will 
help cover these costs. 

This  amount  also  covers  costs  linked  to  the  delays  in  the  development  phase  of  the  Galileo 
programme, which will only be completed in 2010. Lastly, recent studies7 carried out by the 
Commission conclude that the Galileo system is likely to be deployed in mid-2013. 

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6 
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European  Parliament  Resolution  of  20  June  2007  on  the  financing  of  the  European  programme  of 
satellite  radionavigation  (Galileo)  under  the  Interinstitutional  Agreement  of  17  May  2006  and  the 
multiannual financial framework 2007-2013. 
COM(2004) 477 final/2. 
Title 6 of the Budget. 
COM(2007) 534, 19.9.2007. 

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Thirdly, the  text allows the commercial  operation of the EGNOS system from  2009,  with a 
one-year delay due to ongoing pre-qualification work. 

Fourthly,  the  proposed  text  aims  to  improve  the  public  governance  of  the  programmes. 
Halting  the  concession  contract  negotiations  left  a  legal  vacuum  regarding  the  role  of  the 
Supervisory Authority during the deployment and commercial operating phases of the Galileo 
programme,  as  the  tasks  assigned  to  the  Authority  under  Regulation  (EC)  No 1321/20048 
mainly entailed selecting a concession holder. The Commission must therefore put forward a 
proposal amending Regulation (EC) No 1321/2004 once the European Union has adopted the 
necessary political decisions, in order to ensure a solid and coherent framework for the public 
governance of the programmes. 

Nevertheless,  several  measures  can  already  be  taken.  The  proposed  text  strengthens  public 
governance in two ways: 

•  by  providing  for  a  strict  division  of  responsibilities  between  the  European  Community, 
represented  by  the  Commission,  the  European  GNSS  Supervisory  Authority  and  the 
European Space Agency, and  by  conferring the  implementation  of the programmes  upon 
the Commission. The European GNSS Supervisory Authority will, in addition to its core 
role of facilitating the introduction of the services offered by the systems on commercial 
markets,  assist  the  Commission  in  all  matters  linked  to  the  implementation  of  the 
programmes.  Technical  aspects  are  the  responsibility  of  the  European  Space  Agency. 
Contracts concluded by the Agency must comply with relevant Community rules on public 
contracts; 

•  by providing for the setting up of the Committee on European GNSS Programmes, which 
will help the Commission implement this Regulation and ensure the uniform management 
of the programmes, faster decision-making and equal access to information. 

The implementation of these programmes must be accompanied by the establishment of the 
appropriate  components  and  resources.  Amongst  other  things,  the  tasks  which  were  to  be 
undertaken  by  the  concession  holder  must  now  be  carried  out  by  the  Commission,  with  the 
help of independent experts, experts from the Member States and a specialised team. 

4) Conclusions 

In the light of the changes in the course of the Galileo programme since the start of 2007, in 
particular the fact that the European Community will now assume direct responsibility for the 
deployment  of  the  system  and  the  resulting  additional  cost  of  EUR 2 100 million  for  the 
Community  budget  during  the  2007-13  financial  framework,  it  is  necessary  to  amend  the 
proposal for a Regulation which was adopted by the Commission on 14 July 20049. 

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OJ L 246, 20.7.2004, p. 1. 
COM(2004) 477, 14.7.2004, as amended by COM(2004) 477 final/2, 24.5.2006. 

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2004/0156 (COD) 

Amended proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the further implementation of the  
European satellite radionavigation programmes (EGNOS and Galileo) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article 156 thereof, 

Having regard to the proposal from the Commission10, 

Having regard to the opinion of the European Economic and Social Committee11, 

Having regard to the opinion of the Committee of the Regions12, 

Acting in accordance with the procedure laid down in Article 251 of the Treaty13, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

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13 

The  aim  of  the  European  satellite  radionavigation  policy  is  to  provide  the  European 
Community  with  two  satellite  navigation  systems  (GNSS).  These  systems  are 
established  under 
the  EGNOS  and  Galileo  programmes  respectively.  Each 
infrastructure is made up of satellites and earth stations. 

The  EGNOS  and  Galileo  programmes  comply  fully  with  the  requirements  of  the 
principle of subsidiarity. The establishment of satellite radionavigation infrastructures 
exceeds the financial and technical capacities of any single Member State, and action 
at Community level is the best way to carry out these programmes, which are a good 
example  of  the  added  value  of  the  European  Community  when  it  clearly  defines  its 
objectives and resources. 

The  aim  of  the  Galileo  programme  is  to  establish  the  first  global  satellite 
radionavigation  and  positioning  infrastructure  specifically  designed  for  civilian 
purposes.  The  system  established  under  the  Galileo  programme  is  completely 
independent of other existing or potential systems. 

The  aim  of  the  EGNOS  programme  is  to  improve  the  quality  of  signals  from  the 
American  GPS  and  the  Russian  GLONASS  systems  to  ensure  reliability  over  a  vast 
geographical area. 

OJ C […], […], p. […]. 
OJ C […], […], p. […]. 
OJ C […], […], p. […]. 
…. 

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(5) 

(6) 

(7) 

(8) 

(9) 

The  European  Parliament,  the  Council  and  the  European  Economic  and  Social 
Committee have consistently given their full support to European GNSS programmes. 

Satellite  radionavigation  is  a  technology  which  can  improve  the  daily  lives  of 
European citizens in a large number of areas. The development of this technology is 
fully in line with the Lisbon Strategy and other Community policies, such as transport 
policy  as  set  out  in  the  Commission's  White  Paper14,  particularly  as  regards  freight 
management, charging for use of infrastructures and road safety. 

European GNSS programmes are among the priority projects included in the Growth 
initiative proposed by the Commission and endorsed by the European Council. They 
are  also  considered  as  one  of  the  major  achievements  of  the  future  European  space 
programme, as described in the Communication on the European Space Policy15. 

The  Galileo  programme  consists  of  a  definition  phase,  a  development  phase,  a 
deployment phase and a commercial operating phase. The deployment phase is set to 
begin in 2008 and end in 2013. The system should be operational in mid-2013. 

The definition and development phases of the Galileo programme, which are the parts 
of  the  programme  dedicated  to  research,  were  chiefly  financed  by  the  Community 
budget for trans-European networks. The deployment phase must be financed entirely 
by  the  European  Community  due  to  the  lack  of  a  real  commitment  from  the  private 
sector. Service concession contracts or public service contracts with the private sector 
may be awarded to operate the system. 

(10) 

It  is  important  that  the  financing  of  the  EGNOS  system,  including  all  the  elements 
ensuring it operates, is sustainable and can be marketed, be assured by the European 
Community. The operation of EGNOS could be the subject of a public service contract 
with the private sector until it is integrated into the operation of Galileo. 

(11)  Council Regulation (EC) No 2236/95 of 18 September 1995 laying down general rules 
for the granting of Community financial aid in the field of trans-European networks16 
sets  out  rules  for  Community  financial  aid  in  the  case  of  Community  projects 
concerning satellite navigation and positioning systems. 

(12)  Council  Regulation  (EC)  No 1321/2004  of  12 July 2004  on  the  establishment  of 
structures 
radio-navigation 
programmes17 establishes the European GNSS Supervisory Authority (hereinafter "the 
Supervisory Authority"). 

the  European  satellite 

the  management  of 

for 

(13) 

In  order  to  guarantee  the  continuation  of  the  Galileo  and  EGNOS  programmes  an 
appropriate financial and legal framework must be established to allow the European 
Community to continue to fund these programmes. It is also necessary to indicate the 
amount of money required between 1 January 2007 and 31 December 2013 to fund the 

14 
15 
16 

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COM(2001) 370, 12.9.2001. 
COM(2007) 212, 26.4.2007. 
OJ  L  228,  23.9.1995,  p.  1,  as  last  amended  by  Regulation  (EC)  No  807/2004  of  the  European 
Parliament and of the Council (OJ L 143, 30.4.2004, p. 46). 
OJ  L  246,  20.7.2004,  p.  1,  as  amended  by  Council  Regulation  (EC)  No  1942/2006  of  12  December 
2006 (OJ L 367, 22.12.2006, p. 18). 

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(14) 

end  of  the  development  phase  and  the  deployment  phase  of  Galileo  and  the  start  of 
operation of the Galileo and EGNOS systems. 

Investment costs and the costs for operating the Galileo and EGNOS systems for the 
period 2007-13 are currently estimated at EUR 3.4 billion at current prices. EUR 1 005 
million is already foreseen in the existing financial programming (2007-13) under the 
Commission's  proposed  legislation  for  the  implementation  of  the  deployment  and 
commercial  operating  phases  of  the  Galileo  programme18.  It  is  proposed  to  increase 
the above figure by  an  additional  EUR 2 100  million  the allocation of  which  will  be 
subject  to  a  review  of  the  current  financial  framework  (2007-13).  The  funds  are 
provided from unused margins in headings 2 and 5 for 2007 and 2008. As a result, the 
text  of  the  amended  proposal  shall  stipulate  that  the  Community  budget  for  2007-13 
foresee  EUR 3 105  million  for  the  European  GNSS  programmes.  A  sum  of 
EUR 300 million,  which  is  available  for  the  European  GNSS  programmes  under  the 
Seventh  Research  and  Development  Framework  Programme19,  will  help  cover  these 
costs. 

(15) 

It should be pointed out that the investment costs and the costs of operating the Galileo 
and  EGNOS  systems  currently  estimated  for  2007-13  do  not  take  account  of 
unforeseen  financial  obligations  which  the  European  Community  may  be  obliged  to 
bear,  in  particular  those  relating  to  non-contractual  liability  arising  from  the  public 
ownership of the systems. 

(16)  Furthermore, revenue from the operation of the Galileo and EGNOS systems must be 
collected  by  the  European  Community  in  order  to  ensure  that  its  earlier  investments 
are  recovered.  However,  a  revenue-sharing  mechanism  could  be  stipulated  in  any 
contracts concluded with the private sector for the operation of these systems. 

(17)  Sound public governance of the Galileo and EGNOS systems assumes firstly that there 
is  a  strict  division  of  responsibilities  between  the  European  Community,  the 
Supervisory  Authority  and  the  European  Space  Agency  and,  secondly,  that  the 
European Community, represented by the Commission, ensures the implementation of 
the  programmes.  The  Commission  must  establish  the  appropriate  instruments  and 
possess the necessary resources, in particular in terms of assistance. 

(18)  The  main  role  of  the  Supervisory  Authority  will  be  to  assist  the  Commission  in  all 
matters which arise during the programmes. It must also manage the funds specifically 
allocated  to  it  under  the  programmes  or  entrusted  to  it  by  the  Commission  in 
accordance with Article 54(2) of Council Regulation (EC, Euratom) No 1605/2002 of 
25 June 2002  on  the  Financial  Regulation  applicable  to  the  general  budget  of  the 
European  Communities20,  as  amended  by  Council  Regulation  (EC,  Euratom) 
No 1995/2006 of 13 December 200621. 

(19)  The European Space Agency, which is the expert in technical matters, will conclude a 
multi-annual agreement with the European Community covering the technical aspects 
of  the  programmes.  In  order  for  the  Commission,  as  representative  of  the  European 

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COM(2004) 477 final/2. 
Title 6 of the Budget. 
OJ L 248, 16.9.2002, p. 1. 
OJ L 390, 30.12.2006, p. 1. 

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Community,  to  exercise  its  power  of  audit  fully,  the  agreement  must  include  the 
general  conditions  for  managing  the  funds  entrusted  to  the  European  Space  Agency 
and  provide  that  contracts  concluded  under  the  agreement  must  follow  Community 
rules on public contracts. Accordingly, due account must be taken of progress made so 
far  and  investments  which  have  already  been  agreed  as  well,  where  appropriate,  as 
agreements in force. 

(20)  The Commission should be assisted in implementing this Regulation by a committee 
named  the  "Committee  on  European  GNSS  Programmes".  As  sound  public 
governance requires uniform management of the programmes, faster decision-making 
and  equal  access  to  information,  representatives  of  the  Administrative  Board  of  the 
Supervisory  Authority  must  be  involved  in  the  work  of  the  Committee  on  European 
GNSS Programmes. 

(21)  As  European  satellite  radionavigation  programmes  have  now  reached  an  advanced 
stage  of  maturity  and  have  gone  well  beyond  the  framework  of  simple  research 
projects,  it  is  necessary  to  put  them  on  a  specific  legal  basis  which  is  better  able  to 
satisfy their needs and respond to the requirement for sound financial management. 

(22)  This  Regulation  lays  down,  for  the  continuation  of  the  programmes,  a  financial 
allocation  constituting  the  prime  reference,  within  the  meaning  of  point 37  of  the 
Interinstitutional  Agreement  of  17 May  2006  between  the  European  Parliament,  the 
Council  and 
the  Commission  on  budgetary  discipline  and  sound  financial 
management, for the budgetary authority during the annual budgetary procedure. 

(23) 

It  is  necessary  to  ensure  that  the  European  Parliament  and  the  Council  are  kept 
regularly informed about the implementation of the Galileo and EGNOS programmes, 

HAVE ADOPTED THIS REGULATION: 

CHAPTER I 

SUBJECT MATTER AND GENERAL PRINCIPLES 

Article 1 

European GNSS systems and programmes 

The  EGNOS  and  Galileo  programmes  (hereinafter  "the  programmes")  shall  cover  all  the 
activities needed to define, develop, validate, construct, operate, renew and improve the two 
European  satellite  navigation  systems  (GNSS),  namely  the  EGNOS  system  and  the  system 
established under the Galileo programme (hereinafter "the systems"). 

The EGNOS system is an infrastructure using signals emitted, initially, by the American GPS 
and  the  Russian  GLONASS  systems.  It  increases  their  reliability  over  a  geographical  area 
mainly  covering  Europe.  It  comprises  several  transponders  installed  on  satellites  and  earth 
stations. 

The system established under the Galileo programme is an autonomous GNSS infrastructure 
consisting of a constellation of satellites and earth stations. 

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Article 2 

Subject 

This  Regulation  lays  down  the  detailed  rules  for  the  implementation  of  the  programmes, 
including those on the financial contribution of the European Community. 

Article 3 

The phases of the Galileo programme 

The Galileo programme consists of the following phases: 

–  a  definition  phase  during  which  the  structure  of  the  system  was  designed  and  its 
components determined. This phase was financed entirely by Community funds under the 
Fifth Research and Development Framework Programme; 

–  a  development  and  validation  phase  comprising  the  construction  and  launch  of  the  first 
satellites, the establishment of the first ground-based infrastructures and all the work and 
operations making it possible to validate the system in orbit, funded by the Community and 
the European Space Agency; 

–  a  deployment  phase  consisting  of  the  establishment  of  all  the  space  and  ground-based 

infrastructures as well as related operations; 

–  a  commercial  operating  phase  comprising  infrastructure  management,  the  maintenance, 
constant  improvement  and  renewal  of  the  system,  certification  and  standardisation 
operations relating to the programme, the marketing of the system and all other activities 
needed to develop the system and ensure the programme runs smoothly. 

Article 4 

Financing the Galileo programme 

1. 

2. 

3. 

The development and validation phase shall be funded by the European Community 
and the European Space Agency and should end in 2010. 

The  deployment  phase  shall  be  financed  entirely  by  the  European  Community  and 
should run from 2008 to 2013. 

The  commercial  operating  phase  is  set  to  begin  in  2013.  During  this  phase  the 
operation  of  the  system  shall,  where  appropriate,  be  ensured  through  service 
concession  contracts  or  public  service  contracts  with  the  private  sector.  These 
contracts may be concluded before 2013. The financial contribution of the European 
Community  to  the  commercial  operating  phase  will  depend  on  the  level  of 
contributions  from  the  private  sector  resulting  from  any  contracts  concluded, 
following prior approval by the budgetary authority. 

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4. 

Agreements or conventions concluded by the European Community shall lay down 
the  conditions  and  detailed  rules  for  any  third-country  involvement  in  providing 
additional funding to the programme. 

Article 5 

Operation of the EGNOS system 

The  operation  of  the  EGNOS  system  consists  mainly  of  infrastructure  management, 
maintenance,  constant 
the  system,  certification  and 
standardisation operations relating to the programme and marketing the system. 

improvement  and  renewal  of 

Article 6 

Financing the operation of the EGNOS system 

1. 

2. 

The European Community shall finance the operation of EGNOS, without prejudice 
to any contribution from the private sector.  

The  operation  of  EGNOS  shall  initially,  as  a  priority,  be  the  subject  of  to  a  public 
service  contract  with  the  private  sector.  It  shall  then  gradually  become  an  integral 
part of the commercial operating phase of Galileo. 

CHAPTER II 

BUDGETARY CONTRIBUTION AND MECHANISMS 

Article 7 

Activities concerned 

The  Community  contribution  allocated  to  the  programmes  under  this  Regulation  shall  be 
granted to finance: 

(a) 

(b) 

(c) 

activities relating to the completion of the development and validation phase of 
the Galileo programme,  

activities relating to the deployment phase of the Galileo programme, including 
actions to manage and monitor this phase and to facilitate the  introduction of 
the system onto the market,  

activities relating to the operation of the systems as well as actions preceding 
or in preparation for commercial operation. 

EN 

11 

   EN 

 
Article 8 

Budgetary resources 

1. 

2. 

3. 

4. 

The  amount  needed  to  implement  the  activities  specified  in  Article 7  of  this 
Regulation, with the exception of those relating to the commercial operation of the 
system  established  under  the  Galileo  programme,  is  EUR 3 105 million  at  current 
prices for the period from 1 January 2007 to 31 December 2013. 

Appropriations  shall  be  authorised  annually  by  the  budgetary  authority  within  the 
limits laid down in the multiannual financial framework. They shall be implemented 
in  accordance  with  the  provisions  of  the  Financial  Regulation  applicable  to  the 
general budget of the European Communities. 

Budgetary  commitments  for  the  programmes  shall  be  appropriated  in  annual 
instalments. 

The  sum  specified  in  the  first  paragraph  of  this  Article  does  not  take  account  of 
unforeseen financial obligations which the European Community may be obliged to 
bear, in particular those relating to the public ownership of the systems. In this event 
the Commission shall present appropriate proposals to the European Parliament and 
to the Council. 

Article 9 

Operating income 

Income from the operation of the systems shall be collected by the European Community and 
shall  be  paid  into  the  Community  budget  and  be  allocated  to  the  European  GNSS 
programmes.  If  the  income  allocated  proves  to  be  significantly  more  than  expected,  the 
principle of allocation shall be reviewed. 

A  revenue-sharing  mechanism  may  be  provided  for  in  any  contract(s)  concluded  with  the 
private sector. 

CHAPTER III 

PUBLIC GOVERNANCE OF THE PROGRAMMES 

Article 10 

General framework for governance of the programmes 

Public  governance  of  the  programmes  is  based  on  the  principle  of  a  strict  division  of 
responsibilities  between  the  European  Community,  represented  by  the  Commission,  the 
European  GNSS  Supervisory  Authority  (hereinafter  "the  Supervisory  Authority")  and  the 
European Space Agency. 

EN 

12 

   EN 

 
The European Community, represented by the Commission, shall ensure the implementation 
of  the  programmes,  without  prejudice  to  Regulation  (EC)  No 1321/2004.  To  this  end  the 
Commission shall establish the appropriate instruments and ensure it possesses the resources 
needed to accomplish this task. It may call on independent experts to assist it in monitoring 
the  management  of  the  programmes.  It  may  also  be  assisted  by  experts  from  the  Member 
States and carry out financial and technical audits. 

Article 11 

Programming and allocation of funds 

1. 

2. 

3. 

4. 

5. 

The  European  Commission  shall  manage  the  funds  allocated  to  the  programmes 
under this Regulation. 

The  Commission  shall  establish  a  multi-annual  work  programme  which  meets  the 
objectives laid down in Annex to this Regulation. 

The Commission shall adopt the multi-annual work programme and any amendments 
thereto  in  accordance  with  the  procedure  referred  to  in  Article 14(2)  of  this 
Regulation. 

Amendments  to  Annex  shall  be  adopted  by  the  Commission.  Those  measures 
designed  to  amend  non-essential  elements  of  this  Regulation  shall  be  adopted  in 
accordance with the regulatory procedure with scrutiny referred to in Article 14(3). 

The  measures  financed  under  this  Regulation  shall  be  implemented  in  accordance 
with Regulation (EC, Euratom) No 1605/2002. 

Article 12 

The role of the Supervisory Authority (GSA) 

Without  prejudice  to  the  tasks  conferred  upon  it  under  Regulation  (EC)  No 1321/2004,  the 
Supervisory  Authority  shall  support  the  Commission  in  all  matters  concerning  the 
programmes,  wherever  its  assistance  is  requested  by  the  Commission.  It  shall  manage  and 
inspect the use of the funds specifically granted to it by the European Community under the 
programmes.  These  funds  shall  be  made  available  to  the  Supervisory  Authority  through  a 
delegation  decision  in  accordance  with  Article 54(2)  of  Regulation  (EC,  Euratom) 
No 1605/2002 and the provisions of Regulation (EC) No 1321/2004. 

The  Commission  shall  conclude  a  delegation  agreement  with  the  Supervisory  Authority  on 
the  basis  of  the  delegation  decision  provided  for  in  the  previous  paragraph.  The  delegation 
agreement shall stipulate the general conditions for the management of the funds entrusted to 
the Supervisory Authority, in particular the actions to be implemented, the relevant financing, 
management procedures and monitoring and inspection measures. 

EN 

13 

   EN 

 
Article 13 

The role of the European Space Agency (ESA) 

The  European  Community,  represented  by  the  Commission,  shall  conclude  a  multi-annual 
agreement with the European Space Agency on the basis of a delegation decision adopted by 
the Commission in accordance with Article 54(2) of Regulation (EC, Euratom) No 1605/2002 
which shall cover the technical issues which arise during the programmes, in particular in the 
implementation of activities relating to the deployment phase of the Galileo programme. 

The  agreement  shall  lay  down  the  general  conditions  for  the  management  of  the  funds 
entrusted to the European Space Agency, and in particular the actions to be implemented, the 
relevant  financing,  management  procedures  and  monitoring  and  inspection  measures, 
measures  applicable  in  the  event  of  inadequate  performance  of  the  contract  and  rules 
regarding the ownership of tangible and intangible property. 

Contracts  concluded  under  this  agreement  shall  comply  with  Community  rules  on  public 
contracts,  without  prejudice  to  measures  required  to  protect  the  essential  interests  of  the 
security of the European Community or public security. They shall comply with the structure 
and Community nature of the programmes. 

1. 

2. 

3. 

4. 

5. 

Article 14 

Comitology 

The  Commission  shall  be  assisted  by  a  committee  known  as  the  "Committee  on 
European GNSS Programmes". 

reference 

Where 
and  7  of 
Decision 1999/468/EC  shall  apply,  having  regard  to  the  provisions  of  Article 8 
thereof. 

this  paragraph,  Articles 4 

is  made 

to 

Where  reference  is  made  to  this  paragraph,  Articles 5a(1)  to  (4)  and  Article 7  of 
Decision 1999/468/EC  shall  apply,  having  regard  to  the  provisions  of  Article 8 
thereof. 

Representatives  of  the  Administrative  Board  of  the  Supervisory  Authority  shall  be 
involved  in  the  work  of  the  Committee  on  European  GNSS  Programmes. 
Representatives  of  the  Programme  Board  on  Satellite  Navigation  of  the  European 
Space  Agency  may  also  be  involved  in  the  work  of  the  Committee  on  European 
GNSS Programmes under the conditions laid down in its rules of procedure. 

Agreements or conventions concluded by the European Community may provide for 
the  participation  of  third  countries  or  international  organisations  in  the  work  of  the 
Committee  on  European  GNSS  Programmes  under  the  conditions  laid  down  in  its 
rules of procedure. 

EN 

14 

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CHAPTER IV 

FINAL PROVISIONS 

Article 15 

Protection of the Community's financial interests 

The  Commission  shall  ensure  that,  when  actions  financed  under  this  Regulation  are 
implemented,  the  financial  interests  of  the  Community  are  protected  by  the  application  of 
preventive  measures  against  fraud,  corruption  and  any  other  illegal  activities,  by  effective 
checks  and  by  the  recovery  of  amounts  unduly  paid  and,  if  irregularities  are  detected,  by 
effective, proportional and dissuasive penalties, in accordance with Council Regulations (EC, 
Euratom)  No 2988/9522  and  (Euratom,  EC)  No 2185/9623  and  with  Regulation  (EC) 
No 1073/1999 of the European Parliament and of the Council24. 

For the Community actions financed under this Regulation, the notion of irregularity referred 
to in Article 1(2) of Regulation (EC, Euratom) No 2988/95 shall mean any infringement of a 
provision of Community law or any breach of a contractual obligation resulting from an act or 
omission  by  an  economic  operator,  which  has,  or  would  have,  the  effect  of  prejudicing  the 
general  budget  of  the  Communities  or  budgets  managed  by  them,  by  an  unjustified  item  of 
expenditure. 

Contracts, agreements and conventions resulting from this Regulation, including agreements 
or conventions concluded with participating third countries, shall provide for supervision and 
financial control by the Commission, or any representative authorised by it, and audits by the 
Court of Auditors, if necessary on-the-spot. 

Article 16 

Information to the European Parliament and to the Council 

The  Commission  shall  ensure  the  implementation  of  this  Regulation.  Each  year,  when  it 
presents the preliminary draft budget, it shall present a report to the European Parliament and 
to the Council on the implementation of the programmes. A mid-term review shall be carried 
out in 2010 to inform the European Parliament and the Council of the progress made on the 
programmes. 

Article 17 

Entry into force 

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

22 
23 
24 

OJ L 312, 23.12.1995, p. 1. 
OJ L 292, 15.11.1996, p. 2. 
OJ L 136, 31.5.1999, p. 1. 

EN 

15 

   EN 

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

Done at Brussels, […] 

For the Parliament 
The Presidanet 

For the Council 
The President 

EN 

16 

   EN 

 
Annex  

Objectives of the European GNSS programmes 

The European GNSS systems and programmes, and the general objectives and phases of these 
programmes, are set out in Articles 1, 3 and 5 of this Regulation. 

The specific objectives of the Galileo programme are to ensure that the signals emitted by the 
system can be used to fulfil the following five functions: 

•  To  offer  an  open  service  (OS),  which  is  free  to  the  user  and  provides  positioning  and 
radionavigation 

for  high-volume 

information 

intended 

satellite 

synchronisation 
applications. 

•  To  offer  a  safety  of  life  service  (SoL)  aimed  at  users  for  whom  security  is  essential  and 
which meets the  requirements  of  the  aeronautical,  maritime and rail  sectors. This service 
also  fulfils  the  requirement  for  continuity  and  includes  an  integrity  message  alerting  the 
user to any failure in the system. 

•  To offer a commercial service (CS) for the development of applications for professional or 
commercial use due to improved performance and data with greater added value than those 
obtained through the open service. 

•  To  offer  a  public  regulated  service  (PRS)  restricted  to  government-authorised  users,  for 
sensitive applications which require a high level of service continuity. The public regulated 
service uses strong, encrypted signals. 

•  To  participate  in  the  search  and  rescue  support  service  (SAR)  of  the  COSPAS-SARSAT 
system  by  detecting  emergency  signals  given  off  by  beacons  and  relaying  messages  to 
them. 

The  specific  objectives  of  the  EGNOS  programme  are  to  ensure  that  the  EGNOS  system 
fulfils the following three functions: 

•  To  offer  an  open  service,  which  is  free  to  the  user  and  provides  positioning  and 
radionavigation 

for  high-volume 

intended 

satellite 

synchronisation 
information 
applications in the area covered by the system. 

•  To  offer  a  service  for  the  dissemination  of  commercial  data  to  assist  the  development  of 
applications  for  professional  or  commercial  use  due  to  improved  performance  and  data 
with greater added value than those obtained through the open service. 

•  To  offer  a  safety  of  life  service  aimed  at  users  for  whom  security  is  essential  and  which 
meets  the  requirements  of  the  aeronautical,  maritime  and  rail  sectors.  In  particular,  this 
service fulfils the requirement for continuity and includes an integrity message alerting the 
user to any failure in the system. 

EN 

17 

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LEGISLATIVE FINANCIAL STATEMENT 

1. 

NAME OF THE PROPOSAL: 

Amended proposal for a Regulation of the European Parliament and of the Council 
on the further implementation of the European satellite radionavigation programmes 
(EGNOS and Galileo) 

2. 

ABM/ABB 
BUDGETING) FRAMEWORK 

(ACTIVITY-BASED  MANAGEMENT/ACTIVITY-BASED 

Policy area(s) concerned and associated activity/activities):  

TITLE 06 — ENERGY AND TRANSPORT 

CHAPTER 06 02 — INLAND, AIR AND MARITIME TRANSPORT  

CHAPTER 06 06 — RESEARCH RELATED TO ENERGY AND TRANSPORT 

3. 

BUDGET LINES 

3.1. 

Budget lines:  

Heading 06 01 04 11 — Galileo Programme – Administrative expenditure (new budget line to 
be created) 

Article 06 02 10 — Galileo Programme  

Article 06 06 02 — Research related to transport (including aeronautics) 

3.2. 

Duration of the action and of the financial impact: 

2008-13 

3.3. 

Budget characteristics 

Budget line 

Type of 
expenditure 

New 

EFTA 
participation 

Participation 
applicant 
countries 

Heading in 
financial 
perspective 

06 01 04 11  NCE  NDA 

YES 

NO 

NO 

06 02 10 

NCE  DA 

NO 

NO 

NO 

06 06 02 

NCE  DA 

NO 

YES 

YES 

N° 1a – 
competitiveness 
for growth and 
cohesion 

N°1a –
competitiveness 
for growth and 
cohesion 

N°1a –
competitiveness 
for growth and 

EN 

18 

   EN 

 
cohesion 

4. 

SUMMARY OF RESOURCES 

4.1. 

Financial resources 

4.1.1. 

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

The presentation of the financial resources complies with: 

(2) 

(3) 

(4) 

(5) 

1) the existing financial programming 2007-13: €1 005 million 25 

2) additional amounts 2008-13: €2 100 million 

3) the amount of €300 000 in the framework of the 7th RTD framework programme 

3) the total : 2007-13: €3 405 million 

Type of expenditure 

Section 
No 

Year 

2007 

Year 

2008 

Year 

2009 

Year 

2010 

Year 

2011 

Year 

2012 

Year 

2013 

Total 

€ million (to three decimal places) 

Operational 
expenditure26
Commitment 
appropriations (CA) 

Commission Proposal 
COM(2004)477/final2 

Additional amounts for 
European GNSS 
programmes 
Amounts financed under 
7th RTD framework 
programme  
Revised proposal 
currently presented in 
commitment 
appropriations (CA)  
Payment appropriations 
(PA) 
Payment appropriations for 
European GNSS 
programmes  
Payment appropriations 
financed under 7th RTD 
framework programme 

 (I) 

100,00027  151,000  201,000  251,000  151,000   151,000  

0,000  1 005,000 

 (II) 

0,000  734,000  544,000  684,000 

66,000  

42,000  

3,000  2 073,000 

0,000 

50,000 

50,000 

50,000 

50,000  

50,000  

50,000 

300,000 

8.1. 

a  
(I+II) 

100,000  885,000  745,000  935,000  217,000   193,000  

3,000  3 078,000 

(I)  

0,000  279,500  469,500  667,500  775,500   556,500   329,500  3 078,000 

0,000 

50,000 

50,000 

50,000 

50,000  

50,000  

50,000 

300,000 

25 
26 
27 

COM(2004) 477; COM(2004) 477 final/2 
Expenditure that does not fall under Chapter xx 01 of the Title xx concerned. 
€100  million  is  budgeted  for  2007  under  budget  line  060210.  However,  the  Commission  will  not  be 
able to use it because the basic instrument will not be adopted during 2007. The Commission therefore 
intends to transfer this sum to the TEN-Ts in the form of commitment appropriations (with a forecast 
return  to  budget  line  060210  in  2009),  and  make  payment  appropriations  available  via  the  omnibus 
transfer. 

EN 

19 

   EN 

 
  
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
  
  
  
  
  
 
 
 
 
 
 
 
 
 
  
  
  
                                                 
Proposal currently 
presented in payment 
appropriations (PA)  

b 
(I) 

0,000  279,500  469,500  667,500  775,500   556,500   329,500  3 078,000 

Administrative expenditure within reference amount 

Technical and 
administrative assistance –
TAA (NDA) 

TOTAL REFERENCE 
AMOUNT 

Commitment 
appropriations 
(including funds under 
7th RTD framework 
programme: €300 000) 
Payment appropriations 
(including funds under 
7th RTD framework 
programme: €300 000) 

8.2.4. 

c 

0,000 

5,000 

5,000 

5,000 

4,000  

4,000  

4,000 

27,000 

a+c+FP7 
funds 

b+c+FP7 
funds 

100,000  940,000  800,000  990,000  271,000   247,000  

57,000  3 405,000 

0,000  334,500  524,500  722,500  829,500   610,500   383,500  3 405,000 

Administrative expenditure not included in reference amount28

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

8.2.5. 

8.2.6. 

Total indicative financial 
cost of intervention 

d 

e 

TOTAL CA including 
cost of human resources 
TOTAL PA including 
cost of human resources  

a+c+d+e+FP7 
funds 
b+c+d+e+FP7 
funds 

Co-financing details 

0,000 

2,874 

3,459 

3,459 

3,459  

3,459  

3,459 

20,169 

0,000 

0,700 

0,700 

0,700 

0,700  

0,700  

0,700 

4,200 

100,000  943,574  804,159  994,159  275,159   251,159  

61,159  3 429,369 

0,000  338,074  528,659  726,659  833,659   614,659   387,659  3 429,369 

NOT APPLICABLE 
4.1.2.  Compatibility with the financial programming 

(cid:133) 

Proposal compatible with the existing financial programming. 

⌧  Proposal will entail reprogramming of the relevant heading in the multiannual 

financial framework. 

⌧  Proposal  will  require  application  of  the  provisions  of  the  Interinstitutional 
Agreement29. It calls for a budgetary commitment of €3 105 million during the 
period 2007-13, i.e. €2 100 million more than the amount originally foreseen in 

28 
29 

Expenditure within Chapter xx 01 other than Articles xx 01 04 or xx 01 05. 
OJ C 139 of 14.6.2006, p. 1. 

EN 

20 

   EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
                                                 
the  proposal  adopted  by  the  Commission  on  14 July  2004,  as  amended  by 
COM(2004) 477 final/2 of 24 May 2006. 

4.1.3.  Financial impact on revenue 

(cid:133) 

Proposal has no financial impact on revenue 

⌧  Proposal has financial impact - the effect on revenue is as follows:  
See Commission communication of September 2007, point 4.2. 

4.2. 

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

Annual requirements  2008 

2009  2010 

2011 

2012 

2013 

Total 
human resources 30 

number 

of 

30 

35 

35 

35 

35 

35 

5. 

CHARACTERISTICS AND OBJECTIVES 

5.1. 

Need to be met in the short or long term 

As  far  back  as  July  1999  the  Council  considered  that  “the  development  of  a  satellite 
navigation system for civil use leads to increased independence in one of the most important 
key  technologies”  and  that  “the  development  of  a  satellite  navigation  system  for  civil  use 
affords  European  industry  the  chance  to  enhance  its  competence  and  to  participate  in 
opportunities opened up by this future technology on a large scale”. Since then, the Council of 
Ministers and the European Council have repeatedly stressed the strategic importance of this 
programme and asked the Commission to take whatever action is required to implement it. 

On  14  July  2004,  the  Commission  adopted  a  proposal  for  a  Regulation  of  the  European 
Parliament  and  the  Council  on  the  implementation  of  the  deployment  and  commercial 
operating phases of the European programme of satellite radionavigation31. This proposal had 
two  main  objectives.  Firstly,  as  the  Galileo  programme  had  reached  an  advanced  stage  of 
maturity  and  went  well  beyond  the  framework  of  a  simple  research  project,  it  was  now 
necessary  to  place  it  on  a  specific  legal  basis,  consistent  with  the  future  European  space 
programme  and  better  able  to  satisfy  its  needs  and  respond  to  the  requirement  for  good 
financial management. 

Secondly, the part of the Galileo programme which was funded from the Community budget 
had  to  be  financed  during  the  period  of  the  financial  framework  for  2007-13.  The  proposal 
accordingly mentioned a financial contribution of €1 billion from the European Community 
for the period from 1 January 2007 to 31 December 2013. On 21 April 2005 the Council came 
to  an  agreement  (a  "partial  general  approach")  on  the  Commission’s  proposal  for  a 
Regulation, apart from the budgetary aspect, final approval being dependent on the outcome 
of the discussion on the financial framework for 2007-13. The main change introduced by the 
Council concerns the inclusion of the EGNOS programme in the proposal for a Regulation. 

30 
31 

Of the 35 posts, 21 are new while the other 14 already existed. 
COM(2004) 477. 

EN 

21 

   EN 

 
                                                 
Parliament  has  also  examined  the  text  at  first  reading  and  gave  a  generally  very  positive 
opinion of it on 5 September 2005. Like the Council it wished to see the EGNOS programme 
included in the proposal for a Regulation. 

It should be pointed out that when the Commission adopted its proposal for a Regulation in 
July 2004 it was foreseen that the deployment and commercial operating phases of the Galileo 
programme would be the subject of a private-sector concession. In this context the financial 
participation  of  the  European  Community  was  to  be  limited  to  one-third  of  the  cost  of 
deployment  of  the  system  and  to  the  payment  of  annual  subsidies  to  the  future 
concessionnaire during the first years of operation. 

In  the  light  of  the  difficulties  that  arose  in  the  negotiations  on  the  concession  contract,  the 
Transport  Council  of  22  March  2007  and  the  European  Parliament  asked  the  Commission, 
inter alia, to propose possible ways of guaranteeing the public financial commitments in the 
long term. 

The  Commission  responded  to  the  requests  made  by  Parliament  and  the  Council  in  its 
Communication of 16 May 2007. It asked them first of all to take note of the failure of the 
negotiations  on  the  concession  contract.  To  ensure  a  satisfactory  continuation  of  the 
programme the Commission then made a few main proposals, in particular that the European 
Community should itself see to the deployment of the full Galileo constellation, whereupon 
the system could subsequently be operated by a public-private partnership.  

The Commission pointed out that the new scenario proposed was the only one which could 
make  possible  the  full  implementation  of  Galileo  by  the  end  of  2012.  It  required  a  budget 
commitment of the order of €3.4 billion during the period 2007-2013, i.e. €2.4 billion more 
than  the  amount  initially  foreseen  in  the  proposal  adopted  by  the  Commission  on  14 July 
2004.  This  substantial  increase  in  the  contribution  from  the  Community  budget  was  chiefly 
due  to  the  European  Community’s  taking  responsibility  for  the  deployment  of  the  entire 
system itself.  

Following the Commission’s Communication, in June 2007 the Transport Council adopted a 
resolution in which it: 

•  concluded that the current concession negotiations had failed and should be ended; 

•  invited the Commission to continue with the implementation of a certifiable EGNOS, with 

the initial service availability by 2008; 

•  reaffirmed the value of Galileo as a key project of the European Union and supported the 

deployment of the Galileo system by the end of 2012; 

•  recognised that the implementation of a deployment of Galileo and EGNOS by the public 

sector would need additional public funding; 

•  requested the Commission to submit to it before September 2007 detailed proposals for the 
financing,  for  a  procurement  strategy  by  the  public  sector  which  would  have  to  reflect 
progress  made  so  far  and  the  need  for  competitive  tendering,  for  the  involvement  of  the 
private sector during the operation and exploitation phase, and finally for a sound public 
sector  management  structure  of  the  programme  on  the  basis  of  a  clear  division  of 

EN 

22 

   EN 

 
responsibilities  between  the  Commission,  the  European  Space  Agency,  the  GNSS 
Supervisory Authority (GSA), the Member States and the Council. 

Parliament likewise endorsed the proposals made by the Commission in its communication of 
16 May 2007, in particular as regards Community funding of the programmes. 

5.2. 

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

The EGNOS and Galileo programmes are fully in line with the subsidiarity principle. Setting 
up satellite radionavigation infrastructures is quite beyond the financial and technical capacity 
of any Member State acting on its own, and these programmes, which are a good example of 
Community  added  value  when  its  objectives  and  resources  are  clearly  defined,  are  best 
conducted at Community level. 

5.3. 

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

EU  satellite  radionavigation  policy  aims  to  give  the  European  Community  two  satellite 
radionavigation  systems  (GNSS):  EGNOS  and  Galileo.  Each  of  these  two  infrastructures 
consists of satellites and earth stations. 

The  proposals  put  forward  by  the  Commission  for  amending  its  initial  proposal  for  a 
Regulation  take  account  both  of  the  abandonment  of  the  concession  scheme  for  the 
deployment  phase  and  of  the  various  comments  made  by  the  European  Parliament  and  the 
Council. 

In  the  first  place,  the  text  now  fully  includes  the  EGNOS  programme.  It  identifies  this 
programme  as  one  of  the  two  pillars  (with  Galileo)  of  European  satellite  radionavigation 
policy, and clearly defines the two systems and programmes. 

Secondly,  the  text  makes  possible  full  operation  of  the  EGNOS  system  from  2009.  It  is 
important  that  financing  of  the  exploitation  of  EGNOS,  which  includes  all  the  elements 
necessary for its operation, its sustainability and its commercialisation, should be in the hands 
of the European Community from 2009 onwards. The exploitation of’ EGNOS could be the 
subject  of  a  public  service  contract  with  the  private  sector  up  to  2013  and  thereafter  be 
integrated into the exploitation of Galileo. 

Thirdly, the text proposed takes account of the abandonment of the concession scheme for the 
deployment  of  the  Galileo  programme  and  of  the  fact  that  responsibility  for  this  phase  has 
been fully assumed by the European Community for lack of any real commitment on the part 
of  the  private  sector.  It  may  be  possible  for  the  exploitation  of  the  system  to  become  the 
subject of service concessions contracts or of public service contracts with the private sector. 

Fourthly, the text proposes to improve the public governance of the programmes in two ways: 

•  by  providing  for  a  strict  division  of  responsibilities  between  the  European  Community 
(represented  by  the  Commission),  the  European  GNSS  Supervisory  Authority  and  the 
European  Space  Agency,  and  granting  the  Commission  a  leading  role  and  the 
responsibility for the implementation of the programmes;  

•  by creating a Committee on European GNSS Programmes. 

EN 

23 

   EN 

 
The following are the operational objectives and the action foreseen: 

Operational objective 1: The further implementation of the Galileo programme. 

Action 1: Long lead items 

This  action  consists  in  ensuring  early  procurement  of  the  long  lead  items  (satellite  items 
which  need  to  be  procured  in  advance  of  the  satellite  production  due  to  their  limited 
availability in the market) compatible with the satellite production line(s), stemming from the 
full deployment contract negotiations. This action is time-critical for the overall planning of 
Galileo. 

Action 2: Full satellites 

The objective is to ensure that the results of the full deployment contract negotiation and the 
contract  implementation  are  in  line  with  the  Commission's  objectives  for  the  Galileo 
programme.  Full  respect  of  Council  decisions  in  the  procurement  policy  as  well  as 
compatibility with international commitments will have to be thoroughly checked. 

Action 3: Launchers 

The  objective  is  to  ensure  that  the  launch  plan  proposed  by  ESA  is  in  line  with  the  overall 
Commission policy, as well as the programme risk management policy and risks mitigation 
plans. Potential international cooperation may be put into perspective with this launch plan. 

Action 4: Spare launcher and two satellite ground spares 

See previous point with specific focus on risk mitigation included in the contingencies. 

Action 5: Ground segment 

The objective is to ensure that the results of the full deployment contract negotiation and the 
contract  implementation  is  in  line  with  the  Commission's  objectives  for  the  Galileo 
programme.  Full  respect  of  Council  decisions  in  the  procurement  policy  as  well  as 
compatibility with international commitments will have to be thoroughly checked. 

Action 6: Operations 

The objective is to ensure that the results of the full deployment contract negotiation and the 
contract  implementation  are  in  line  with  the  Commission's  objectives  and  actions  for  the 
Galileo  operations.  Full  respect  of  Council  decisions  in  the  future  exploitation  phase  of 
Galileo will have to be thoroughly checked. 

Action 7: System engineering 

The objective is to ensure that the results of the full deployment contract negotiation and the 
contract  implementation  are  in  line  with  the  Commission's  objectives  for  the  Galileo 
programme.  Full  respect  of  Council  decisions  as  well  as  compatibility  with  international 
commitments will have to be thoroughly checked. 

Operational objective 2: EGNOS (single action). 

EN 

24 

   EN 

 
The  objective  is  to  ensure  that  the  actions  performed  by  ESA  and  GSA  concerning  the 
upgrade of EGNOS, early operations and economic operator selection of EGNOS are in line 
with the Commission's objectives. Full respect of Council decisions as well as compatibility 
with international commitments will have to be thoroughly checked. 

5.4. 

Implementation arrangements 

•  The  Commission  draws  up  a  multiannual  work  programme.  The  multiannual  work 
programme  and  its  revisions  are  adopted  by  the  Commission  in  accordance  with  the 
procedure referred to in Article 14 of this Regulation. 

•  The European GNSS Supervisory Authority is accorded a general rule of assistance to the 
Commission. It also manages and monitors utilisation of the funds specifically allocated to 
it for the programmes by the European Community. These funds are placed at the disposal 
of the Supervisory Authority by a delegation agreement in accordance with Article 54(2) 
of  Regulation  (EC,  Euratom)  No  1605/2002  and  the  provisions  of  Regulation  (EC)  No 
1321/2004. 

•  The  European  Space  Agency,  which  has  the  technical  know-how,  will  for  its  part  be 
concluding  a  multiannual  agreement  with  the  European  Community  on  the  technical 
aspects of the implementation of the programmes and in particular the activities associated 
with  the  Galileo  programme's  deployment  phase.  In  order  to  enable  the  Commission, 
representing  the  European  Community,  to  exercise  its  control  responsibilities  fully,  the 
agreement must include in particular the general conditions governing management of the 
funds entrusted to the European Space Agency and provide that contracts concluded under 
the agreement comply with the Community rules on public contracts.  

•  The Commission, on behalf of the EU as the owner of the system, has the responsibility, in 
particular, to ensure that the EU's political and international commitments and vision are 
implemented,  determine  and  agree  on  the  overall  specifications  and  requirements  for  the 
system;  and  be  able  to  monitor  and  control  the  strict  adherence  to  such  requirements 
throughout the construction, deployment, and exploitation phases. In this context,  

1. 

2. 

3. 

the  Commission  will  be  advised  by  senior  professionals  coming  from  disciplines 
such  as  project  management,  space  engineering,  finance  and  technology  marketing 
and acting as independent reviewers of the programme; 

team 

that  provides 

the  Commission  intends  to  put  in  place  an  appropriately  structured  and  staffed 
the  overall  management,  risk  monitoring  and 
Galileo 
management, reporting, and arbitrage of all the programme elements. The GSA and 
project  management  consultants,  the  latter  put  in  place  by  means  of  (a)  service 
contract(s),  provide  support  to  this  effort,  notably  as  concerns  risk  management 
monitoring and control, documentation control, participation in programme progress 
meetings, monitoring and reporting on progress, assist in the arbitrage of technical, 
cost, and schedule trade-offs; 

Finally,  the  Commission  may  be  supported  by  other  experts  and  specialists.  These 
experts  have  the  task  of  advising  the  Programme  Manager  but  shall  not  have 
executive  powers.  It  provides  a  good  opportunity  to  make  full  use  of  the  expertise 
available at national level. 

EN 

25 

   EN 

 
(cid:133)  Centralised management 

⌧ 

directly by the Commission (see 5.3) 

⌧ 

indirectly by delegation to: 

(cid:133) 

executive agencies,  

⌧ 

bodies set up by the Communities as referred to in Art. 185 of the 
Financial Regulation (GSA), 

⌧ 

international organisations (European Space Agency). 

6. 

MONITORING AND EVALUATION 

6.1.  Monitoring system 

The Commission draww up a multiannual work programme which sets out the actions funded, 
the  Community  contribution,  the  expected  results  and  performance  indicators.  The 
multiannual work programme and its revisions are adopted by the Commission in accordance 
with the procedure referred to in Article 14 of this Regulation. 

6.2. 

Evaluation 

6.2.1.  Ex-ante evaluation 

Since  1999  the  Commission  has  been  producing  a  series  of  studies  and 
Communications  relating  to  the  different  aspects  of  the  EGNOS  and  Galileo 
programmes  (definition,  costs/benefits,  governance,  PPPs,  etc).  All  of  these 
documents are available.  

6.2.2.  Terms and frequency of future evaluation 

The Commission sees to the implementation of the programmes. To this end, every 
year at the time of presentation of the preliminary draft budget it will present a report 
on their implementation to the European Parliament and the Council.  

In  addition,  a  mid-term  review  will  be  made  in  2010  to  inform  the  European 
Parliament  and  the  Council  of  the  state  of  play  with  the  EGNOS  and  Galileo 
programmes. 

7. 

ANTI-FRAUD MEASURES 

Under Article 15 of this Regulation, the agreements, financing agreements and any contract or 
implementing  instrument  resulting  from  them,  expressly  provide  that  the  Court  of  Auditors 
and  the  European  Anti-Fraud  Office  (OLAF)  may  if  necessary  carry  out  on-the-spot 
inspections. 

EN 

26 

   EN 

 
8. 

DETAILS OF RESOURCES 

8.1. 

Objectives of the proposal in terms of their financial cost 

These amounts have to be expressed in terms of current prices, excluding technical and administrative assistance costs, and covering years 
2007 to 2013 for a total of €3 378 million, €300 million of which is financed under the 7th RTD framework programme (Article 06 06 02 — 
Research related to transport (including aeronautics)  

Commitment appropriations in € million (to three decimal places) 

Year 2008 

Year 2009 

Year 2010 

Year 2011 

Year 2012 

Year 2013 

Outputs 

Total 
cost 

Outputs 

Total 
cost 

Outputs 

Total 
cost 

Outputs

Total 
cost 

Outputs 

Outputs 

Total 
cost 

Total 
cost 

TOTAL 

Outputs 

Total 
cost 

1 

1 

1 

1 

97,5 

1 

43,2 

0 

0 

0 

233,3 

1 

291,6 

1 

233 

162 

1 

270 

1 

270 

79,8 

1 

159,6 

1 

159,6 

0 

0 

140,7 

757,9 

702 

399 

EN 

EN 

27 

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

OPERATIONAL 
OBJECTIVE 1: "Further 
implementation of 
Galileo programme" 

Action 1 

LLI 

Action 2 

FULL SAT 

Action 3 

LAUNCHERS 

Action 4 

GROUND SEG. 

Action 5 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OPERATIONS 

0 

1 

55 

1 

110 

1 

110 

275 

Action 6 

SYSTEM/PROC 

75,6 

75,6 

1 

48,6 

1 

48.6 

1 

48,6 

1 

48,6 

345,6 

Action 7 

Contingency 

OPERATIONAL 
OBJECTIVE 2: EGNOS  

142.2 

108,4 

172,8 

4.4 

427,8 

OPERATIONS 

1 

TOTAL COST 

286,8 

935 

0 

1 

89532 

21,6 

985 

0 

1 

267 

21,6 

243 

0 

53 

330 

3378 

32 

EN 

The amount of €895 million shown in this table includes the sum of €100 million in commitment appropriations intended for transfer in 2009 from budget line 06 03 03 – 
"Financial  support  for  projects  of  common  interest  in  the  trans-European  transport  network"  to  budget  line  06 02 10  –  "Galileo  Programme",  this  being  pursuant  to  the 
transfer  request  which  will  be  propossed  by  the  Commission  in  2007  (see  also  the  footnote  to  the  grey  field  in  the  table  under  point  "4.1.1.  Summary  of  commitment 
appropriations (CA) and payment appropriations (PA)"). 

28 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
8.2. 

Administrative expenditure 

8.2.1.  Number and type of human resources 

The  Galileo  team  at  the  Commission  -  DG  TREN  –  has  to  have  at  least  35  members.  At 
present  it  has  13  (+1  vacant  post),  made  up  as  follows:  8  seconded  statutory  officials,  3 
statutory AST, 1 contract agent and 2 SNE. It therefore has to be allocated 21 additional posts 
made up as follows : 12 seconded statutory officials, 3 statutory AST and 6 SNE. 

The table below shows the total of 35 persons/posts. 

Types of post 

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

Year 2011  Year 2012  Year 2013 

Year 2008  Year 2009 

or 

Officials 
temporary 
staff33  (XX  01 
01) 

A*/AD  15 

6 

B*, 
C*/AS
T 

Staff  financed34  by  Art. 
XX 01 02 

935 

TOTAL 

30 

20 

6 

9 

35 

Year 
2010 

20 

6 

20 

6 

9 

9 

35 

35 

20 

6 

9 

35 

20 

6 

9 

35 

8.2.2.  Description of tasks deriving from the action 

The  programme  scope  compromises  around  €10  billion  for  procurement,  operations, 
exploitation and R&D contracts. The proposed "Galileo Team", headed at Director level, will 
provide  the  overall  management,  risk  monitoring  as  well  as  reporting  and  arbitrage  of  the 
programmes. In particular, it will execute the following tasks: 

1. 

Institutional tasks  

1.1. 

Reporting to Council and EP 

1.2. 

Liaison with CoA 

2. 

Operational tasks 

2.1. 

Programme management reporting to new European GNSS Council 

2.2. 

Oversight role in GSA Board 

2.3. 

Overall  programme  and  risk  management,  with  assistance  of  an  external  advisory 
council  

33 
34 
35 

Cost of which is NOT covered by the reference amount. 
Cost of which is NOT covered by the reference amount. 
8 SNE and 1 contract agent. 

EN 

29 

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2.4. 

2.5. 

Oversight  ESA  procurement,  management 
requirements 

technical  baseline  and  security 

Oversight EGNOS/Galileo operations/exploitation contracts (either directly or GSA 
oversight) 

2.6. 

Oversight GSA activities performed on behalf of COM (R&D, others) 

3. 

4. 

International negotiations (agreements and frequency/security matters) 

Legal and financial issues 

8.2.3. 

Sources of human resources (statutory) 

Needs in terms of human resources shall be covered by the budget allocated to the managing 
DG in the framework of the annual budgetary allocation procedure. 

⌧  Posts currently allocated to the management of the programme to be replaced 

or extended 

Statutory staff / officials:  8 AD + 3 AST 

plus: 

Contract agents: 

1 of GF II 

Seconded national experts (SNE):  2 

⌧  Posts pre-allocated within the APS/PDB exercise for year 2008  

2 FTE – operation 

14 FTE – research  

⌧  Posts to be requested in the next APS/PDB procedure (2009) 

5 FTE 

Posts  to  be  redeployed  using  existing  resources  within  the  managing  service 

(internal redeployment) 

(cid:133) 

Posts required for 2008-13 though not foreseen in the APS/PDB exercise of the 
year in question 

EN 

30 

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8.2.4.  Other  administrative  expenditure  included  in  reference  amount  (XX 01 04/05  – 

Expenditure on administrative management) 

€ million (to three decimal places) 

Budget line 

Year  

Year  

Year 

Year 

Year 

Year 

TOTAL 

(No and heading) 

2008 

2009 

2010 

2011 

2012 

2013 

Technical 

and 
1. 
administrative 
assistance 
(including related staff costs) 

Executive agencies 

Other 
administrative assistance 

technical 

and 

- intra muros36 

- extra muros37 

Total 
administrative assistance 

technical 

and 

3,500 

3,500 

3,500 

3,500 

3,500 

3,500 

21,000 

1,500 

1,500 

1,500 

1,000 

1,000 

1,000 

6,000 

5,000 

5,000 

5,000 

4,000 

4,000 

4,000 

27,000 

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

amount 

€ million (to three decimal places) 

Type of human resources 

Year 2008  Year 
2009 

Year 
2010 

Year 
2011 

Year 
2012 

Year 
2013 

Officials  or  temporary  staff  (XX  01 
01) 

Staff  financed  by  Art.  XX  01  02 
(auxiliary, SNE, contract staff, etc.) 

Total cost of human resources and 
associated  costs  (NOT  included  in 
the reference amount) 

2,457 

3,042 

3,042 

3,042 

3,042 

3,042 

0,417 

0,417 

0,417 

0,417 

0,417 

0,417 

2,874 

3,459 

3,459 

3,459 

3,459 

3,459 

36 

37 

Consultants via a contract, following a call for tenders (10 persons @ €1 450/person/day for 20 working 
days/month for 12 months + €20 000 for annual travel expenses. 
Supplementary  qualified  staff  is  required  for:  Galileo  programme  management  /  Financial/risk 
management  /  GNSS  policy/international/reporting  /  ESA  Procurement  oversight  /  Ops/exploitation 
contracts oversight 
See 5.4a. 

EN 

31 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
 
Calculation – Officials or temporary staff / Staff financed by Article XX 01 02 

a) Officials or temporary staff 

The Commission's average annual staff cost, for both officials and temporary staff, amounts 
to €117 000/year (in 2008) including indirect costs (overheads) (21 statutory staff x €117 000 
=  €2 457 000  for  2008  and  26  statutory  staff  x  €117 000  =  €3 042 000  for  the  following 
years). 

b) Staff financed by Article XX 01 02 

The average annual cost of one SNE is €48 000/year (8 SNE x €48 000 = €384 000) 

The average annual cost of one contract agent of FG II is €33 000/year. 

The total annual cost of staff financed under Article XX 01 02 is therefore €417 000. 

8.2.6.  Other administrative expenditure not included in reference amount 

€ million (to three decimal places) 

Year 
2008 

Year 
2009 

Year 
2010 

Year 
2011 

Year 
2012 

Year 
2013 

TOTAL 

XX 01 02 11 01 – Missions 

0,400 

0,400 

0,400 

0,400 

0,400 

0,400 

2,400 

XX 01 02 11 02 – Meetings and conferences 

0,050 

0,050 

0,050 

0,050 

0,050 

0,050 

0,300 

XX 01 02 11 03 - Committees 38 

0,250 

0,250 

0,250 

0,250 

0,250 

0,250 

1,500 

XX 01 02 11 05 - Information systems 

2. Total other management expenditure 
(XX 01 02 11) 

expenditure 

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

of 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

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

(NOT 

0,700 

0,700 

0,700 

0,700 

0,700 

0,700 

4,200 

38 

"Committee for the European GNSS Programmes" 

EN 

32 

   EN