COMMISSION STAFF WORKING PAPER European Global Navigation Satellite System Impact Assesment Executive Summary
Date: 2011-11-30
Institutions: European Commission
Subjects: EU financing, EU programme, European Space Agency, public contract, satellite navigation

EUROPEAN COMMISSION 

30.11.2011 
SEC(2011) 1447 final 

COMMISSION STAFF WORKING PAPER 

European Global Navigation Satellite System Impact Assesment Executive Summary  

Accompanying the document 

Proposal for a Regulation of the European Parliament and of the Council on further 
implementation of the European satellite navigation programmes (2014 – 2020) 

{COM(2011) 814 final} 
{SEC(2011) 1446 final} 

ELECTRONIC VERSION ONLY 

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1. 

PROBLEM DEFINITION 

1.1. 

Policy context 

Rationale 

Global Navigation Satellite System (GNSS) technologies, with their ability to provide highly 
reliable accurate measurements of position, velocity and time, are fundamental to improving 
efficiency  in  many  sectors  of  the  economy  and  in  many  areas  of  citizens'  daily  life.  The 
experience of the US GPS (Global Positioning System) has  demonstrated the advantages of 
satellite navigation so well that it is now regarded in the USA as the fifth utility1, alongside 
water,  electricity,  gas  and  telephone.  The  US  military  and  civil  users  have  developed  a 
considerable  dependence  on  the  GPS.  Several  other  countries  are  now  building  their  own 
GNSS. 

Nowadays, satellite navigation users in Europe have no alternative other than to use satellite 
the  US  GPS  or  Russia’s  GLONASS  (Global’naya  Navigatsionnaya 
signals  from 
Sputnikovaya  Sistema)  for  positioning,  navigation  and  time.  Europe’s  dependence  on  the 
satellite radio navigation provided by the GPS is estimated to represent 6 % to 7 % of the EU-
 800 billion2. Yet the military operators of these systems can give no guarantee 
27 GDP, i.e. €
to  maintain  an  uninterrupted  service.  This  means  that  the  European  economy  increasingly 
relies on a military infrastructure that is not controlled by Europe and not primarily designed 
to  serve  European  economic  purposes.  The  European  Geostationary  Navigation  Overlay 
Service  (EGNOS)  system  and  the  satellite  navigation  system  established  under  the  Galileo 
programme will give the EU independent access to GNSS technologies. This strategic move 
has  the  potential  to  generate  direct  and  indirect  socio-economic  benefits  for  the  European 
Union. 

The European Union has long recognised the need to have its own global satellite navigation 
system3. This  political  objective has a number of goals, including setting up the  first  global 
satellite  navigation  and  positioning  infrastructure  under  civilian  control,  completely 
independent  of  existing  systems.  The  added  value  of  the  European  GNSS  lies  not  only  in 
ensuring  Europe’s  independence  with  regard  to  a  critical  technology  but  also  in  yielding 
major macro-economic benefits for the European Union, catalysing the development of new 
services  and  products  based  on  GNSS  and  generating  technological  spin-offs  to  boost 
research, development and innovation4.  

Although  independence  in  global  satellite  navigation  is  the  main  driver  behind  the  Galileo 
programme, interoperability with existing and future satellite navigation systems, particularly 
the  US  GPS,  is  an  important  added  value.  Once  the  system  set  up  under  the  Galileo 
programme  is  operational,  market  users  will  benefit  from  the  interoperability  and 
multiplication of satellite navigation systems providing increased reliability and precision, and 

1 

2 

3 

The White House, Office of the Press Secretary. Press briefing by Assistant Secretary of Transportation, 
Gene Conti, 1 May 2000. 
COM(2010) 308 of 14.6.2010, Impact assessment, accompanying document to the Communication of 
the European Commission on Action Plan on Global Navigation Satellite System (GNSS) Applications.  
Council Resolution on the European contribution to the development of a Global Navigation Satellite 
System 

(GNSS) of 19 December 1994. 
4 

A detailed analysis was given in the Commission Communication on the status quo of the Galileo and 
EGNOS programmes published in 2007 (COM(2007) 261 final and COM(2007) 534/2). 

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most receivers will operate using data from several systems. Users also need back-up systems 
in  the  event  of  system  failure  or  voluntary  interruption  of  signals,  which  shows  the  value 
added of a civilian system. 
Governance and financial framework 

The  European  satellite  navigation  programme  Galileo  was  launched  in  2001.  Initially  the 
project was based on a Public-Private-Partnership with the Galileo Joint Undertaking (GJU) 
acting as a common management and funding platform. 

In 2006, GJU was replaced by the European GNSS Supervisory Authority (GSA), in charge 
of  managing  the  public  interest  aspects  of  the  European  GNSS  programmes.  The  European 
Space  Agency  (ESA)  was  responsible  for  the  technical  management  and  implementation  of 
the GNSS programmes with a combined funding of € 2.8 billion from the EU and the ESA. 

Adopted  in  2008,  the  GNSS  Regulation5  made  the  EU  the  sole  political  body  in  charge  of 
steering and fully funding the European GNSS policy. The GNSS Regulation set out the EU 
funding for the Galileo and EGNOS programmes for 2007-2013. The budget of €
 3.4 billion 
was split across the remaining of Galileo development phase, the Galileo deployment phase 
and the operation of EGNOS. 

The Commission’s proposal for the next multiannual financial framework for the EU Budget 
2014-20206  proposes  financing  the  GNSS  programmes  fully  from  the  EU  budget  with  a 
proposed ceiling of € 7 billion. 

1.2. 

Identified problems 

Progress on implementing the European satellite navigation programmes is hampered by two 
key problems:  

(1)  The  system  established  under  the  Galileo  programme  will  not  be  fully  operational 
and  will  not  independently  provide  all  five  services  in  2013  as  planned.  Since  its 
development  phase,  the  Galileo  programme  has  encountered  cost  overruns  and  delays  in 
delivering the system, the effects of which were partly prevented by a number of mitigation 
measures. However, the schedule set by the GNSS Regulation (according to which, by 2013, 
the  system  established  under  the  Galileo  programme  is  fully  operational  and  provides 
independently  the  Open  Service  (OS),  the  Safety-of-Life  service  (SoL),  the  Commercial 
Service (CS), the Public Regulate Service (PRS) and the Search and Rescue service (SAR)) 
cannot be met.  

(2) There is no definite financing and governance framework for the exploitation phase 
of  both  Galileo  and  EGNOS  programmes  after  2013.  The  GNSS  Regulation  covers  the 
period  2008-2013,  hence  the  development  and  deployment  phase  of  the  Galileo  programme 
and  the  start  of  the  exploitation  phase  of  EGNOS.  Due  to  cost  overruns  and  delays,  the 
deployment  phase  of  the  Galileo  programme  will  be  completed  in  2018/2019  and  the 
exploitation phase will start gradually in 2014. As the GNSS Regulation does not lay down 
the financing and governance framework for Galileo and EGNOS programmes after 2013, a 
new legal basis is needed for the systems to be operational, maintained and managed in the 
long term. 

5 
6 

Regulation (EC) No 683/2008 on further implementation of the Galileo and EGNOS programmes. 
COM(2011) 500 of 29.6.2011 ‘A Budget for Europe 2020’. 

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The  deployment  and  exploitation  phases  of  the  Galileo  programme  will  run  in  parallel  for 
around  five  years  (2014–2019).  During  this  period,  governance  of  the  Galileo  deployment 
phase should provide continuity, consistency and credibility towards third parties and achieve 
continuity of service without disruption for end users. The issue of governance of the Galileo 
exploitation  phase  needs  to  be  considered  and  should  gradually  adapt  to  needs  and  to  the 
experience gained from providing initial services. Governance for EGNOS operations needs 
to be set up urgently. 

1.3.  Who is affected, in what ways and to what extent? 

The  two  problems  outlined  above  hamper  the  provision  of  services  planned  by  the  GNSS 
Regulation:  without  funding  and  an  adequate  governance  framework,  the  infrastructure 
available in 2014 will not fully deliver any service.  This  would  affect  EU  citizens, industry 
and public authorities at various levels: 

• 

• 

• 

• 

The  growth  of  the  European  navigation  applications  industry  depends  on  the 
availability  of  a  European  GNSS.  If  there  is  no  European  GNSS,  this  whole  new 
sector will fail to emerge; 

Several economic sectors rely on the existence of a GNSS: 

Positioning information it provides drives transport activities in all forms and hence 
logistics systems that provide goods to EU consumers; 

Timing  information  is  used  to  synchronise  telecommunications  networks  and 
increasingly to power management systems, especially for the development of smart 
grids. 

Of  course,  these  industries  do  not  rely  today  on  a  European  GNSS  and  have  so  far 
satisfactorily  relied  on  the  US  GPS.  The  very  fact  that  US  GPS  provides  a  cost-effective 
solution to positioning and timing needs has accelerated the adoption of GPS-based devices in 
all aspects of EU citizens’ daily life. Therefore, the US GPS is seamlessly becoming a single 
point  of  failure  of  EU  critical  infrastructure,  which  means  that  a  disruption  of  GPS  signal 
provision would have a major impact on European society. 

2. 

ANALYSIS OF SUBSIDIARITY 

The EU’s right to act is based on Article 170 of the Treaty on the Functioning of the European 
Union7  and  the  GNSS  Regulation  on  the  further  implementation  of  the  European  satellite 
navigation programmes (EGNOS and Galileo)8. 

The  establishment  of  satellite  navigation  systems  cannot  be  sufficiently  achieved  by  the 
Member  States  as  it  exceeds  the  financial  and  technical  capacities  of  any  single  Member 
State. Therefore, it can be only achieved by action at EU level. 

The  GNSS  Regulation  states  that  the  European  Union  is  the  owner  of  all  tangible  and 
intangible assets created or developed under the programmes. As owner of all related tangible 
and  intangible  assets,  the  European  Union  must  ensure  that  all  conditions  to  operate  and 

7 
8 

OJ EU C 83/47 of 30.3.2010. 
OJ EU L 196/1 of 24.7.2008. 

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exploit the systems are in place when the first positioning, navigation and timing services are 
provided in 2014-2015. Therefore, governance must be of European nature. 

OBJECTIVES 

3. 
The  general  objective  of  this  proposal  as  enshrined  in  Article  170  of  the  TFEU9  is  ‘to 
contribute  to  the  establishment  and  development  of  trans-European  networks’  and  is  also 
cited in the flagship initiative of the Europe 2020 strategy10: ‘to develop an effective space 
policy to provide the tools to address some of the key global challenges and in particular to 
deliver Galileo [...]’.  
The political objectives are to: 

• 

• 

• 

• 

Set  up  a  first  global  satellite  navigation  system  (GNSS)  under  civilian  control 
completely independent of other existing systems, to provide uninterrupted GNSS 
services and a strategic advantage for Europe 

Improve  the  resilience  of  Europe’s  economic  infrastructure  by  providing  a  backup 
system in the event of signal failure from other systems 

Maximise  socio-economic  benefits  for  Europe  by  relying  on  more  accurate, 
available  and  robust  signals  by  unlocking  the  potential  of  high-precision  satellite 
navigation to a much fuller extent than currently possible 

Build Europe’s technical capability to develop, deploy and operate complex large-
scale infrastructures. 

These political objectives were the basis for defining the European satellite navigation policy 
in the GNSS Regulation, which aims to provide the EU with two satellite navigation systems 
established under the EGNOS and Galileo programmes: 

• 

• 

9 
10 

The aim of the Galileo programme is to establish the first global satellite navigation, 
positioning and timing infrastructure specifically designed for civilian purposes. The 
system established under the Galileo programme is completely independent of other 
existing  or  potential  systems  and  the  signals  emitted  by  the  system  can  be  used  to 
provide  five  services  (Open  Service,  Safety-of-Life  service,  Commercial  Service, 
Public Regulated Service, Search and Rescue service). 

The aim of the EGNOS programme is to improve the quality of signals from existing 
global navigation satellite systems which can be used to provide three services (Open 
Service, Safety-of-Life service, EGNOS Data Access Service). 

OJ EU C 83/124 Official Journal of the European Union 30.3.2010. 
Communication from the Commission COM(2010) 2020 of 3 Mars 2010 on ‘Europe 2020 — A strategy for smart, sustainable and inclusive growth’, 
p15. 

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4. 

POLICY OPTIONS 

4.1. 

Policy options to tackle problem 1: How to make progress in implementing and 
exploiting the European GNSS programmes 

4.2. 

Galileo 

The  following  options  could  be  considered  to  find  a  way  forward  on  implementing  Galileo 
infrastructure: 

(a) 

(b) 

Option 

(1) 
option 

Space segment: At Initial Operational Capability (IOC) planned in 2014-2015, all 18 
already  procured  satellites  should  be  deployed,  out  of  the  30  planned  for  Full 
Operational Capability (FOC). With the specific orbital characteristics of Galileo in 
mind,  three  theoretically  and  technically  feasible  final  constellations  can  be 
considered: 

(1)  Deploying 18 satellites as a final constellation; 

(2)  Deploying 24 satellites as a final constellation; 

(3)  Deploying 30 satellites as a final constellation. 

Ground segment: At IOC (2014-2015), only an intermediate ground infrastructure11 
(v2)  will  be  deployed,  allowing  Galileo  to  provide  navigation  signals  for  OS,  PRS 
and SAR. A subsequent ground infrastructure upgrade (v3) is currently planned for 
deployment between IOC and FOC to enable the provision of the stand-alone Safety-
of-Life  service  and  to  implement  full  PRS  capability.  Three  technically  feasible 
ground infrastructure configurations can be considered: 

(1)  Ground infrastructure v2, as will be reached at IOC, with no SoL-service; 

(2)  Ground infrastructure v3 with SoL service only available in interoperability 
with  the  US  GPS  (this  would  require  fewer  ground  facilities  and  make  the 
infrastructure simpler); 

(3)  Ground infrastructure v3 with SoL service available on a stand-alone basis; 

Table 1: Policy options for problem 1 

Space 
segme
nt 

Ground 
segmen
t  

Services 

Baseline 

(A.3) 

(B.3)  

Services  can  be  provided  stand-alone  as  defined  in 
the Galileo Mission Requirements Document 

(2) 
services option 

Revised 

(A.3) 

(B.2) 

Services  can  be  provided  stand-alone  as  defined  in 
Galileo  Mission  Requirements  Document,  except  for 
in 
SoL  service 

that  can  be  provided  only 

11 

The ground infrastructure comprises over 50 ground stations around the world. 

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(3) 
services option 

Reduced 

(A.2) 

(B.2) 

cooperation with GPS 

Services  can  be  provided  stand-alone  but  not  as 
defined 
in  the  Galileo  Mission  Requirements 
Document  (reduced  service  level).  SoL  can  be 
provided only in cooperation with GPS.  

Degraded 

(4) 
services option 

(A.1) 

(B.1) 

Services  cannot  be  provided  stand-alone,  only  in 
interoperability  with  GPS,  not  as  defined  in  Galileo 
Mission Requirements Document. 

(5)  Termination 
of programme 

none 

none 

none 

EGNOS 

The EGNOS system is already in use, but requires operations, maintenance and evolution of 
its  services  over  the  next  years.  Therefore,  only  two  policy  options  can  be  envisaged:  (1) 
Continuation of the programme or (2) Termination of the programme. 

As  EGNOS  SoL  is  already  operational,  continuation  of  the  programme  is  the  only  possible 
option:  having  declared  the  Safety-of-Life  service  operational,  the  Commission  has  secured 
the  commitment  of  end-user  communities  to  use  EGNOS.  This  is  leading  end-users,  in 
particular in the aviation sector, to heavily invest in adapting their systems to EGNOS. This 
calls for a long-term commitment of the Commission to provide EGNOS services. 

4.3. 

Policy options for problem 2: Governance scheme to exploit both systems 

The  governance  framework  needs  to  be  defined  based  on  the  management  functions, 
organisation  and  legal  forms.  As  regards  the  functions  and  their  organisation,  two  levels  of 
management need to be considered: (1) political supervision of the programmes, that remain 
the responsibility of the Commission, on behalf of the EU, to set the general objectives and 
mission requirements, and to decide on and monitor the budget, (2) programme management 
to be carried out by one entity, ensuring that systems achieve the aim stated by the political 
supervision  level  on  time  and  to  cost,  including  coordinating  and  monitoring  all  activities 
involved in achieving this aim. 

4.3.1.  Options for programme management 

Given that the EU retains responsibility for political supervision of the programmes, there are 
four policy options for programme management: 

(1)  European Commission 

(2)  EU joint undertaking 

(3)  EU regulatory agency 

(4)  EU public company 

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Using the pre-screening criteria, focusing on feasibility, option 1 (European Commission) and 
option 2 (EU joint undertaking) were rejected. Options 3 and 4 were analysed further. 

5. 

IMPACT ASSESSMENT  

5.1. 

Analysis of impacts for problem 1: Way forward on further implementation of 
the European GNSS programmes 

The  impact  of  the  five  options  on  completing  the  full  operational  capability  of  the  system 
established  under  the  Galileoprogramme  can  be  assessed  from  the  point  of  view  of  benefits 
(indirect benefits and direct revenues), costs (infrastructure completion and exploitation costs) 
and competitiveness of the EU industry. 

5.1.1.  Analysis of benefits 

The  European  Space  Agency  has  performed  simulations  to  assess  navigation  performance, 
expressed  in  terms  of  navigation  accuracy  and  availability.  The  objectives  for  Galileo’s 
performance  were  set  by  the  Galileo  Mission  Requirements  Document  on  an  accuracy  of  4 
meters  horizontally  and  8  meters  vertically  (dual  frequency  service),  with  an  availability  of 
99.5 %. 

Table 2: Simulated navigation accuracy by Galileo infrastructure option12 

(m)/availability 99.5 % 

(1) Baseline option 
(2) Revised services option 
(3) Reduced services option 
(4) Degraded services option 
(5) Termination of Galileo programme 

Horizontal accuracy 
Mean 
accuracy 
(99.5 %) 
3.3 
3.3 
8 
80 
N/A 

Worst user-
location 
accuracy 
3.7 
3.7 
25 
250 
N/A 

Vertical accuracy 

Mean 
accuracy 
(99.5 %) 
7 
7 
11.5 
138 
N/A 

Worst user-
location 
accuracy  
7.4 
7.4 
30 
451 
N/A 

Options  1  and  2  meet  the  objectives,  even  for  the  worst  user  locations,  while  option  3 
approaches these requirements. The accuracy of option 4 is insufficient for the vast majority 
of users. These values show a sharp degradation of performance if the number of satellites is 
decreased. 

The  number  of  satellites  affects  service  continuity,  i.e.  navigation  at  the  Earth’s  surface, 
which is less even with a lower number of satellites, and the robustness of the system, i.e. 
the sustainability of system performance under perturbations such as satellite failure. Option 4 
will  be  less  robust  as  the  unforeseen  breakdown  of  one  or  more  satellites  would  lead  to  a 
sharp deterioration in navigation performance and even in service provision failure. Options 
with larger constellations would be less affected by such events. 

12 

These simulations are dependent on a number of assumptions that will be updated according to how the 
system  will  actually  perform  once  deployed,  e.g.  Orbit  Determination  and  Time  Synchronisation 
(ODTS) accuracy. 

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Table 3 shows the availability of services to be provided by the system established under the 
Galileo  programme  alone  and  in  combination  with  the  US  GPS  under  various  policy 
options13. 

Table 3: Availability of services per infrastructure option 
Availability of service as per MRD 
CS 
SAR 

PRS 

OS 

(1) Baseline 
option 

(2) Revised 
option 

(3) Reduced 
services 
option 

Stand-
alone 

With GPS 

Stand-
alone 

With GPS 

Stand-
alone 

Yes 

Yes 

Yes 

Yes 

Close to MRD 
but limited 
robustness 

With GPS 

Yes 

Mediocre 
accuracy and 
poor 
continuity 
Reduced service 
level 

No 

N/A 

(4) 
Degraded 
services 
option 

(5) 
Termination 
of the 
programme 

Stand-
alone 

With GPS 

Stand-
alone 

With GPS 

Service available as per 
mission requirements 

SoL 

Yes 

Yes 

No 

Yes 

No 

Yes 

No 

Yes 

N/A 

Yes 

N/A 

Yes 

N/A 

Reduced 
capacity 
limited to 
Augmentation 

Yes 

N/A 

Yes 

N/A 

MRD 
compliant but 
limited 
robustness 
N/A 

Mediocre 
accuracy and 
poor 
continuity 

N/A 

No 

N/A 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes longer 
localisation 
time and poor 
robustness 
Reduced service 
level 

No 

N/A 

N/A 

No 

N/A 

Degraded service 
level 

No 

N/A 

Service reduced 

Service degraded 

Service not available 

The prospect of interoperating with the US GPS, especially for options 3 and 4, would lead to 
a  major  improvement  in  the  accuracy  of  the  navigation,  velocity  and  time  services  but  has 
several consequences: 

• 

• 

13 

The  system  established  under  the  Galileo  programme  will  be  partially  or  fully 
dependent on interoperability with US GPS. Europe will not be able to be one of 
the  leaders  of  GNSS  innovation.  It  will  lose  its  capacity  to  influence  future 
navigation standards and will weaken the competitiveness of its industry in the area 
of  applications  and  downstream  technology  developments  precisely  where  most  of 
the navigation market is booming; 

The  system  established  under  the  Galileo  programme  will  not  become  a  separate 
global navigation satellite system as desired by the stakeholders, but rather an add-
on  to  the  US  GPS.  Consequently,  the  failure  of  one  system  will  impact  the 
combined performance of the systems perceived by the users.  

This table is based on the information available in September 2011 from the European Space Agency 
and is deliberately simplified. 

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These considerations are important as regards the provision of OS, PRS and CS services. As 
regards SAR and SoL services: 

• 

• 

The SAR service is operational with 18 equipped satellites, and thus its performance 
does  not  depend  on  the  number  of  satellites  envisaged  under  the  various 
infrastructure  options,  though  the  degraded  option  4  SAR  could  generate  longer 
localisation time and poor robustness due to potential satellite breakdown; 

The  SoL  service  alternatives  mainly  depend  on  deployed  ground  infrastructure. 
Option 1 will be able to provide a stand-alone SoL service, options 2 and 3 will only 
be  able  to  provide  a  SoL  service  in  interoperability  with  the  US  GPS  and  option  4 
will not provide the SoL service. 

5.1.1.1.  Indirect benefits 

The total cumulative monetised benefits (economic, social and environmental) of the GNSS 
programme until 2034 will depend on the chosen option. They have been modelled over a 20-
year period in order to take into account a complete lifecycle of the system established under 
the Galileo programme, using a model developed by the European GNSS Agency. 

The total indirect benefits presented in Table 4 are equal to the sum of the benefits generated 
by three sources: 

• 

• 

• 

upstream  market  and  spill-over  (investment  in  space  infrastructure  and  spill-over 
effects of research and development investment) 

downstream market growth (growth of the GNSS application market) 

public  benefits  (external  effects  divergently  or  indirectly  generated  by  GNSS 
applications such as benefits for public institutions, society and users). 

Table 4: EGNSS indirect benefits per option — 2014-2034 

Economic benefits 

Social and 
env. benefits 

(€ bn/constant prices 2011) 

Upstream 
market growth 

Downstream 
market growth 

Public 
benefits 

Total benefits 

(1) Baseline option 
(2) Baseline revised services option 
(3) Reduced services option 
(4) Degraded services option 
(5) Termination of Galileo programme 

Source: European GNSS Agency 

19.94 
19.94 
17.30 
14.83 

6.76 

26.43 
26.43 
20.64 
15.36 

1.27 

87.41 
87.41 
73.43 
64.84 

15.02 

133.77 
133.77 
111.37 
95.04 

23.05 

The indirect benefits of EGNOS are included in all options. The last option implies Galileo 
programme  termination,  but  EGNOS  is  exploited  and  services  are  offered.  EGNOS  is 
consequently the only source of benefits under option 5. 

5.1.2.  Direct revenues 

Apart  from  socio-economic  benefits,  direct  revenues  are  expected  to  be  generated 
through  services  provided  by  the  GNSS  programmes.  Possible  revenue  streams 

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include  the  Commercial  Service  (access  fees  for  authentication  services  and  High 
Precision  Positioning  Service)  and  the  Public  Regulated  Service  (license  fees  on 
receivers,  activation  fees  on  receivers  and  access  fees  for  signals)14.  Additional 
indirect revenues for services where automated denial of access is hardly conceivable 
(e.g. Safety of Life) could be envisaged through indirect charging mechanisms but at 
present there is no legal framework for such mechanisms. 

(EUR bn)/constant prices 2011 

Table 5: EGNSS potential direct revenues per option 
CS revenues 

PRS min. and 
max. revenues 

(1) Baseline option 

(2) Baseline revised services option 

(3) Reduced services option 

(4) Degraded services option 

(5) Termination of Galileo programme 

0.24 – 0.34 

0.24 – 0.34 

0.24 – 0.34 

0.00 

0.00 

1.32 

1.32 

0.00 

0.00 

0.00 

Total average 
2014-2034 

1.61 

1.61 

0.28 

0.00 

0.00 

Expected revenues from public regulated services and commercial services are no more than 
€ 1.61 billion over the 20-year pe riod, which is less than 10 % of the total costs for the next 20 
years.  It  is  clear  that  the  European  GNSS  will  not  be  profitable  enough  to  be  run  on  an 
independent  basis  and  will  need  public  financing  in  the  future.  Direct  revenues  will  never 
have the potential to offset the operation costs of the programmes. 

5.1.3.  Analysis of costs 

The  options  vary  regarding  the  number  of  deployed  satellites  and  the  specifications  of  the 
ground  segment.  For  each  option,  costs  have  been  assessed  not  only  to  complete  the 
infrastructure,  but  also  to  cover  the  exploitation  phase  for  Galileo  and  EGNOS.  The  cost 
estimations  have  been  modelled  over  the  same  period  as  the  benefits:  2014-2034,  which 
corresponds to three seven-year periods of the EU multiannual financial framework. 

Table 6: European GNSS programmes costs per option 2014-2034 

(€ bn)/constant prices 2011 

(1) Baseline option 

(2) Baseline revised services option 

(3) Reduced services option 

(4) Degraded services option 

(5) Termination of Galileo programme 

5.1.4.  Sector-specific impacts 

EU MFF 
2014-2020 

EU MFF 
2021-2034 
(2021-27, 
2028-34) 

7.8 

7.0 

6.5 

5.6 

2.4 

12 

11.5 

10.8 

10 

1.4 

Total 

19.8 

18.5 

17.3 

15.6 

3.8 

The  analysis  reviews  the  impact  on  the  competitiveness  of  the  sector(s)  targeted  by  the 
initiative,  their  suppliers  (upstream  sectors)  and  their  clients  (downstream  sectors  and  end-
users). The value chain analysis covers four main segments: 

14 

Potential revenue generated by the PRS will depend on political choices to be made. 

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11 

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• 

• 

• 

• 

Upstream:  European  space  industry  contributing  to  the  building  of  the  global 
satellite navigation system 

Service  provision:  European  industry  supplying  commercial  or  public  positioning, 
navigation or timing services 

Downstream: European applications industry, which depends on service provision, 
supplying the hardware and software needed to exploit satellite signals 

End-users: industries using services and applications.  

It focuses on the European applications industry and end-users, where the highest impact on 
competitiveness is expected. 

Table 7: Summary of the competitiveness impact 

(1-2) Baseline and 
revised services options 

Upstream 
Service provision 
Downstream 
End-users 
Total 

+ + 
+ + 
+  
+ + 
+ + 

(3-4) Reduced and 
degraded services 
options 
+ 
+ 
+ 
+ + 
+ 

(5) Termination of 
Galileo programme  

– 
– 
– 
0 
– 

–: negative impact on competitiveness 

+: positive impact on competitiveness 

The review of the impact on competitiveness of the different options shows that the baseline 
and revised services options are likely to boost significantly EU innovative competitiveness, 
with  the  creation  of  new  markets/business  sectors  and  with  spill-over  effects  improving 
business  processes  and  stimulating  innovation  in  other  sectors.  A  positive  impact  is  also 
expected in terms of cost and price competitiveness. 

5.2. 

Analysis of impacts for problem 2: Governance scheme to exploit both systems 

The  options  for  problem  2  are  assessed  qualitatively  in  terms  of  their  compliance  with  the 
governance  objectives  defined  in  the  Financial  Regulation,  i.e.  feasibility,  decision  making, 
robustness,  scope  for  evolution,  impact  on  EU  economy,  consistency  with  EU  policies  and 
promotion  of  EU  interests  and  EU  control  and  accountability.  These  objectives  are  grouped 
by the criteria of effectiveness, efficiency and coherence. 

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Effectiveness 

Efficiency 

Coherence 

• 

• 

• 

• 

• 

• 

EU regulatory 
agency 

EU public 
company 

High feasibility 

• 

Fast decision making 

Strong 
robustness: 
Proven  legal  scheme. 
Under umbrella of Art 
340 and 343 of Treaty 
on  the  Functioning  of 
the European Union 

• 

• 

• 

poor 
Very 
feasibility:  Neither 
precedent  nor  clear 
rules  for  the  EU  to 
create  an  EU  public 
company.  

Fast  decision  making 
and flexibility 

Poor 
robustness: 
operation  would  be 
based  on  the  national 
law  of  the  Member 
State of incorporation 

• 

• 

for 

Medium 
scope 
developme
nt, 
requiring 
amendment
s  of  the  EU 
legal  basis 
establishing 
the agency 

Positive 
impact  on 
EU 
economy 

• 

Poor  scope 
for 
developmen
t 

Ambiguous 
impact  on 
EU 
economy 

Strong 
consistency 
with 
policies 

EU 

Strong  EU 
control  and 
accountabilit
y 

Medium 
consistency 
with 
EU 
policies  and 
control 
EU 
and 
accountabilit
y 

6. 

COMPARISON OF OPTIONS 

6.1. 

Comparing  the  options  for  problem  1:  How  to  make  progress  in  further 
implementing the European GNSS programmes  

Effectiveness 

Effectiveness  related  to  compliance  with  the  general  policy  objectives  is  based  on  a 
qualitative comparison of the technical characteristics of the options and their impacts. 

Table 8: Compliance with general policy objectives 
Build Europe’s 
Increase resilience 
Set up an 
technical GNSS 
of EU economic 
Independent 
capability 
infrastructure 
GNSS 

(1) Baseline  

(2) Revised services  

100 % 

75 % 

100 % 

100 % 

100 % 

100 % 

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(3) Reduced services 
option 
(4) Degraded 
services option 
(5) Termination of 
Galileo programme 

75 % 

0 % 

0 % 

50 % 

0 % 

0 % 

100 % 

25 % 

0 % 

: No compliance to objective 

: Full compliance with objective 

Efficiency 

The efficiency of the policy options is assessed based on the indirect benefits, direct revenues 
and costs of each option, depending on the number and quality of the services enabled. 

(€ bn) 
Constant prices 2011 and 
discounted prices at 4 % 

Table 9: Cost-benefit analysis of policy options: 2014-2034 

Indirect benefits  Direct revenues 

Costs 

Net benefits 

Constant 
prices 

Discount. 
prices  

Constant 
prices 

Discount. 
prices 

Constant 
prices 

Discount. 
prices 

Constant 
prices 

Discount. 
prices 

(1) Baseline  

133.77 

81.26 

133.77 

81.26 

1.61 

1.61 

1.05 

1.05 

19.8 

18.5 

14.65 

115.58 

67.66 

13.69 

116.88 

68.63 

111.37 

67.59 

0.28 

0.20 

17.3 

12.80 

94.35 

54.99 

95.04 

57.53 

0.00 

0.00 

15.6 

11.54 

79.44 

45.99 

23.05 

14.00 

0.00 

0.00 

3.8 

2.81 

19.25 

11.19 

(2) Baseline revised 
services  
(3) Reduced services 
option 
(4) Degraded 
services option 
(5) Termination of 
Galileo programme 

Coherence 

Options  1  (Baseline)  and  2  (Revised  services)  are  both  in  line  with  the  EU  political 
framework,  have  a  very  positive  effect  on  the  competitiveness  of  the  EU  industry  and  have 
the potential to yield strategic benefits for the EU. 

Options  3  (Reduced  services)  and  4  (Degraded  services)  are  similar:  both  partially 
inconsistent with the EU’s objectives and priorities and both have a fairly positive effect on 
competitiveness. 

Option  5  (Termination  of  the  Galileo  programme)  is  not  at  all  consistent  with  the  EU’s 
declared objectives and has a negative impact on competitiveness.  

As  a  conclusion,  taking  into  account  all  impacts,  aspects  of  efficiency,  effectiveness  and 
coherence  and  in  particular  the  potential  cost  savings,  option  2  (Revised  services)  would 
appear to be the preferred option. 

6.2. 

Comparing  the  options  for  problem  2:  Governance  scheme  to  exploit  both 
systems 

Following a comparison of impacts of the EU Regulatory Agency and EU public company, 
the EU regulatory agency appears to be the best suited to fulfil the objectives of programme 
management as this set-up is highly coherent, effective and efficient from the EU’s point of 
view.  

Due to the general concerns over the growth in the number of EU agencies, it is unlikely that 
the  European  Parliament  or  the  Council  of  the  EU  will  accept  the  creation  of  a  new  EU 

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regulatory agency. Out of the existing EU regulatory agencies, the European GNSS Agency is 
the  most  suitable  candidate  as  it  is  a  part  of  existing  governance  structures  of  the  GNSS 
programmes and it has initial expertise in the relevant field. 

However, the European GNSS Agency in its current form cannot take over immediately the 
programme  management  tasks  of  the  exploitation  phase  as  its  current  mandate  is  limited  to 
security  and  market-related  issues  and  it  does  not  have  sufficient  financial  and  human 
resources. 

7. 

MONITORING AND EVALUATION 

Output indicators will be drawn from the features, quality and specifications of EGNOS and 
Galileo  services  and  the  extent  to  which  they  correspond  to  those  set  out  by  the  GNSS 
Regulation, the on-target date delivery within the target costs and the stability, sustainability 
and efficiency of the governance scheme. The competitiveness of the European-based GNSS 
industry, the use of services, including market penetration, the number of jobs created and the 
indirect and direct benefits provided by the GNSS programmes will be result indicators. 

The  Commission  will  ensure  that  all  contracts  and  agreements  concluded  in  the 
framework  of  the  GNSS  programmes  will  provide  for  supervision  and  financial 
control  by  it.  The  focus  in  all  monitoring  and  evaluation  mechanisms  will  be  on 
minimising  programme  cost  overruns  and  delays  in  delivering  services.  To  do  this 
the  Commission  will  propose  a  strategic  framework  listing  the  main  measures, 
estimated  budget  and  timetable  by  30  June  2014,  an  annual  work  programme  with 
detailed  measures  and  indicators,  an  annual  implementation  report  evaluating  the 
fulfilment of these measures and an interim evaluation focusing on quantitative and 
qualitative results achieved by 30 June 2017, in time to prepare the next multi-annual 
financial framework. 

In  addition  to  these  standard  measures,  the  Commission  will,  when  exercising  its 
powers of political supervision over the Galileo and EGNOS programmes, improve 
the monitoring and evaluation mechanisms over the programme management entity 
by  requesting  detailed  annual  management  plans  and  implementation  reports,  by 
steering  regular  programme  progress  meetings  and  by  carrying  out  financial  and 
technological audits. 

In addition, programmes monitoring should involve Member States, for example by 
using  their  technical  capabilities  to  provide  input  on  technical  monitoring  of  the 
programmes  and  to  propose  key  performance  indicators  against  which  the 
programmes will be evaluated. 

Lastly,  in  the  day-to-day  management,  the  Commission  will  propose  a  risk 
management  mechanism  and  management  tools  to  minimise  the  probability  of 
programme  cost  overruns  based  on  better  cost  estimation,  taking  stock  of  previous 
experience and actual system implementation. 

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