My honourable friend the Minister of State for Transport (Stephen Ladyman) has made the following Ministerial Statement.

I attended the transport session of the Transport, Telecommunications and Energy Council, held in Luxembourg on 7 and 8 June. The German Minister for Transport, Building and Urban Affairs, Mr Wolfgang Tiefensee, was in the chair.

The council adopted a resolution on the Galileo satellite navigation programme, concluding that the current concession negotiations had failed and should be ended. The resolution asks the Commission to prepare detailed alternative proposals for taking the project forward, to be put to the October Transport Council. The council underlined that these should be based on an additional thorough assessment of costs, risks, revenues and timetable. The Commission was also asked to submit financing options, a procurement strategy, concepts for the subsequent operation and exploitation phase, and proposals for a sound public sector governance structure. The presidency made clear the possibility that, if suitable answers were not found, the project would be ended. It was also noted that the council should not rule out the involvement of private finance.

In the ensuing debate, I accepted that Galileo had the potential to be a key project, as it is described in the resolution, but that we should not proceed with it unless the costs were justifiable. While it was clear that the current concession negotiations had failed, the risks in terms of costs and timetable would not be reduced and might be increased by moving to a public procurement. A public/private partnership remained the UK’s preferred approach. Open competition and open tendering were essential. It was also essential that funding for Galileo, if the October council agreed to proceed with it, had to be found within the limits of the current budget allocations, without reopening the EU financial perspective.

I welcomed the presidency’s acceptance that the project could be ended if acceptable answers could not be found. I was able to accept the council resolution but submitted, jointly with the Netherlands and supported by Slovakia and Cyprus, a minutes statement stressing our commitment to the PPP principle for major infrastructure projects, our concerns on the potential increased costs of public procurement, the need for a reassessment of the business case for Galileo, competitive procurement, sound risk management and ensuring that any extra funds are kept within the current EU financial perspective.

The council reached political agreement on three of the current legislative proposals in maritime transport: the directive amending Directive 2002/59/EC, on vessel traffic monitoring; the recast of the existing directive, as amended, on port state control; and the directive on investigation of maritime accidents, amending Directives 1999/35/EC and 2002/59/EC. These were all acceptable to the UK.

There was a progress report on the draft regulation on the liability of carriers of passengers by sea and inland waterways in the event of accidents. The UK is broadly content with this proposal but, like most member states, is opposed to its extension to inland waterways.

There was a policy debate on the setting-up of an EU regional/co-operative data centre (RDC) for the long-range identification and tracking of ships (LRIT), to become available in late 2008 under an IMO initiative. Most member states supported an RDC in principle. I welcomed the potential added value of an EU RDC and noted costs, systems configuration and data confidentiality as the key issues to resolve. The Commission gave a commitment to provide information ahead of a formal decision at the next Transport Council in October.

The council reached a general approach on a regulation repealing Regulation 954/79 on ratification of the United Nations convention on a code of conduct for liner conferences. Regulation 954/79 had become redundant following repeal of the block exemption held by this sector of the shipping industry.

Conclusions were adopted on a European energy strategy for transport as part of the Lisbon process. The UK is content with the conclusions.

The council reached a general approach on a directive bringing up to date the rules on transport of dangerous goods by road, rail and inland waterway. The general approach was acceptable to the UK.

There was a progress report on a directive on rail interoperability. The UK supports this directive, which is a key element in the establishment of a single market.

In air transport, the council reached a political agreement on an amending regulation to extend the role of the European Aviation Safety Agency (EASA) to flight operations, personnel licensing and the safety oversight of third-country aircraft. The political agreement was acceptable to the UK.

The council also reached a general approach on a regulation on rules for the operation of air services, a recast version of the third aviation package of 1992, which set up the aviation single market. The general approach was acceptable to the UK. Two joint statements were agreed, one on working conditions of employees of air carriers in member states other than their own, and the other, in response to a UK suggestion, on access by third countries to the internal air transport market.

A resolution was adopted on the establishment of a joint undertaking to implement the SESAR programme, the new generation European air-traffic management system. The resolution was acceptable to the UK.

The council adopted conclusions agreeing a Community position on aviation emissions trading, in preparation for the September session of the International Civil Aviation Organization (ICAO). The conclusions were acceptable to the UK.

Under AOB, the presidency reported that there would be a further session of conciliation negotiations with the European Parliament on the third railway package, and it was hoped that agreement would be reached.

Among items adopted without debate were:

a decision authorising member states to ratify the Maritime Labour Convention 2006 of the International Labour Organisation;

conclusions following the Commission communication on extension of the major trans-European transport axes to the neighbouring countries and guidelines for transport in Europe and neighbouring regions; and

a decision authorising the Commission to negotiate with the Danube commission the conditions and arrangements for the accession of the European Community to the Belgrade convention.