Galileo Project

Lord Moonie
asked Her Majesty's Government:

What equipment and services are expected to be supplied by British industry to the European Space Agency's Galileo project; what benefits are expected for the United Kingdom from the system when in service; and what financial contribution to the project has been or will be made by Her Majesty's Government. [HL5881]

The Minister of State, Department for Innovation, Universities and Skills (Lord Drayson)
The EU and member states of the European Space Agency (ESA) have jointly funded the design and initial development phases of Galileo.

Up to May 2008 (the latest figures available) UK companies had contracts for goods and services in ESA's Galileosat programme for the development and validation phase. This is valued at £300.4 million out of a total budget of £1,691.6 million weighted to 2008 economic conditions. The deployment and operational phase which follows will see the Galileo programme achieve full operational capability (FOC) and is now being procured by ESA on behalf of the European Commission through an open tender competition in six work packages. A number of UK companies have been down-selected to compete in all but the launch provider work package of this tender competition. This process is on-going and it is too early to say which work packages could be won by UK companies.

A study published in December 2007 by ESYS Consulting—jointly commissioned by DFT and BNSC—concluded that the UK gross value added from downstream applications, using both GPS and Galileo, could be approximately £1.3 billion a year by 2025. Total cumulative benefits from 2013, when Galileo is expected to be in service, to 2025 are estimated to be £14.2 billion.

By the end of 2008 the UK will have provided £98.45 million, to the ESA element of the programme, leaving a balance of £69.60 million to be funded. This amounts to a total UK investment of £168.05 million. The next phase of the Galileo programme—the deployment and operation of the system (2010-13)—and all future funding for Galileo will be paid for wholly from the EU budget. No further contributions are to be made to the project via ESA.

The EU funding of Galileo between 2007 and 2013 has been capped at £3.4 billion. The European Commission estimates a further £6 billion will be needed for operation and maintenance costs from 2013-30. In terms of the EU contribution, the position is that EU member states contribute to the Community budget as a whole and not to individual programmes within it. The UK contributes around 17 per cent of the Community budget or 12.6 per cent after abatement. There is therefore no specific United Kingdom contribution to this phase of Galileo.