Monday, November 19

The White Elephant Salesman says that White Elephants are good!

The British MP's committee rightfully castigated the UK Government and the EC for wanting to find this white elephant of a public sector behemoth. But never under-estimate the power of the public sector to suck on the tit of the taxpayer. Read this full column in the FT and try to figure out 2 things (1) what's the tangible cost benefit analysis to my tax pounds investment and (2) why did the private sector not invest the money that you have to come to me? No answers!

When will these chaps stop this habit of hitting the taxpayer for elitist projects?

I suppose the writers are totally disinterested observers in this Galileo project?

Read and Weep!

Why the Galileo project must go ahead
By Pierre Bartholomé and Kevin Madders

Published: November 18 2007 17:55 Last updated: November 18 2007 17:55

Galileo, Europe’s answer to the US global positioning system, is in trouble. Finance ministers are squabbling over a €2.4bn ($3.52bn) funding gap after a private consortium pulled out. A committee of British MPs has called for it to be put on ice unless there is a more convincing cost-benefit analysis.

The system was supposed to be available from 2010. Its accuracy would be measured in centimetres, not metres as with GPS, and visibility would improve – making it perfect for aircraft and other purposes, adding up to a huge civilian market. But GPS III, due in 2012, will also be more precise and reliable. So, if Galileo comes on line only around 2013, as present estimates suggest, it will not be able to steal a march on GPS.

Given the strength of the case against, it is hardly surprising to find ministers tongue-tied when defending Galileo. However, we believe Europe should go ahead with Galileo – but only under certain conditions.

Galileo is a technological place-marker. Have it, and you will be a leader in understanding and exploiting the potential of one of the biggest technologies to have arisen in the past 50 years. Shun it, and you will end up less well equipped to reap the benefits of positioning from space.

It is true that investing only in applications, not the system itself, could produce some of the benefits. But not all. There is no substitute for knowing a fundamental tool such as this one inside out, for the simple reason that we do not know many of the applications yet. The best way to make the innovative jump comes from making and then running the system.

There is no doubt Galileo can fulfil this role. It is superbly designed. We do not think it necessary for Galileo to be better than GPS III. It needs to be equivalent, so that Europe is in the game. If it stays out now, it will be much harder ever to get in, because this is technology that evolves rapidly.

There is also the chance that the additional services – for example, early warning of failure for safety-critical users such as airlines – will pay handsomely. The market is there. But this is not really the point when one enters a world game such as this. Contrary to what the UK House of Commons transport committee’s report suggests, not much trust can ultimately be placed in mere cost-benefit analysis with fundamental ­enabling infrastructures of this kind. Such analysis tends to be too crude because hard data are necessarily unavailable.

It was for the same reason that the UK could not see the value of communications satellites for Europe in the 1970s, which in fact turned into a ­powerful market for applications such as television and the internet.

Spatial positioning technology is in the same league as previous fundamental technologies, such as transistors, computers and mobile phones. We must get on with making sure the chances can be seized.

However, there are many ways ­Galileo can come unstuck, especially managerial and political. It is essential that delays are minimised. The system’s design should not be tampered with to play catch-up with GPS, for example, or downgraded as suggested by the transport committee report.

The European Commission must assume clear ownership and top-level management responsibility, and equip itself to exercise the role of supremo effectively. All those involved will have to allow it to meet its targets, working with and directing the European Space Agency as prime contractor.

European Union member states must resist the temptation to interfere in the project once it kicks off anew. On the Commission’s side, it needs to be more pragmatic about allocating work between countries. The normal rigours of open competitive bidding will ­probably have to be relaxed for this case. The Commission should aim for a compromise.

Policymakers need to stop duping themselves and others: it is idle to assume commercial revenue will cover all operations costs. The EU must plan for a sustaining budget. However, it should also look at the merits of slicing up and auctioning individual Galileo commercial services as the market ­ripens. The EU should guarantee far better transparency.

If ministers endorse a Galileo reorientated on these kinds of premises, it can turn the system into an asset for the citizens and security of Europe.


Mr Bartholom√©, former head of the European Space Agency’s satellite communications design team, and Mr ­Madders are partners in the consultancy, Systemics Network International. Tony Ballard of Harbottle & Lewis also contributed to this article


All this to be taken with a grain of piquant salt!!!

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