Stay away from big infrastructure projects, Commission told

The auditors examined the handling of the project between 2003 and 2006, concluding that if the EU wants to get involved in similar projects, “The Commission must ensure it has access to the appropriate management tools.”

The Galileo programme, conceived in 1994, was the first of its kind in several respects: it was the first close collaboration between the European Space Agency and the Commission on such a large programme, the first industrial programme to be managed at European level and the first time the Commission participated in a public private partnership.

But failure to agree with industry over the financing and running of the project has set back technological development by five years. As of the end of 2008, no operational satellites had been launched, and cost estimates for the development and validation phase had almost doubled from €1.1 billion to €2.1 billion.

The auditors examined which factors accounted for the failure to agree with industry on the role of the private sector, and what accounted for the delays and cost overruns in developing the technology.

The Court concludes that management of the development and validation phase was inadequate. Galileo experienced problems at different levels: there was no strong manager, no strong strategic sponsor, and the Commission did not step in to proactively direct the programme.

Layered on top of these management and leadership failures, Member States intervened in the interest of their national industries and held up decisions. Compromises were forced on Galileo as a result, which led to implementation problems, delays and cost overruns.

The problems go all the way back to the way to the terms under which the public private partnership was set up. It was, say the auditors, “Inadequately prepared and conceived,” and ultimately, “unrealistic.”

This meant those supervising the technological development were seriously constrained by governance issues and an incomplete budget.

Some of these failures relate to the fact the Commission was funding its contribution to Galileo through the Sixth Framework Programme, which the auditors say was unsuited to funding market development activities.

In its defence, the Commission says the Court of Auditors does not take account of the fact that in the period under consideration the programme involved large numbers of public sector stakeholders, “with different institutional roles and responsibilities.”

In 2007 the Commission was given the mandate to manage the deployment phase of Galileo. Since then, it has started to adapt its management capacity and taken on external advisers. It promises to learn the lessons of Galileo, “to improve the management of large infrastructure programmes.”