UK companies say Brexit already excludes them from EU work

March 21, 2017

 

LONDON — British space hardware and services companies on March 20 said they were already feeling Brexit’s effects as industrial bidding teams preparing for European Commission contracts exclude British companies.

These companies said they were awaiting a statement from the British government to the effect that Britain would remain in European Commission-owned programs including the multibillion-euro Galileo positioning, navigation and timing and Copernicus Earth observation programs.

Both projects have begun operations and are assured of long lives with successive generations of satellites, ground equipment and service requirements.

Other European Commission programs include the Horizon 2020 technology-stimulation program and a Space Situational Awareness (SSA) program that has gained initial traction and may one day be large.

Britain is not expected to leave the European Union before 2019 at the earliest, and the parameters of its separation are yet unknown. British officials have said they are likely to want to remain in some EU programs but they have not specified which ones.

UK companies being left off bidding teams

In the absence of explicit statements about future financial contributions to EU space efforts, companies outside the U.K. are prudently excluding British partners as they assemble their bidding teams to avoid being declared ineligible when the contracts are competed, said Richard Peckham, co-chair of Britain’s Satellite Finance Network (SFN) and a director at Airbus Defence and Space.

Peckham and other British industry officials addressed the topic at the annual SFN Conference here.

“The most topical subject for us at the moment is the next steps in the Brexit debate,” said Steve Smart, senior vice president and head of space systems at CGI, a diversified engineering services company.

“There’s an increasing number of European Union-funded space projects — Galileo, Copernicus and so on — and we really want to make sure the UK’s space interests are at the forefront of the Brexit negotiations. My company is one of a number of companies that are in a similar position here,” Smart said.

CGI, which includes the former Logica plc, is heavily involved in the operations of the Galileo satellites and security aspects of the Galileo networks.

Rupert Pearce, chief executive of mobile satellite services provider Inmarsat — which does not do a lot of business with the EU — said his company has seen the same thing.

“It’s worse than” just being left out of bidding teams for future work, Pearce said. “We’re being treated as if we were already out of Europe — period. That’s what has happened — not just is happening, but happened.

“We’ve just seen the attitude from the Commission and we've seen anecdotes of people being eased quietly away from procurements even though they are technical qualified.

Brexit’s impact has been ‘immediate’

“So if anyone thinks that the prospect of Brexit hasn't already had an immediate impact on the ability of UK companies to compete for these European Commission-based propositions, they’re smoking something. Of course it has happened,” Pearce said.

One British industry official said his company had written to the British Department for International Trade asking that the government signal its intention to remain in these large EU space projects.

One small company, Tyvak of California, which specializes in proximity operations for small satellites in orbit and includes several SpaceX alumni, is weighing an office in Britain — it already has one in Italy — but is conducting a beauty contest among several European governments before deciding.

Maurizio Vanotti, Tyvak’s chief commercial officer, said one the one hand that Tyvak is “not afraid of Brexit at all. In fact, we want to use Brexit as an opportunity.”

He did not explain how Brexit might be an advantage in the space business. And when asked how Britain could make itself more attractive to companies like Tyvak, he said: “For someone who hasn’t set up in the U.K. and is considering whether to move or not, [a key factor] is to remove the uncertainty of the political direction.”

The British government’s own statistics about its dynamic private space sector would appear to argue for continued involvement in EU programs.

U.K. Minister Mark Garnier, parliamentary under-secretary at the Department for International Trade, told the conference that the government wants to do whatever it can to promote space as a high-growth sector of the economy.

“Over the last five years we have been listening to industry to make the industrial environment even more competitive,” Garnier said. “We are still listening and preparing change as we recognize that UK space will need more action.”

He did not mention Britain’s future role in EU programs.

Asked whether it was necessary that the British government signal its EU program intentions in 2017 and not wait until the Brexit situation has clarified, Smart said:

“Oh yes. There are procurements under way now for the longer-term operations and support of the Galileo system. It’s important that those procurements are done in a way that meets the combined objectives of Europe.”

 

Peter B. de Selding