PPP in the space sectorE. Saggese

President of the Italian Space Agency

Forum “Cooperazione per la modernizzazione e l’innovazione”

Verona – 27, 28 Ottobre 2011

Summary Premises PPP models PPP experiences in the European satcom projects PPP experiences in ASI Perspectives for the cooperation with Russia

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A precursor: Telespazio Perhaps the first historical example of public-private partnership in

the modern telecommunication field In Argentina,the news about the armistice at the end of the first world

war reached our italian emigrants with delay, causing lot of disappointment

On the wave of that disappointment, in 1921 Giovanni Carosio, with a public subscription of the italian immigrants in Argentina, founded the Compagnia Italiana dei Cavi Telefonici Sottomarini

In 1961 the private Italcable decided to enter the satellite business even before the launch of the first telecomm satellite; to obtain the concession Italcable reached an agreement with the public RAI

The two enablers for the first time together: the ownership of the infrastructure and the permission to use it as a public resource

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Premises - 1

• Long duration of the relationship between public and private partners

• Amplification of project funding capabilities

• Risk distribution between partners• Cooperation terms defined in the

contract• Responsibilities, costs and risks

defined in the contract• Pubic interest and commercial goals

served – better results for same cost• Each party retains its own identity and

responsibility

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Premises - 2

Trends: Increasingly used in infrastructure sectors Governments require alternative forms of infrastructure

service provision due to issues involving public funding, operational efficiency and risk

Some sectors abroad now mainly driven by PPP models (road, utilities…)

Complex contract models requiring significant coordination efforts

Some contractual models (e.g. BOOT – Build, Own, Operate and Transfer) have gained more interest than others and thus became standard models

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1. Involved sectors

Current and pre-tender projects Europe by Capital value

Premises - 3

2. Involved countries

PPP models - 1• PPPs span a spectrum of

models that progressively engage the expertise or capital of the private sector:

• At one end, there is a straight contracting out as an alternative to traditionally delivered public services, based on direct execution or labour

• At the other end, there are arrangements that are publicly administered but within a framework that allows for private finance, design, building, operation, maintenance and temporary ownership

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PPP models - 2• Design – Build (DB)• Operate and Maintain Contract

(O&M)• Design – Build – Finance –

Operate (DBFO)• Build – Own – Operate (BOO)• Build – Operate – Transfer (BOT)• Build – Own – Operate – Transfer

(BOOT)• Buy – Build – Operate (BBO)• Joint – Venture Operate (JVO)• Concessioning

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PPP experiences in the European satcom projects - 1

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Alphasat (UK)

BO Model (BOO modified)

Hylas (UK)

BOO Model

Satcom commercial market

Military market

Satcom BW (Germany)

Service Contract

Skynet 5 (UK)

PFI

PPP experiences in the European projects - 2

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Other satellite projects

Galileo(EU)

Satnav

Concessione

Radarsat 2 (CAN)

EO

Design-Build-Operate

TerraSAR (GER)

EO

Alliance

Italsat• The first PPP ASI program : it included two

Ka telecomm sats, launched in ‘91 and ‘96• The business model was a PPP precursor,

implemented by both ASI and Telecom Italia• ASI was responsible for space & ground

control segment development, F1 manufacturing and launch, and F2 manufacturing

• Telecom Italia was responsible of F2 launch and ground traffic segment development

• Operations and services marketing were under Telespazio / Telecom Italia responsibiity

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PPP experiences in ASI- 1

e-geos

• A company between ASI (20%) and Telespazio (80%), a leading international player in the geo-spatial business

• Offers a whole range of products and services in the Earth Observation and in the geo-spatial application domains, based on both optical and radar satellites

• Exclusive distribution of the ASI Cosmo-SkyMed SAR satellite constellation data on the commercial market

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PPP experiences in ASI- 2

SIGMA• New telco program, for networking and

broadcasting services, in Ka and Ku band, for institutional customers

• Overcoming the digital divide: symmetrical and asymmetrical connectivity for those areas poorly (or not at all) served by the fiber network. 100% coverage for the public administration services

• Disaster recovery in case of major outages of the fiber network

• Redundancy for mission critical and life critical services

• Theater telcos for peace keeping and peace enforcement missions

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PPP experiences in ASI- 3

ASITEL

• Vehicle PPP company recently incorporated to implement the SIGMA program

• Currently 100% owned by ASI. The private partners will join shortly

• The company will be responsible for infrastructure investments (SIGMA), and will maintain the ownership of the assets

• The company mission will be mainly to grant first class telco services to institutional and governmental entities

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PPP experiences in ASI- 4

Perspectives for Italian Russian cooperation

The PPP approach, demonstrating its effectiveness in the Italian and European space sector, can well be exploited for a Russian – Italian cooperation in the fields of telecom, Earth Observation and satellite navigation

ASI already started a number of discussions with its Russian counterparts, in the field of satellite projects, fostering a PPP approach (e.g. the Arctica system, oriented towards Arctic observation and mobile airplanes satcom on polar routes)

ASI, based on its mission in Italy, can channelize the italian industry and investors towards PPPs with Russian public and private space sector, and viceversa

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