Analysis and Definition of the Satellite System Operations Project Team Hermes – ESA CSC: Connectivity & Secure Communications

Objectives

The study interfaces with the Iris Phase B Design study (ANTARES) and has the following objectives:

Ensuring the suitability of the ANTARES design for operations.
Producing a PPP proposal for Phase 2.2 of the Iris Programme to support the deployment of the subset of the satellite system infrastructure required for validation activities between mid 2014 and end 2015.
Determining the prerequisites for a PPP for operational service from 2020 onwards (including probably the deployment phase of 2016 to 2020) by analysing the business issues within the technical, operational, regulatory, and institutional environment.
Determining a certification/validation/verification/regulatory roadmap between now and start of service in 2020, and then determining the split of these between the Iris programme (up to Phase 2.2) and post Iris Phase 2.2. The roadmap will be used to determine the scope of the Iris programme Phase 2.2 including its infrastructure and test means (the Iris subset).

In particular the study is an enabler to maximise the probability of a PPP being negotiated on acceptable terms to both ESA (and other European institutional entities) and the private party whilst satisfying other stakeholder needs (particularly airlines, and ANSPs).

Challenges

Key issues to be dealt with in this study include:

The study deals with a large infrastructure project planned for operation in the 2020 timeframe hence the requirements and institutional framework are fluid. In order to address this the Hermes study team will apply its extensive knowledge of the way the ATM industry works to identify at an early stage the key constraining parameters in the overall system design.
The expressed requirements may be over-constraining and may drive costs in the business case to an unsustainable level. In response the consortium will conduct a detailed review of the requirements and identify at an early stage those that may prove to be most constraining, and suggest trade-offs for evaluation.
The role of satcom in future ATM requires consideration by a number of external entities, and is likely to evolve over time. The Hermes study team will examine a broad range of financial scenario parameters, by building risk into all cost elements before assessing the total cost for each of the entities in the value chain.

Plan

Features Continued:

Within WP4 an Overall Risk Analysis assesses the risks in the programme to identify mitigations, insurance costs and inputs to the sensitivity analysis. Insurance costs have been estimated using input from Inmarsat’s space segment insurance broker. A Sensitivity Analysis looks at the robustness of the business case to changes in assumptions relating to costs, delays, revenues, financial parameters.

WP5 Strategic
The Strategic WP5 sets out the pre-requisites and conditions under which the “consortia” would invest in both the sub-set and the final system. Three options for PPP have been defined. These will be further refined and down selected to the preferred option on the basis of the risk assessment and sensitivity analysis. The options being used are:

Option 1: Private Venture: Build/Own/Operate – commercial loans,
Option 2: PPP: Build/Lease/Operate – combination of funding; Public sector maintains equity stake/able to take on risk,
Option 3: Concession: Private sector operates Publicly owned infrastructure.

Project Plan

The various tasks ultimately contribute to determining the top level objective of defining the PPP Prerequisites.

The Roles and Responsibilities is a key input to defining the Service Model. The Timeline and the Service Model then allow the Revenue Model to be determined.

The required Iris subset is the infrastructure and means needed (as delivered by the Iris programme) to validate the service so that the service provider can be certified and the overall in service date of 2020 can be achieved. Consequently the Iris subset is a trade-off between cost (particularly the phasing of funding from various sources) and risk. The programme Timeline and the Certification, Validation and Verification needs for infrastructure/means are the key inputs to determining the required Iris Subset.

The Operations tasks feedback comments on the ANTARES system design study, as well as determine Operational Costs and Capital Costs. Operation needs may determine more (or less) infrastructure which will impact Capital Costs.

The Business Case is fundamentally based on the Costs (Capital and Operational including phasing) and the Revenues. The Risk Analysis will identify those items that can adversely (positive or negative) impact the Business Case and the Sensitivity Analysis will then determine their potential impact on the Business Case. The Prerequisites for Private Investment will identify (based mainly on Business Case, Sensitivity and Risk Analysis) key issues that need to be resolved before an Operator Agreement could be signed.

The project is developed in two phases, whereby there is a first pass of the majority of WPs in Phase 1; these are then updated in Phase 2, once the system baseline has been selected during ANTARES System Requirements Review. The strategic analysis that “brings it all together” is done in Phase 2 only.