Minister of Defense François Bausch informed the budget commission in March that Luxembourg's military satellite will cost double the initial quote. The expensive acquisition had received the green light in 2018.
The budget commission was tasked to compile a detailed report about the use and users of the satellite, ground stations, and timeframes to name a few key points.
PwC Luxembourg has also already compiled a report that raises several questions. Radio 100,7 addressed some of the findings of the report earlier this Monday. The report, which was requested by the Minister of Defense, for instance found that several stages of the normal procedure were skipped.
According to Pirate Party MP Sven Clement, the Italian firm OHB-I may have been favoured because it counts a Luxembourgish company among its suppliers. Clement told RTL that he suspects that the company adapted its budget calculations to please and to meet the expectations of the commission. OHB-I eventually quoted a budget of €170 million. This amount was a significant underestimation as the initial quote has since been doubled.
Clement did not blame Minister of Defense François Bausch for the mishap. He explained that the minister had immediately raised the problem with the Chamber of Deputies. Clement instead argued that former Minister of the Economy Etienne Schneider should be brought in for another hearing as the project had been launched under his authority.
According to Clement, it had been clear from the start that the estimated €170 million would not suffice to cover the actual costs of the project. OHB-I had quoted €168 million solely for the construction of the satellite and ground stations before the offer was signed. Referring to the PwC report, Clement explained that the operating costs of the satellite are massive as "highly-qualified staff are required." Officials initially believed that the army could operate the satellite, which was unrealistic, Clement said. Personnel costs amount to €5 million per year. Antennas will also be erected in Belgium, which means that Luxembourg will have to pay additional rental charges.
Clement also explained that officials had declined quotes from other companies because they had estimated the actual costs to be much higher. In hindsight, Clement argued, these other quotes would have been cheaper than the one that was eventually accepted.
The budget commission will come together again towards the end of the month. This meeting is hoped to shed light on the financial concept that PwC are currently working on and the question of how the initial €170 million have already been used.
Clement concluded that the rationality of the project should be questioned. Opponents believe that a satellite costing more than €300 million would be an immoderate acquisition given the fact that Luxembourg is still battling the repercussions of the coronavirus crisis.
