EPOS financial plan status 2013 EPOS IAPC Rome, 19 th of September 2013

Objectives To present the revised cost assessment of the different EPOS components To provide scenarios for a funding model To discuss the options and identify the most suitable one To receive feedback from the IAPC to submit IAPC recommendations to the BGR

Presentation 1.Timeline 2.Challenges for the Financial Plan 3.Cost assessment 4.Scenarios 5.Funding model 6.Discussion

Timeline and goals Preparatory Phase Phase 1: Implementation Phase 2: Construction & Operation Finalize the ICS design Present ICS prototype Identify existing TCS Start implementing TCS Hosting the ECO Procedures for hosting ICS Finalize EPOS financial plan Secure National funds for existing TCS Post- Prep phase? Finalise ERIC negociations Construction ICS central hub TCS implementation Existing TCS operational ERIC enters in force ECO operational ERIC-TCS Agreements Operate EPOS-ERIC Support TCS implementation EPOS fully operational Further TCS developed Third parties partnership agreements Interaction with private sector Elaborate EPOS financial plan Phase 2 EPOS-ERICEPOS financial plan

Post-Preparatory Phase An interim phase is needed before construction Objective: make the bridge between the end of EPOS PP and the start of Phase 1/beginning of EPOS-ERIC (ie. Negotiations with the EC) Not very costly. We are likely to need some dedicated national project and/or we might ask for a one year extension of the PP

Financial plan in 2 phases? Short term (Phase 1): It is not possible to immediately legally integrate existing TCS into EPOS-ERIC. New TCS are not sufficiently defined to start construction immediately. Different financial scenarios to be presented Long term (from Phase 2 onwards): legal integration of TCS into EPOS- ERIC when possible, also in the financial plan If the IAPC agrees with this two-step approach, this has important implications for legal, governance and financial issues: The legal and governance must be able to accommodate constraints from Phase 1 and Phase 2 The financial plan is developed for Phase 1, with a review process at the end of Phase 1

Phase 1: challenges to address GENERAL EU funding is not guaranteed Members will join the EPOS ERIC progressively – allow for non-ERIC member financial participation (must be taken into account in governance structure) Some TCS services will be shared also with non EU and EU associate countries CONCERNING ICS Provide costs for distributed ICS Revise the ICS cost assessment for the central hub CONCERNING TCS Existing TCS cost assesment to be provided (ongoing; October 2013) TCS to define or being planned: provide approximate costs Maintaining existing services Project funding for (new) services such as I3 necessary

Cost assessment: Phase 1 First 5 years of EPOS-ERIC (based on average personnel costs) – ECO: € – ICS Central Hub: € & Distributed Nodes: being assessed EPOS Delivery Framework (outside EPOS-ERIC) – Existing TCS: being assessed – TCS under implementation: being assessed – Envisioned TCS (to be assessed later, when technically defined) First 5 years of ECO+ICS central hub: 11.5M€ over 5 years (2.6% of 420M) National RIs: 84M€ /year (=420 M€ over 5 years)

*) SISMOS comment: SISMOS currently employs 16 technicians with a total of 176 man- month/year (this makes the bulk of the FTEs) **) EFEHR comment: current FTEs include more 'integration' than foreseen for stable operation - will reduce to 2.5 FTE + 16 kEUR resources "operation&maintenance" at the end of NERA WG1 TCS - Seismological Observatories & RIs WG1 existing services operational resources 2013 host country contribution 2013 membership fees 2013 EU project contributions for current operation Waveform Data ORFEUS + ODC5 FTE kEUR70% (~600kEUR)110 kEUR200 kEUR EIDA (/ODC)1.75 FTE + 50kEUR100%0 ESM SISMOS*18 FTE + 90 kEUR100% (950kEUR)0 Earthquake Products EMSC6.5 FTE kEUR50% (~ 550 kEUR)45 kEUR500 kEUR AHEAD0.9 FTE + 25 kEUR100% (60kEUR)00 Hazard & Risk EFEHR**)4.5 FTE + 16 kEUR85% (500kEUR)015 % (100 kEUR) Sum 37 FTE kEUR(2600 EUR)155 kEUR800 kEUR ONGOING

WG4 TCS - GNSS AND OTHER GEODETIC DATA (services under development) WG4 services Implemen- tation status Current FTEInfra- Structure Resources Current CostFuture Cost GNSS DisseminationPartially 25%230 kEUR110 kEUR440 kEUR GNSS Data PreservationPartially 20%130 kEUR70 kEUR350 kEUR GNSS Data MonitoringPartially 50%110 kEUR20 kEUR50 kEUR GNSS Data AnalysisNot yet 0% Support & GovernanceNot yet 0% Sum 470 kEUR200 kEUR840kEU ONGOING

Scenarios for EPOS-ERIC budget Phase 1 De-coupledModerately Integrated Highly Integrated Technical integration Full Legal integration EPOS-ERIC covers ECO&ICS EPOS-ERIC covers ECO, ICS and most TCS Financial integration Funding for ECO and ICS only (but funding of TCS must be raised separately ) Membership fee funds ECO, ICS and parts of TCS through a flexible fund Funding ECO and ICS & the majority of costs associated to TCS

EPOS Funding model EPOS-ERIC funding will be distributed over: Membership fees : total of cash and in-kind cash equivalent – Recommendation IAPC June 2013: mixed model based on flat rate and GDP weighting. – Discussion: definition of the level of flat rate and GDP Host Premium – No threshold is settled, it will depend on the proposals EU and other project funding Membership fees: Cash : – Define the minimum amount of cash necessary In kind cash equivalent – Discussion: list of accepted In-Kind-Contributions and how to set their value

Funding Scenarios EPOS-ERIC budget TCS ECO ICS National RIs National funding to EPOS ERIC EU funding Nat’l funding according to nat’l priorities EU funding Others Towards less integration (decoupled scenario) Towards more integration (Highly integrated scenario)

Phase 1 funding sources: De-coupled scenario EPOS-ERIC budget TCS ECOICS Host Premium (mixed) EPOS coordination projects ( e.g I3, structural funds, …) Membership fees (cash) Services subscription fee Other EU projects (e.g. structural funds, InterReg…) National projects and support In kind contributions New funding Potential project funding Existing funding National funding at nat’l level National funding to EPOS EU funding

Phase 1 funding sources: Moderately integrated scenario EPOS-ERIC budget TCS ECOICS Host Premium (mixed) EPOS coordination projects ( e.g I3, structural funds, …) Membership fees (cash) Services subscription fee Other EU projects (e.g. structural funds, InterReg…) National projects and support NB. Flexible fund for TCS, Moderately integrated scenario New funding Potential project funding Existing funding In kind contributions National funding at nat’l level National funding to EPOS EU funding

Phase 1 funding sources: Highly Integrated scenario EPOS-ERIC budget TCS ECOICS Host Premium (mixed) EPOS coordination projects ( e.g I3, structural funds, …) Membership fees (cash) Services subscription fee Other EU projects National projects Evaluation? In kind contributions New funding Potential project funding Existing funding National funding at nat’l level National funding to EPOS EU funding

Moderately Integrated financial scenario SUFFICIENT FUNDING Support for development, adaptation and operation of existing TCS Support for construction of well defined, new TCS Seed for definition of TCS still in definition phase FLEXIBLE FUNDING Efficiency of spending Adapt to evolving landscape Adapt to distributed system POSSIBLE SOLUTION: BUILD TCS FLEXIBLE FUND Growth over 4 years, stability in year 5 where the new financial plan is developed Annual calls for developing TCS

Scenarios for EPOS-ERIC budget Phase 1: legal, governance and financial implications De-coupledModerately Integrated Highly Integrated Legal implications EPOS-ERIC manages ECO and ICS EPOS-ERIC manages ECO, ICS, coordinates TCS, and manages contracts for services and call for tenders EPOS-ERIC manages ECO, ICS and TCS. For TCS inside EPOS- ERIC: the personnel is EPOS-ERIC employed or seconded Governance implications Governance mechanism for coordinating TCS? Coordination of TCS in the governance model Representation of TCS in the governance model Financial implications No money involved in the partnership agreements between EPOS-ERIC and TCS In-Kind contributions restricted to ECO and ICS In-kind contributions possible for TCS

Scenarios for EPOS-ERIC budget Phase 1: pros & cons De-coupledModerately Integrated Highly Integrated Pros Small-size EPOS-ERIC financial plan Incentive for implementing TCS Better integration of all EPOS partners More geographically distributed EPOS activities (through TCS funding) Higher integration level Strong relationship with non EPOS-ERIC countries Cons Difficulties in engaging the communities in EPOS Limitations to implement TCS Higher EPOS-ERIC budget Even higher (and presently unknown) EPOS-ERIC budget New resources in EPOS-ERIC 2.7%3.6%10-12%?

Concluding remarks EPOS needs a very flexible financial plan over the first 5 years (Phase 1) If the funding is not sufficient, we will build administrative complexity with no real service to scientists The financial choices carry implication for the legal and governance models

IAPC indications on finances in Potsdam The EPOS PP IAPC provides to the EPOS BGR the following indications: 1.The EPOS PP IAPC agrees to leave the Host Premium not specified 2.The EPOS PP IAPC agrees that EPOS-ERIC needs cash contribution (to be determined) 3.The EPOS PP IAPC recommends the EPOS Project Development Board to provide a list of possible types of in-kind contributions for ICS and TCS envisioned at this stage of the Preparatory Phase and to transmit them to the BGR for discussion. 4.The EPOS PP IAPC agrees to exclude the flat rate per country and to provide to BGR two examples relying on models for membership fees: GDP-based and mixed

Vote Does the IAPC approve to have separate financial plans for Phase 1 and Phase 2? Does the IAPC approve the presentation of the three funding scenarios by the PDB to the BGR? Does the IAPC wish to recommend one scenario to the BGR? In case the Moderately Integrated scenario is recommended: Does the IAPC recommends to use a flexible EPOS fund mechanism for TCS development?

Discussing In-kind contributions Does the IAPC recommends to the BGR to discuss the following two issues? Discussion: Accepted kinds of in-kind contributions? Discussion: How to set value on in-kind contributions?

Thank you for your attention!

Accepted types of In-Kind Contributions? In-kind categoriesUnit of measureComments BuildingCubic meter Applicable only to hosting countries; easily cashable PersonnelFull-time equivalent Represent 70% of total costs; secondment legal issues; very dependent on national salaries ICS / TCS nodeNumber and size Secure the construction and maintenance of ICS / TCS; difficult to compare; necessity to list main nodes and secondary ones Facility for HPC Indicator to be identified Costly to rent; applicable only to ICS hosting countries Processing & visualization facilities, Modelling and computational resources Indicator to be identified Secure the integration tools; difficult to compare Other facilities Indicator(s) to be identified Secure data management and instruments; difficult to compare

Options to include in-kind contributions Pros & Cons of linking IKC and Membership Fees OptionProsCons Link the in-kind contribution to the calculation of the membership fee Cash/in-kind trade- off fosters the in kind contribution due to cash savings Cash equivalent difficult to calculate Do not link the in- kind contribution to the calculation of the membership fee Funding model easy to elaborate Restrain in-kind contributions

How to set value on In-Kind Contributions? To agree on flat rates per item of in-kind contribution provided – How to accommodate the specificities of each in- kind contribution in a fair system? – Provenance taken into account (i.e. for personnel)?  Insert it into the model by granting a discount to the membership fee

EPOS ERIC Cost distribution for each scenario Cost spread over time Moderately Integrated Scenario Cost spread over time De-coupled Scenario Cost spread over time Highly Integrated Scenario ? ? ? ? ? ? = being assessed