Galileo needs two billion euros extra

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Europe's biggest space programme, Galileo, needs a further €1.9 billion euros to make the satellite navigation system operational, the European Commission said yesterday (18 January).

The project, most recently billed at €3.4 billion across 2007-2013, has been slowed by disputes over funding that only ended when the 27-nation European Union agreed to invest public money when commercial backers withdrew in 2007.

The system of 18 or more satellites aims to be operational by 2014, rivalling the dominant US Global Positioning System network and plans by China and Russia to launch their own systems.

About €1.2 billion of contracts were awarded last year to companies including Italy's Finmeccanica, Thales of France and OHB Technology of Germany. But not everything has gone according to plan.

"3.4 billion euros is not enough to complete the infrastructure resulting from the Galileo programme, owing to the increased cost of the development phase, the increased price of launchers, the lack of competition for the award of some packages," the Commission said in its mid-term review of the project.

"An additional financial injection of some 1.9 billion euros will be needed to complete the infrastructure of the Galileo programme."

Europe's industry commissioner, Antonio Tajani of Italy, said he was committed to bringing the project to fruition, to allow the EU to compete in a market for satellite services estimated at €240 billion in 2020.

"Galileo will allow Europe to compete in the global space technology market and to impose itself as one of the leading players in a growing sector, characterised by increased internationalisation and the entry of emerging economies," he said.

Cost over-runs have become a regular feature of the project, which foundered in 2007 when political squabbles led to the withdrawal of a group of companies charged with building it.

They included EADS, France's Thales and Alcatel-Lucent, UK-based Inmarsat, Italy's Finmeccanica, Spain's AENA and Hispasat and a German group that included Deutsche Telekom.

Galileo was only rescued when EU budget ministers agreed to pour in €2.4 billion of unused public funds, mostly earmarked for farm subsidies.

Galileo 'a stupid idea'

In a parallel development, Norwegian newspaper Aftenposten last week published a US diplomatic cable released by WikiLeaks, which quoted the chief executive of OHB-System AG describing Galileo to the US Embassy in Berlin as "a stupid idea that primarily serves French interests".

The German company last year won a €566 million contract to build the first 14 satellites for Galileo.

On Monday (17 January) the company said in a statement that it had suspended its chief executive following the WikiLeaks incident.

(EURACTIV with Reuters.)

The Galileo satellite navigation system is Europe's civilian alternative to the US Global Positioning System (GPS) and Russia's GLONASS system, which are both funded and controlled by military authorities. 

The European Commission presented its initial plans in 1999, but a final agreement with EU member states was not struck until almost ten years later, in November 2007, after protracted discussions over the project's funding.

A Court of Auditors' report into the management of the Galileo programme, published in June 2009, found the EU executive's leadership and management skills wanting. The report also blamed individual countries for defending their commercial interests throughout the programme.

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