EU in u-turn on Galileo satellite funding

16.05.07 @ 17:28

  1. By Lucia Kubosova

BRUSSELS - Brussels has announced a u-turn on the funding of Europe's Galileo satellite navigation system, asking for full public coverage of the expenses after the chosen private investors failed to agree on financing the €4 billion, hugely-delayed project.

  • Brussels' three scenarios: cash from the EU's budget, national budgets or no Galileo (Photo: wikipedia)

Pressed by some EU member states and members of the European Parliament to come up with an alternative solution, the European Commission adopted a report on Wednesday (16 May) which suggests that the EU should abandon the private-public scheme previously agreed for Galileo.

Instead, member states should decide whether to co-finance the project individually or allo the common EU budget to be used to pay the bill, with transport commissioner Jacques Barrot favouring the latter.

"It's €400 million per year which equals about 400km of motorway," he said.

"Or could we just give up Galileo?" the French commissioner asked rhetorically as he presented the third possible scenario on what to do next. He instantly rejected going down that route, arguing that the EU should do what is needed to ensure the satellite system becomes operational in 2012, as formerly projected.

"Our industry must be at the front of this technological revolution and therefore we must ensure there are no further delays," he said, adding "We're determined to assume the full responsibility for this major project."

The commission's move comes after eight companies, in a consortium set up almost two years ago and charged with building and running Galileo, failed to meet Brussels' deadline to agree on a business plan.

Private firms to run the system

The consortium - made up of major aerospace and telecom players EADS, Thales, Inmarsat, Alcatel-Lucent, Finmeccanica, AENA, Hispasat and TeleOp - will be offered a possibility to run the system, but only after the public sector has guaranteed the building of it.

Mr Barrot said private investors are "afraid to take risk at this early stage" of the project but maintained that businesses are already "impatient" to be able to use its services once it starts running.

The Galileo system is aimed at breaking Europe's dependence on the US military-owned but free GPS system and was originally programmed to launch its 30 satellites by 2008.

The satellites will beam radio signals to receivers on the ground, helping users pinpoint their locations which could be used for various purposes, such as mobile phones or guiding applications in transport.

It is expected that the whole project could create 150,000 jobs in the EU.

The bloc's transport ministers are set to give their reply to the commission's Galileo salvage plan at their meeting in Brussels on 7 June.

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