EU to proceed with public bailout of troubled Galileo
Galileo was supposed to showcase European technological prowess and public-private sector cooperation, but instead found itself hobbled by missed deadlines, bickering among technology giants, and bureaucratic infighting; the EC is rethinking its approach to the project
The U.S. military operates the global positioning system (GPS) — which is free for users all over the world. China is building its Beidou. Russia is improving its Glonass system. And Europe? Europe is debating its Galileo system. The troubled satellite navigation network was supposed to demonstrate Europe’s technological prowess but now needs a public bailout if it is to get off the ground.
Delays, engineering problems, and and cost over-runs have forced EU transport ministers, who met in Luxemburg late last week, to consider the delicate issue of where the new taxpayer money will come from. Space Daily reports that the project, rather than being an example of European technological cooperation, has now become an embarrassment amid bickering in the private consortium building it and member states trying to use the project to advance their own industrial interests.
The ministers agreed that to be operational by 2012, the Galielo project — which they described as the “key project for the European Union” —
would “need additional public funding.” The ministers committed to work out the financing details by their next meeting, scheduled for 1-2 October.
The Galileo project consists of thirty satellites. Under the original plan, public money was supposed to pay for the first four satellites and then the private consortium companies building the satellites were to pay for two-thirds of the twenty-six remaining satellites. The consortium member companies — Alcatel-Lucent and Thales of France, the Franco-German aerospace giant EADS, Finmeccanica of Italy, AENA and Hispasat of Spain, the U.K. Inmarsat, and TeleOp, a German consortium led by Deutsche Telekom — were to cover their investment costs by then operating the satellites and collecting the fees once they were in operation.
Things have not worked out according to plan, however. Deadlines were missed, and companies bickered over their relative share of the project, and the EC was moved to recommend last month that that the entire project be financed with public money. The private companies welcomed the idea, as they were increasingly worried that future user fees would not cover their investment. Funding the project entirely with public money, however, would mean that the EU will have to come up with an additional $3.2 billion dollars during the 2007-13 period, on top of the $1 billion already earmarked for Galileo.
Which brings us back to last Friday’s meeting of the 27 EU transport ministers. They agreed on two things: First, to press ahead with the Galileo project in order to provide Europe “indepnendence” from the United States; second, they unanimously agreed to end talks with a private consortium contracted to develop the Galileo system and instead raise the additional $3.2 billion themselves instead.
There were divisions, however, on how to raise the funds. Stephen Ladyman, the U.K. transport minister, said the United Kingdom would ground the project unless a business case for it could be made and that, it went ahead, other European Union projects should be scrapped to pay for it. Ladyman said: “I don’t see a strategic case for it. One of the questions we have never asked is how to make a return from this system.”
France and Germany vociferously argued that Europe needed to retain high-technology expertise and gain an independent space capability. Dominque Bussereau, French transport minister, called the Galileo project “strategic and indispensable”. The “British brake” could be overcome, he said.
Ministers asked the European Commission to draw up a detailed funding proposal and suggest possible sources of money by October. Officials now admit that an earlier decision to allow the merger of two private sector consortia contracted to build the system had failed. The unwieldy alliance included: EADS, the Franco-German aerospace giant; Thales and Alcatel-Lucent of France; the UK’s Inmarsat; Finmeccanica of Italy; Spain’s AENA and Hispasat; and TeleOp, a German consortium led by Deutsche Telekom. The private companies could not agree on a division of labour or on whether they would see a return on their investment.
