Galileo stalls

20 March 2008

The future of Europe's Galileo Satellite navigation system, similar to the US GPS network, is in doubt following the collapse of negotiations between the European Commission and the final private consortium interested in the project. The Commission originally short-listed three consortia for the Public-Private Partnership (PPP) concession to launch and operate the system. However, one dropped out in 2004, and the remaining two merged to form a single group.

A new report from the Commission says talks with this group, the Toulouse-based Euro-GNSS consortium, owned by eight private-sector companies, have collapsed following disagreements on the allocation of risk. In a statement the Commission said, “The negotiation has failed to achieve reasonable results and (the Commission) has come to the conclusion that the current concession negotiation stands little chance of being concluded satisfactorily.”

The report concludes that if the Galileo project is to be salvaged, public funds, rather than a PPP, will have to be used. The Commission suggests two options – either an initial constellation of 18 satellites be launched with public money, with launch of the remaining 12 and the operation of the system being run as a PPP concession. The other option, which the Commission favours, is to buy all 30 satellites with public money, with just the operation of the system coming under the scope of a PPP.

The cost of these options will be between € 9 and € 12 billion. It is not clear how much the initial Galileo budget will be exceeded by, but the Commission does state that € 2,5 billion of public funds have been used over the last 10 years to get this far in the process.

Full operation of the system will not begin until the end of 2012 at the earliest, five years later than the original 2008 deadline. In fact, the Commission says urgent action is needed to meet this deadline. The European Council of Transport Ministers is due to meet this month to discuss the Commission's proposals.

About Galileo

Galileo will be a satellite-based radio navigation system similar to the US GPS and Russian GLONASS networks. However, whereas the US and Russian systems are under military control, Galileo will be a civilian system. On the other hand, while GPS and GLONASS transmit ‘free' signals, users will be charged to use the Galileo positioning data.

Galileo is expected to be used in parallel to the existing GPS and GLONASS systems, with the increased number of signals available providing more accurate positioning data. Applications in the construction industry include surveying, machine control, vehicle tracking and building monitoring.

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