Galileo price rises 1.9bn euros

Antonio Tajani: "Mistake" not to finish Galileo

Europe will have to spend a further 1.9bn euros (£1.6bn) to complete its Galileo satellite-navigation system.

The European Commission says the money will be needed beyond 2014 to raise the number of spacecraft in orbit to 30.

The EC released its assessment a day after a top executive from a Galileo contractor was dismissed for allegedly calling the project a "stupid idea".

EC Vice-President Antonio Tajani said the 3.4bn euros already committed to Galileo was money well spent.

"We do intend to move ahead because we believe in this project," he told reporters in Brussels. "It is necessary to reach 30 satellites; I think it would be a mistake not to go ahead and launch the other satellites."

Contracts have already been issued to build and launch 18 spacecraft which should give Galileo an initial operating capability from 2014 onwards. To be able to offer all the services envisaged for the system will require 12 more satellites, however.

Galileo will work alongside the American Global Positioning System (GPS).

It is expected to improve substantially the availability and accuracy of timing and navigation signals delivered from space.

Users of its open service should get quicker, more reliable fixes and be able to locate their positions to within one metre compared with the current GPS-only error of several metres.

Galileo should have been operational by now but the project has run into myriad technical, commercial and political obstacles, including early objections from the US, who thought a rival system to GPS might be used to attack its armed forces.

And the venture came very close to being abandoned in 2007 when the public-private partnership put in place to build and run the project collapsed.

To keep Galileo alive, EU member-states had to agree to fund the entire project from the public purse. What should have cost European taxpayers no more than 1.8bn euros is now set to cost them in excess of 5bn euros.

The latest assessment of the extra costs follows a review of the project by the EC's technical partner, the European Space Agency.

It shows that an estimated 1.9bn euros will be necessary in the next multiyear EU budget period, 2014-2020.

It also assesses the annual running costs to be about 800m euros for both Galileo and its precursor system known as Egnos.

On Monday, the chief executive of one of Germany's leading space companies lost his job because of comments he was reported to have made in a conversation with US diplomats in 2009.

OHB-System's Berry Smutny was quoted in a diplomatic cable exposed by Wikileaks as calling Galileo a "stupid idea that primarily serves French interests", and a waste of taxpayers' money.

Although Mr Smutny denied the cable's contents, OHB's board decided to remove him from his post to prevent any further damage to the company's reputation and the Galileo project.

OHB-System is part of the German-UK consortium that is constructing 14 of the first 18 Galileo spacecraft.

Asked about the affair, Mr Tajani said he was satisfied that OHB-System was "committed wholeheartedly" to the project.

OHB-System is part of the German-UK consortium constructing 14 Galileo satellites

"I met [Berry Smutny]; he came to me in Brussels before the Wikileaks affair," explained the Commissioner for Industry and Entrepreneurship. "He was very much involved in this area. After this affair, he sent in a letter that said he believed in Galileo. Wikileaks isn't the Gospel."

The EC's continued support for the project despite all its problems down the years is based on the belief that huge returns to the European economy will accrue from the investment.

Already, GPS is said to have spawned global markets that are worth several tens of billions of euros annually.

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