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Delayed Galileo will struggle to compete, warns operator
Sat-nav set to blow the budget…

By Reuters

Published: Tuesday 15 January 2008

Europe's Galileo satellite navigation system will struggle to compete with rival US, Russian and possibly Chinese systems unless it is delivered on time, satellite operator Eutelsat has warned.

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China and Russia are developing their own satellite positioning systems and the US is deploying a second-generation global positioning system (GPS) on which billions of dollars of navigation products and services depend.

Eutelsat chairman and chief executive Giuliano Berretta said: "We cannot afford any further delays in the implementation of Galileo."

Berretta said Eutelsat was in talks with Brussels and the European Space Agency to help make sure the programme would be implemented on time in 2013 and within budget. Discussions have been taking place for at least six months, he said.

The European Commission meanwhile defended its €3.4bn cost forecast for the programme following a report the budget is bound to be seriously overrun.

German weekly Der Spiegel quoted a confidential Berlin government report as forecasting that Galileo will cost at least €1.5bn more than the EU executive believes.

The Commission's transport spokesman said: "The estimates we have are really based on solid ground."

Eutelsat is offering to help oversee the design, construction and testing of the planned 26-strong fleet of satellites, which would come into service several years after initial targets due to political and financial spats.

Berretta said: "We can guarantee better than anybody else the construction, budget and schedule... We want this programme to work, so we would like to play a role in it."

A consortium of private companies pulled out of the Galileo project last year due to disagreements over funding.

It included EADS, France's Thales and Alcatel-Lucent, Spain's Hispasat and AENA, Italy's Finmeccanica, Deutsche Telekom and the UK's Inmarsat.

When the companies pulled out, the EU Commission proposed using EU funds, mostly budgeted for farm subsidies, to help plug the €2.4bn shortfall created.

The proposal was approved in November, making the EU, rather than private companies, full owners of Galileo.

Berretta said: "Galileo is of public interest, so it should be funded by public money."

Berretta said Galileo could be better exploited if it was used in conjunction with other satellite systems.

For example, Galileo could team up with one of Eutelsat's satellites, expected to be launched in the first quarter of 2009, to offer car-related mobile, interactive services such as on road traffic, security and highway toll payments.

He said: "Galileo must work with other communication satellites to exploit its capacity."