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Taxpayers To Save Galileo

  • May 11th, 2007
  • Posted by 7thmin

galileo-logo2.jpgTaxpayers in Europe will be asked to dig deeper to get the Galileo satellite navigation system off the ground.

The European Commissi0on has confirmed (10.4.07) it will have to give up the plan to construct and put into operation the entire project, valued at EU 7-billion (A$11.35-billion; dcerates.com, 10.5.07), in conjunction with a consortium of private interests.

Consultations with its eight partners in the venture, representing most of the European space industry, have staggered since the announcement of advanced plans for Galileo last December (see EUAustralia, “Galileo Partners Making Plans, Watching Risks”, 9.12.07).

A spokesperson for the European Commission, Michele Cercone, confirmed at Brussels that another funding structure would be tried, saying the partnership had.
identified “unacceptable risks”.

Public funding would be brought in to pay for the construction of the system, with its thirty satellites operating in three circular orbits.

Private operators would then contribute exploitation fees; though they would also be expected to pay up-front guarantees.

Mr Cercone applied some spin to the new proposal, suggesting it would deliver lower costs overall and “value for money:”

In this scenario, the public sector’s direct payment of construction costs would produce better economies than providing a 100% loan guarantee to private investors – a long-standing aspect of the consortium agreement.

He said the arrangement would get the project “back on track”, with the starting date still at the original mark, 2011 or early 2012.

The coming months would see the production of a new public discussion paper as a basis for taking the project forward.

Pressed for figures the spokesperson said that so far some EU 1.2-1.4-billion (A$ 1.467 – 2.271-billion) in public funds had been committed in current spending; the new scenario would demand a new commitment of EU 2-3-billion (A$3.24 – 4.86-billion).

The Galileo project is for the construction of a civilian rival to the United States Ground Positioning System (GPS), overseen by US military authorities. Its design is for more accurate and efficient positioning, navigational and timing services, for a world market expected to grow to EU 60-billion (A$97.33-billion). The EU consortium has national user agreements signed or in preparation with China, Israel, the Ukraine, South Korea, India, Morocco, Norway and Argentina. Discussions have been held with Australia, Brazil, Canada, Switzerland and Saudi Arabia.

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