Global Economics

Power Struggle Threatens Galileo


A power struggle among the involved companies from various EU nations will delay the satellite navigation project

Political wrangling between governments and companies in the EU is jeopardising the bloc's biggest ever joint technological project - the Galileo satellite navigation system - which is already facing several delays.

An internal power struggle has led to the negotiations in the private consortium - consisting of eight European firms who will implement and run the Galileo system - being suspended because they cannot agree a common commercial position.

EU transport commissioner Jacques Barrot said on Wednesday (14 March) he was writing to the companies building the Galileo system to discover the reason for more than a year's delay. "They are just not working," his spokesman Michele Cercone said, according to the Financial Times.

The consortium includes European aerospace company EADS, France's Thales and Alcatel-Lucent, the UK's Inmarsat, Italy's Finmeccanica, AENA and Hispasat of Spain, and a German group led by Deutsche Telekom.

The companies are reportedly holding out for more work to be guaranteed by the consortium.

Officials from the EU and the European Space Agency have since June 2005 been negotiating with this group to put in place the details of a 20-year concession.

"The Spanish firms are the current block," says one source close to the consortium's negotiations, according to NewScientist.com.

"They are making outrageous demands over guaranteed work share arrangements. But Spain has already secured a completely unnecessary control centre and people aren't having any more," the source said.

However, there have also been complaints of political meddling, with EU member states still pushing for their interests to be taken into account.

Arguments continue over where control centres should be sited and where industrial contracts should be placed.

SEVERE DELAYS

Galileo was meant to end reliance on the US Global Positioning System (GPS) by 2010. The US version is a free network but it is military-run meaning that it can be switched off at the whim of the Pentagon. The date has now been postponed to 2011 at the earliest.

Galileo's 30 satellites are to be launched into mid-Earth orbits at a cost of around €3.2 billion, with one third of that coming from EU taxpayers, and the rest coming from the consortium hoping to regain its investment by selling location-based technology and services.

The consortium was meant to have formed a single Galileo operating company by the end of 2006 as well as appointed an independent chief executive.

The delays mean that orders cannot be placed for Galileo's 30 needed satellites.

"This is posing major problems. As time schedules slip, costs go up," says Paul Verhoef - the commission's Galileo program manager, according to NewScientist.com.

Continued delays could also have an expensive knock-on effect. Last week the European Space Agency, was forced to order Giove-A2, a €30 million Galileo signal testing satellite.

It had not planned for the satellite but ordered it to be placed in orbit to maintain rights to Galileo's frequency allocations expected to run out mid-2008.

It has fallen to the German government - which currently holds the agenda-setting EU presidency - to try to break the impasse. The country's transport minister, Wolfgang Tiefensee, is set to chair a number of critical meetings, with one of them being a gathering of EU transport ministers in Brussels next week.

"The consortium must fulfil the conditions and obligations it agreed to in 2005," a spokesman for Tiefensee's office told NewScientist.com. "We expect substantial progress by June."

"We will give the companies an ultimatum," a French diplomat said, according to the Financial Times.

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