Galileo project hit by funding setback
Uncertainty surrounded the future of the Galileo satellite navigation programme following EU Ministers' reluctance to commit to funding for the scheme at a meeting of the Transport Council in Brussels on 7 December. At the Council, six Member State Ministers said they want another three months to decide whether to provide the 450 million euro needed as start-up funding for the project, intended as Europe's answer to the military and civilian satellite navigation systems of Russia and America, Glonass and GPS. The overall cost of the project could top 3 billion euro, with the European Commission and the European space agency (ESA) providing the first 1.25 billion euro. If it goes ahead, the project aims to put 30 satellites into orbit 23,000 km above the Earth by 2007. Transport and Energy Commissioner Loyola de Palacio said that 'without a rapid agreement on its development, the Galileo project will go up in smoke.' She had asked the 15 EU Member States to reach a clear decision by the end of the year. Ms de Palacio emphasised the potential benefits of the scheme, which she said would give a return of 17.8 billion euros for just 3.9 billion euro of investment. Although most EU States are in principle in favour of Galileo, which would provide greater political independence for the EU along with tangible benefits for transport, industry and communications, the huge financial commitments required for the scheme (220 million euro a year to run) are proving a disincentive for some countries. Some Member States are concerned by the lack of a guarantee over private sector funding for the initiative. In a European Parliament resolution on Galileo adopted in October this year, the Parliament expressed concerns over the project's financial viability. MEPs called for more clarity and security concerning private sector funding, to guarantee that any funding shortfalls would not be borne by Member States. Despite an independent study led by PriceWaterhouseCoopers, which concluded that the project is financially justified and will generate considerable economic benefits, some EU Ministers are still questioning the cost-benefit ratio of the scheme. Commissioner de Palacio said the issue may now be addressed at the forthcoming EU summit at Laeken, Belgium, on 14 and 15 December. The project needs unanimous approval to proceed.