Ministers say Galileo costs must be justified
31 March 2011
Transport ministers have told the European Commission that it must justify the extra €1.9bn it needs to complete the Galileo satellite navigation system and ensure that there are no further cost overruns.
At a Council meeting chaired by Hungary's minister of state for infrastructure Pál Völner in Brussels today the ministers reaffirmed their commitment to the project, but said the reasons for the additional costs should be "more thoroughly substantiated". They delayed a decision on whether to approve the new funding until later in the year. The commission was asked to carry out a cost and risk analysis to explore the potential for savings and to take all possible measures to avoid going over budget again.
The cost of Galileo was estimated at around €3.4bn until the Commissioner for Industry Antonio Tajani announced in January that more money would be needed. Despite their concerns about the project's financing, ministers said they believed it was "of strategic importance for the independence of the European Union" and would "contribute to the economic recovery of Europe and address major challenges such as climate change, ecological preservation and sustainable transport".
Völner told a press conference: "Member states believe it is very important that Galileo does not set a bad precedent. They will not accept it if costs increase without control. Efforts should be made to see if costs can be reduced. But we should not permit the current financial situation to cause the entire initiative to fail."
Galileo, a joint venture of the EU and the European Space Agency, has been in development for eight years and the first 18 satellites are expected to be operational in 2014. It is designed to be more accurate than the United States' dominant global positioning system and will be civilian rather than military controlled. It will compete not only with GPS but with systems being developed separately by Russia and China.
Since the public-private partnership set up to fund the project collapsed in 2007, it has been paid for entirely from the public purse. The commission predicts the market for global satellite navigation will reach €240bn by 2020 and that up to 7 per cent of Europe's GDP depends on the technology. It is expected to have mobile phone, road transport, aviation, shipping, agriculture, military and search-and-rescue applications among others. There will be a mix of free-to-air and paid-for services.
At a Council meeting chaired by Hungary's minister of state for infrastructure Pál Völner in Brussels today the ministers reaffirmed their commitment to the project, but said the reasons for the additional costs should be "more thoroughly substantiated". They delayed a decision on whether to approve the new funding until later in the year. The commission was asked to carry out a cost and risk analysis to explore the potential for savings and to take all possible measures to avoid going over budget again.
The cost of Galileo was estimated at around €3.4bn until the Commissioner for Industry Antonio Tajani announced in January that more money would be needed. Despite their concerns about the project's financing, ministers said they believed it was "of strategic importance for the independence of the European Union" and would "contribute to the economic recovery of Europe and address major challenges such as climate change, ecological preservation and sustainable transport".
Völner told a press conference: "Member states believe it is very important that Galileo does not set a bad precedent. They will not accept it if costs increase without control. Efforts should be made to see if costs can be reduced. But we should not permit the current financial situation to cause the entire initiative to fail."
Galileo, a joint venture of the EU and the European Space Agency, has been in development for eight years and the first 18 satellites are expected to be operational in 2014. It is designed to be more accurate than the United States' dominant global positioning system and will be civilian rather than military controlled. It will compete not only with GPS but with systems being developed separately by Russia and China.
Since the public-private partnership set up to fund the project collapsed in 2007, it has been paid for entirely from the public purse. The commission predicts the market for global satellite navigation will reach €240bn by 2020 and that up to 7 per cent of Europe's GDP depends on the technology. It is expected to have mobile phone, road transport, aviation, shipping, agriculture, military and search-and-rescue applications among others. There will be a mix of free-to-air and paid-for services.
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