Galileo Funding Solution Remains Elusive

European government and industry officials have begun to doubt whether a political consensus exists in Europe to complete the Galileo satellite navigation system.

In public and private comments here Sept. 11, officials said the main government backers — Britain, France, Germany, Italy and Spain — appear far apart on how best to finance the 30-satellite constellation and the remaining portion of the associated ground network.

Decisions at the European Union's executive commission and among EU governments in the coming weeks will determine whether any kind of Galileo network — with or without the special features that had set it apart from GPS — will be built.

Attending a meeting here organized by the French IFRI foreign-affairs institute, officials noted that Galileo's expected in-service date has been pushed back by one year every year since the program was approved in 2001.

Originally foreseen as operational in 2008, Galileo will not be completed until 2013 at the earliest, officials said — and only then if decisions on its financing are made in the coming months.

Carlo des Dorides, head of the concession department at the European GNSS Supervisory Authority — a government body that oversees Galileo development — said Galileo construction and deployment is a 53-month program, whenever it begins. "If the green light is not given until next year, then further delays are unavoidable," des Dorides said.

The program's backers have been regrouping since June, when the European Commission decided to scrap the original idea of having substantial private-sector participation in Galileo's financing.

That means European governments must provide the estimated 2.4 billion euros ($3.3 billion) to complete the system on their own. Finding this money quickly in ways that will not infringe on European Commission regulations will not be easy and carries the risk of aggravating the differences in approach between the nations taking the biggest role in the program.

The European Commission is scheduled to issue recommendations on Galileo financing Sept. 19. European transport ministers then will review the proposals Oct. 2, with European heads of state to be asked for their view in mid December. Officials said mid-2008 is the earliest feasible date for full approval of the new financing.

As an illustration of how far the program has to go, one of the lead European Commission officials responsible for Galileo put the state of the debate this way: "Does Europe want or need its own satellite navigation system? Would we build the system even if we had to finance it publicly? Let's focus on the strategic questions," said Matthias Ruete, the European Commission's director general for energy and transport. European transport ministries are taking lead responsibility for financing Galileo.

Ruete admitted that having to ask questions like this in late 2007 is surprising given the years of debate — and investment — that have gone into Galileo. The European Union and the European Space Agency already have spent some 1.5 billion euros on the program.

If Galileo — the first major infrastructure program decided by the European Union — is abandoned, it will not be the first European space project to be shunted aside after $1 billion had been spent. In the mid-1990s, the European Space Agency shelved a planned astronaut-carrying space plane after its member governments, led by France, had spent a similar amount.

Ruete said the biggest current threat to Galileo is the inability of certain European governments to set aside their usual struggles on behalf of their national industries on behalf of the project's general welfare. Still worse, he said, is the fact that individual European governments have multiple opinions.

"We have 27 member states," Ruete said. "For each member state, we have five or six different authorities, all driving in different directions."

Expressing hope that Galileo still might be saved, government and industry officials here sought to marshal arguments in favor of the project that they hope will resonate with government authorities.

For Ruete, Galileo should be seen not as a money-making project so much as one that gives Europe independence in navigation, positioning and timing technologies that are ever-more important to modern societies.

"Do we want to make more and more critical applications dependent on a system over which we have no control?" he asked, referring to the U.S. GPS satellite navigation and timing system, which by itself has created a global industry with annual revenue of several billion dollars.

Gard Ueland, president of Kongsberg Seatex of Norway, a manufacturer of navigation gear and a member of Galileo Services, an association of companies backing Galileo, said U.S. companies have advantages in the use of GPS that non-U.S. companies do not have.

But Ueland also conceded that the advantages of U.S. companies were mainly seen when GPS was first introduced more than a decade ago.

David Iron, an expert on public-private partnerships at LogicaCMG of Britain, said Galileo is worth the investment even if the European Commission estimates of the jobs it will create — 150,000 — are unreliable.

"If you take one-fifth that number — 30,000 jobs — you still generate some 600 million euros in economic activity and that covers the cost of the system," Iron said. "Galileo is justified on the tax-return basis alone."

Mark Dumville, a director at Nottingham Scientific Ltd. of Britain, a developer of navigation software, said the only argument for Galileo that stands full scrutiny is based on strategic independence for Europe, and the quasi-military signal, called PRS, that Galileo is intended to carry.

Dumville said that most other pro-Galileo arguments evaporate given the fact that both China and Russia are building global navigation systems that, when used in combination with GPS, will improve accuracy and signal reliability for users worldwide — just as would the combination of GPS with Galileo.

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