The European Union has sharply increased the projected cost
of its Galileo satellite navigation system by E1.9bn to E6.5bn,
highlighting unforeseen budget overruns.
In a mid-term review of the project, the EU blamed the
difficulty of obtaining fixed…
The European Union has sharply increased the projected cost
of its Galileo satellite navigation system by E1.9bn to E6.5bn,
highlighting unforeseen budget overruns.
In a mid-term review of the project, the EU blamed the
difficulty of obtaining fixed prices from industrial partners, many
of them small manufacturers, and the “specific nature of oneoff
systems”.
Galileo is now expected to launch initial services in 2014, six
years later than originally planned. Full services are expected in
2019/2020.
Europe had initially intended this cost to be shared with
industry, which remained unconvinced about its potential for
profitability. This was largely because US government-funded
counterpart GPS is able to be used for free by businesses
across the world.
Years of delays and soaring costs have seen it become
a bugbear for Europe, and its previous estimated cost was
E4.6bn in 2008, up from an initial E2.5bn.
In a statement accompanying the mid-term report, Antonio
Tajani, EU Commissioner for Industry and Entrepreneurship,
said: “Galileo will allow Europe to compete in the global
space technology market and to impose itself as one of the
leading players in a growing sector characterised by increased
internationalisation and the entry of emerging economies.
“We are satisfied with the progress made so far and
committed to bringing this project to fruition.”
Tajani was unavailable for comment at the time of going to
press, but his spokeswoman reaffirmed Galileo’s importance to
the European economy as a “service enabler”.
The EU expects the satellite navigation applications market,
which is currently worth 6-7% of developed countries’ GDP, will
be worth E240bn worldwide by 2020, the spokeswoman said.
“Galileo will be complementary to global satellite navigation
systems being developed by the US, Russia, India, China and
Japan,” she said, adding that “the use of more satellites will
benefit navigation purposes”.
As well as the obvious military benefits for Europe having an
independent system, it will also improve coverage in northern
Europe, where GPS is not strong.
