BERLIN–The European Commission is abandoning plans to build a satellite navigation system in partnership with private industry after the consortium chosen for the project became mired in disputes about financing, jobs and management structure, officials said on Wednesday.
The commission, which is expected to announce its decision on Thursday, is most likely to propose instead that the $9.5 billion project, known as Galileo, be wholly financed by the public sector.
Galileo was meant to challenge the global positioning system–the system that provides directions to drivers–and eventually to be a central component of European military and security arrangements. It has already cost the European Union $1.62 billion, even though none of the crucial deadlines for managing the project have been met.
Jacques Barrot, the European Union’s transportation commissioner, had given the eight-company private consortium leading the project until Thursday to resolve their differences after warning in March that Galileo was in jeopardy. Michele Cercone, a spokesman for Barrot, said Wednesday that there was no chance the deadline would be met.
Galileo, envisioned as a system of pinpointing locations with unprecedented accuracy using 30 satellites, was scheduled to be operating by early 2011.
But the consortium–Alcatel-Lucent and Thales of France, the French-German European Aeronautic Defense and Space Company, Finmeccanica of Italy, Aena and Hispasat of Spain, Inmarsat of Britain and TeleOp of Germany–has spent almost 18 months squabbling over appointing a chief executive, choosing a headquarters and establishing a management structure.
Barrot intends to present several options this month, before a meeting of European transportation ministers in June, but scrapping Galileo entirely is not very likely to be one of them.
“Giving up on Galileo is out of the question after so much money has already been spent,” said Giovanni Gasparini, a space expert at the Istituto Affari Internazionali, a research center in Rome.
The commission could eliminate the consortium and put out a new offer for bids on the work, basically starting over again. But Gasparini said that alternative would be time-consuming and would give competing systems a long lead.
Russia is speeding ahead with its Glonass system. China, which in 2003 offered to invest more than 200 million euros in Galileo, is developing the Beidou satellite network. The United States’ global positioning system is expected to be upgraded by 2013.
Another option is to retain the present consortium and, instead of treating it as a partner, authorize the members to make and operate Galileo with public financing.
Kevin O’Brien contributed reporting from Berlin.
