De Palacio set for climb-down over Galileo incentive

Date: 07/02/02

By Laurence Frost

THE European Commission is preparing a climb-down over the controversial public-private partnership intended to launch the Galileo satellite navigation project.

EU officials say that Loyola de Palacio, the transport commissioner, is ready to drop promises of 'preferential treatment' for companies that invest in the €3.6 billion system.

'It seems the Commission is willing to withdraw that element from the proposal,' said one EU diplomat.

He added that the Union executive might go even further by allowing a new clause outlawing 'conflicts of interest'.

According to the original text, one of the tasks of the 'joint undertaking' would have been to 'ensure that private undertakings which have participated...enjoy preferential treatment' during the later 'deployment and operation of the navigation system' from 2008.

De Palacio's spokesman, Gilles Gantelet, said there were already adequate safeguards in the plan, but added that the Commission could 'try to find new wording to strengthen the provisions on conflicts of interest'.

The concession could remove one of the last remaining obstacles in the way of the programme's overdue development phase.

More basic concerns are due to be addressed today (7 February), when diplomats attend a presentation by accountants PriceWaterhouseCoopers, whose study last November concluded that the programme was financially viable and forecast €18 billion in benefits for the EU economy.

EU presidency-holder Spain is focusing on German misgivings. 'If Germany says yes, the others will follow,' said a Spanish official.

Spain wants transport ministers meeting in March to release €450 million in development funding, which remained blocked at last December's session after the UK and the Netherlands lodged formal objections to the plan. Along with Germany, Austria, Portugal and Finland, the two countries feared that companies 'buying' seats on the board for their €20 million investments could influence contract tenders they were themselves bidding for.

MEPs are voting today (7 February) on a non-binding report by German Socialist Norbert Glante calling for private companies to be excluded from direct participation in the joint undertaking.

The European Commission is preparing a climb-down over the controversial public-private partnership intended to launch the Galileo satellite navigation project.