Barrot pleads for 20-year budget to rescue Galileo

Transport Commissioner Jacques Barrot is to ask the European Parliament and the Council of Ministers to approve a 20-year funding plan for Europe’s troubled Galileo project when discussions on the 2014-21 EU budget begin in 2009. He said the move was essential to get the stalled satellite navigation project, a rival to the US Global Positioning System (GPS), back on course.

On the eve of a meeting with EU transport ministers, Barrot told European Voice: "On a budgetary level, we have to convince Parliament that we cannot embark on this adventure if we don’t have financial back-up beyond 2013. Parliament and the Council must give us this financial flexibility. The private sector, which will itself have taken out loans for satellite launches, will have to be remunerated."

The Galileo project has been beset with financial uncertainty, with the private sector slow to commit itself to the project. Recently, it emerged that the project might be launched a year later than planned, in 2011.

Stephan Kahl, an analyst with German information communications technology industry federation Bitkom, said: "Companies producing navigation systems using Galileo think it won’t be established before 2014."

Barrot’s spokesman, Michele Cercone, said that the nature of the Galileo project, with its long-term development plans, required thinking beyond the scope of the EU budgetary system.

The EU’s medium-term spending plans, the financial perspectives, are planned in seven-year phases. Barrot’s bid to go beyond a seven-year programme would require political agreement at the highest level of national governments. There have been precedents for projects being carried over from one framework to another, as was the case with farming expenditure plans pre-dating the present 2007-13 budget. But to launch a new 20-year plan in the context of financial perspective negotiations would not be standard procedure.

Barrot hit out at "selfish" member states holding back progress on Galileo, warning that the project could fall hostage to national interests, like troubled aircraft-maker Airbus in its "worst moments". "I hear that some member states have started to ask for their money back," he said. It would be an important step towards recovery, according to Barrot, for member states to confirm that they would participate in the community project.

Spain is allegedly at odds with Germany and Italy over an as-yet unsigned 20-year concession contract negotiated between the eight companies involved in the satellite navigation project. Two of the firms, Hispasat and Aena, are Spanish. The Spanish government wants to be guaranteed more jobs through the construction of a third control centre located in Spain, to be added to those currently under construction in Germany and Italy.

Barrot is also demanding that the private sector approves the Galileo concession contract, which sets out terms on project funding and management, by autumn this year. He signalled that companies should forge ahead, "avoiding interminable negotiations on the distribution of risks".

A deadline of 10 May has been set for the establishment of an umbrella company made up of the eight companies, AENA, Alcatel-Lucent, EADS, Finmeccanica, Hispasat, Inmarsat, TeleOp and Thales.

Barrot warned that if steps were not taken, the project could nose-dive. "The US’ future [version of] GPS would take the place of Galileo," he said.

"In any case, profitability would be limited. The applications on which many expectations have been pinned would be delayed.

"But I can’t believe that scenario because it would represent a great European defeat. Industrial instincts will kick in very quickly. And, member states have their pride."

Transport Commissioner Jacques Barrot is to ask the European Parliament and the Council of Ministers to approve a 20-year funding plan for Europe’s troubled Galileo project when discussions on the 2014-21 EU budget begin in 2009. He said the move was essential to get the stalled satellite navigation project, a rival to the US Global Positioning System (GPS), back on course.