Galileo in contractor show-down

By Teresa Küchler

Date: 23/06/05

Tension is rising over the choice of a contractor to run Europe's satellite navigation system Galileo after Germany's threats to block the project if its industry did not get a fair share of the contract.

While waiting for a winner to be announced next Monday (27 June), rival consortia Eurely and iNavsat announced that they were ready to share the contract.

The Galileo Joint Undertaking (GJU), created by the European Space Agency and the European Commission to manage the development phase of the project, was supposed to choose a winner in March but the consortia were given another three months to improve their offers, or come up with a joint proposal before 20 June.

Galileo is Europe's biggest infrastructure programme, expected to create 100,000 jobs.

Eurely and iNavsat each have roughly 40 suppliers waiting for orders on satellite components, totalling some €1.4bn.

GJU spokesperson Peter Marchlewski announced on 17 June that the two rivals had agreed to join forces and hand in a common proposal. But he underlined that there were still two bids on the table and that neither party should prejudge a decision.

Berlin is opposing joining efforts, claiming that competition is necessary to get the best price and offer opportunities to suppliers of parts. German Transport Minister Manfred Stolpe said that without an agreement on sharing work between national industries, the Galileo project as a whole was threatened.

"Since Germany is the biggest financial contributor in the development of a satellite navigation system, its industry should be adequately represented," he said.

Germany is represented in only one of the two consortia, the iNavsat, via European Aeronautic Defence and Space Company (EADS) whereas France is represented in both consortia via EADS, Thales navigations and telecom company Alcatel. Stolpe claims this favours French industry.