Power battle over Galileo risks loss of 100,000 jobs

Date: 22/03/01

By Laurence Frost

MORE than 100,000 potential jobs are at stake in the debate over the future of the EU's Galileo satellite navigation project, according to European Commission President Romano Prodi.

In a speech to MEPs last week, he identified Galileo as one of 10 priority Stockholm summit issues.

"The Kosovo war showed only too clearly Europe's total dependence on the American GPS satellite navigation system," Prodi said. "If this is switched off for military reasons, European businesses are forced to suspend many of their operations".

"The Galileo project offers an alternative that would make Europe self-sufficient in satellite navigation systems for all purposes - civilian, military and scientific. It is an opportunity we simply cannot afford to miss."

The President said fresh impetus was needed from European leaders to find "a modest injection of public funds to trigger massive private investment" that could generate more than 100,000 jobs.

However, that is not the whole story. The countdown to the programme's €3.5-billion blast off could have begun last December if the Commission had accepted financial controls in a draft text prepared on behalf of transport ministers.

The text called for "effective political control" by EU member states and set a €1.1-billion spending limit for the initial phase of the project, subject to ministerial review within its first year.

Instead, the Commission submitted its own document, removing references to political control and spending limits.

A raft of telecoms and aerospace industry giants are gearing up to begin the pitched battle for infrastructure contracts, as a compromise deal looks more likely to end the stand-off. Among them French, Spanish and Italian industries are well represented by consortia such as Telespazio and Galileo Servicios - both set up to bid for the lucrative tenders.

But none has so far agreed to join the envisaged 'public-private partnership' to secure funding for the initial €3.5 billion infrastructure build. Dutch finance minister Gerrit Zalm was speaking for several other EU countries when he voiced fears that the system might turn out to be a white elephant - questioning its commercial potential in competition against its free-access rival, GPS.

But the European Space Agency (ESA), which is managing technical aspects of the project, stresses the vast range of possibilities opened up by Galileo's superior accuracy.

The ESA estimates the European market for satellite navigation equipment and services between 2005 and 2025 at €250 billion, of which paid-for services account for €112 billion. Even the basic signal, provided free of charge, would allow a user's position to be calculated to within a few metres. Paid-for applications foreseen include 'precision farming' - minimising the use of pesticides and other agri-chemicals - as well as improvements in the effectiveness of offshore exploration.

Aircraft landings will also be safer and easier, and extra communications channels will spawn a range of intelligent in-car navigation systems planning routes according to updated weather and traffic information. They will also enable Galileo hardware to transmit emergency calls that include the user's precise global position.

The Commission is still committed to seeking public-private partnerships to fund the system's development. But with doubts hanging over the project's commercial viability, governments may soon have to start placing orders on behalf of their own agencies - including emergency services and military applications - if Galileo's fleet of at least 21 satellites are ever to find their orbits.

More than 100,000 potential jobs are at stake in the debate over the future of the EU's Galileo satellite navigation project, according to European Commission President Romano Prodi.