EU Finishes Satellite Procurement With Orders to Thales, Astrium

The European Union awarded contracts valued at a total of 355 million euros ($511 million) to Thales Alenia Space and Astrium, completing procurement for a flagship satellite project meant to rival the U.S. GPS system.

The European Commission gave a 281 million-euro order to France’s Thales Alenia Space for the formatting of navigation information for broadcast by the satellites that will make up the Galileo road, rail, ship and air-traffic control network. The commission gave a 73.5 million-euro contract to the U.K.’s Astrium for maintenance of the satellites in orbit.

The contracts are the final two of six for the procurement of Galileo’s operational capability starting in 2014. Last year, the EU awarded a German-Italian joint venture that includes Finmeccanica SpA (FNC) a 194 million-euro order for the operations of Galileo’s space and ground infrastructure and three other contracts worth a total of about 1 billion euros for engineering support, launchers and satellites.

“We are now well and truly on the road to putting in place the infrastructure,” EU Industry Commissioner Antonio Tajani said in a statement today in Brussels. The European Space Agency signed the two final contracts on behalf of the commission, the EU’s executive arm, at the Paris Air Show today.

Galileo, one of Europe’s biggest industrial projects since Airbus in the 1970s, was on the verge of collapse in 2007 after companies led by European Aeronautic, Defence & Space Co. and Alcatel-Lucent SA balked at a plan to share the costs, citing the risks tied to launching and operating the system. That prompted a public bailout.

In January, the commission raised its projection for the cost of Galileo by 1.9 billion euros to 6.4 billion euros, citing the “high” risks that led industry to abandon its funding pledge and the EU to arrange the bailout.

To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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