Galileo in Crisis as EU Mulls Takeover

Eight companies are deadlocked over the way forward for the European satellite navigation project. The EU may take control or simply call for more public funds

More public EU funds are needed to put the bloc's multibillion euro satellite navigation system, Galileo, back on track, with the European Commission expected to take control of the sinking ship.

"Galileo is going through a deep and grave crisis," German transport minister Wolfgang Tiefensee said while speaking on behalf of the EU, according to AFP. His country holds the EU presidency until the end of June.

"We're in a dead end street," Mr Tiefensee said, explaining that the eight companies in a consortium set up almost two years ago charged with building and running Galileo, have still not been able to agree on the way forward.

The eight European companies - AENA, Alcatel, EADS, Finmeccanica, Hispasat, Inmarsat, TeleOp and Thales - received in March a 10 May deadline to reach a deal, but both the commission and the German presidency doubt this deadline will be honoured.

"We need to find an alternative solution," Mr Tiefensee said, according to AP.

The European Commission and the German EU presidency are set to propose to EU transport ministers meeting in June that the public sector takes a bigger role in building the Galileo satellite navigation system as talks with the consortium look set to fail.

An EU takeover of Galileo is one of three options - and the one with the strongest backing - that transport commissioner Jacques Barrot will present on 16 May, according to media reports.

Other options on the table include partially financing Galileo, which is a public-private partnership, with public money or abandoning the project all together.

Turning Galileo public, however, could cost the 27-member union a little less than €2 billion on top of the €1.5 billion the commission already allocated in the 2007-2013 budget period.

Galileo is aimed at breaking Europe's dependence on the US military-owned but free GPS system and was originally programmed to launch its 30 satellites by 2008.

However, that date was pushed back to 2011 due to previous disagreements between EU governments on how to pay for the system and Mr Tiefensee pushed the likely launch date back by another year.