Friday, December 10, 2004

On the home straight?

In a burst of triumphalism, the Commission has just announced that Galileo – its rival version of the GPS system is "on the home straight".

Following the Transport Council meeting, held last night and continuing into today, the commission is crowing that the system "will definitely become operational in 2008: a decisive stage has just been completed which will allow the Galileo programme to be fully completed, despite the obstacles along the way."

The council today confirmed the technical characteristics of the system, in particular with regard to the services being offered and has "decided in favour of moving on to the launching (2006-2008) and operational phases of the project" It has also confirmed that the EU (i.e. the taxpayers of the EU member states) will contribute to the funding of those two phases.

All of this has prompted M. Jacques "Wheel" Barrot, rejoicing in his humble post of transport commissioner, to chortle: "Galileo is without a doubt the most wonderful European technological project. We are now on the home straight: next year will see the launch of the first satellites".

Barely able to restrain his enthusiasm, he adds: "Galileo will be as much of a technological revolution as mobile telephony. This venture shows how capable Europe is of making a united effort in pursuit of a common goal."

This, of course, flies in the face of the recent House of Commons Select Committee Report which cast doubts on the economic viability of the project, cautioning the government that it should not "let itself be bullied into jumping." That just goes to show how influential our Parliament is when it comes to EU matters.

Amid rumours that transport secretary Alistair Darling was going to attempt to block the deal, it also perhaps suggest that, once again, the UK has caved in on a point of principle.

We are now informed by the commission that the programme will continue through its four phases: the first was the definition of the project, which was developed between 2002 and 2005, with a total cost of € 1.1 billion.

It now enters its deployment phase, from 2006 to 2008, at a cost of € 2.1 billion (of which one third will be from the public and two-thirds from the private sector). This will be follwed by the operation and exploitation phases.

Exploitation costs are estimated at €220 million a year with an exceptional contribution of the public sector for the first few years of €500 million. Thereafter, the commission claims, these costs will be entirely covered by the private sector.

Amid all this triumphalism, however, the commission is strangely quite about that could be a significant set-back, with reports of India about to withdraw from the project, taking with it €300 million of funding. All it has to say on this matter is that "the Commission is continuing to negotiate co-operation agreements with third countries."

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