By Martin Banks - 18th October 2010
We are in favour of Galileo but not at any price
Giles Chichester
The cost of developing and running the Galileo satellite navigation system for 20 years has spiralled to 22.2bn euros, according to a new report.
Due to political infighting and “unrealistic expectations” the cost to European taxpayers of developing and running the project has rocketed from £2.2bn under the original estimates, says a European commission report leaked to the Financial Times Deutschland.
Galileo is intended to offer superior accuracy of positioning within one metre compared to up to 10 metres for GPS.
The European version would have global coverage and an encrypted, pay service for commercial clients, with extra information such as weather detail.
All EU member states share in the cost of the Galileo via the EU budget.
Galileo has been criticised consistently over the last few years, not least in the UK where a House of Commons report in 2009 branded it “a textbook example for how not to run an infrastructure project”.
A recent German government report admitted that “All in all, it is assumed, based on the currently available estimates, that the operating costs will exceed direct revenues, even in the long-term.”
The project was due to be finished by 2008 and chiefly financed by the private sector but private investors pulled out, citing a lack of commercial prospects for the project.
Consequently, Galileo became completely taxpayer-funded and is now not expected to be up and running until 2017.
Responding to the new report, ecr MEP Giles Chichester said, "This figure is astonishing. We are in favour of Galileo but not at any price."
Gerard Batten, a UK Independence Party MEP, said, "Gallileo is Europe's great vanity project, the one that states 'The EU is as important as the United States’, except it isn't. It's bust, and Britain's taxpayers mustn't be forced to shell out billions for Europe's monstrous ego".
Mats Persson, Director of the Open Europe think tank, said, “If it’s ever completed, the Galileo programme could bring benefits, but it’s absolutely extraordinary how poorly managed this project has been up to now.
"Political meddling, infighting and contradictory interests have led to delays and huge increases in costs at virtually every stage of its history. It’s also not clear whether there’s enough of a demand in the sat-nav market for this kind of product or who’s willing to pay for it.”
“The UK government needs to avoid spending good money after bad and block any further attempts at channelling more money towards Galileo, until it's clear that the benefits of the project outweigh the costs in the long-term.”
