EU ministers balk at spiralling Galileo costs

The future of Galileo, Europe’s rival to the US GPS satellite tracking system, will come under question from EU transport ministers on Thursday.

Meeting in Luxembourg, ministers are expected to stress that national capitals will not write a blank cheque for Galileo amid concerns that costs are spiralling out of control.

The project – which will be used to monitor natural disasters and help air and sea rescues as well as for tracking road traffic – was projected to cost €1bn, but costs are currently at €1.5bn and rising.

A spokesman for EU transport commissioner Jacques Barrot said that the extra costs had been entailed by recent test launches and issues surrounding security.

According to FT Europe, ministers will continue to express their support for the project, but will warn that EU tax payers should not be expected to foot the bill if costs continue to grow.

Several member states, led by Germany, want the private companies involved in the project to assume any additional costs, arguing that they are the ones that have incurred them.

The European commission has set out nine areas of risk where the costs will be borne either by the EU budget or by the companies.

Of these, the commercial revenues and the cost of the design of the Galileo project are thought to be the most controversial, the paper writes.

The management of the system of 30 satellites will be taken over on January 1 by a new supervisory authority based in Brussels, although the satellites will not begin orbiting until 2008.

The Galileo project will begin commercial operations in 2010, and will be run by the private sector companies involved until 2030.

Transport ministers will also discuss the controversial issue of Siberian overflight payments at the meeting in Luxembourg.

The Russian authorities currently charge EU airlines an “environmental tax” to offset what they claim is the damage caused by plane emissions.

But many EU operators believe the tax is simply lining the pockets of Russian officials, and want Brussels to take a tougher line with Moscow on the issue.

The commission has made resolution of the issue a prerequisite for its support for Russia’s bid to join the WTO, but there was little evidence of a compromise at the last round of talks in September.

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