EU says more funds needed for Galileo project

Europe's multibillion satellite navigation system is in deep crisis, and more public funds than originally planned will be needed to put the project back on track, the EU, quoted by an Associated Press report said.

The Associated Press report said a consortium of eight companies from France, Germany, Spain, Britain and Italy charged with building and running Galileo has been given until May 10 to set up a joint legal entity to run the system or risk losing control of the project, scheduled to be operational in orbit by 2011.

But German Transport Minister Wolfgang Tiefensee, speaking on behalf of the EU, was quoted as saying that he had 'little hope left' that the consortium will end the infighting over how to split the workload and get down to work by a Thursday deadline. Spain has reportedly been insisting on a larger number of contracts.

'Galileo is in a profound and serious crisis. We're in a dead end street,' Tiefensee, quoted by the Associated Press report, said. 'The cardinal problem is that the companies still have not been able to agree on the way forward. We need to find an alternative solution.'

The European Commission is to present a proposal on May 16 on how to overhaul the project, Europe's rival to the US global positioning system, or GPS, the report said.

A spokesman for the EU executive said the system would not get into orbit as planned in its present form, the report said.

Tiefensee said Germany, which holds the rotating six-month EU presidency, wants extra public money for the project, the report added.

Only one out of 30 planned satellites that are part of Galileo has been launched, in December 2005, the report said.

Under the original plan, European taxpayers were supposed to cover roughly one third of the 3.6 billion ($4.9 billion) project, which is to create some 150,000 jobs, it added.

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