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EU: Galileo project in deep 'crisis'

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BRUSSELS, Belgium (AP) -- Europe's $4.9 billion satellite navigation system is in deep crisis and will require more public funds to get back on track, the European Union said.

The Galileo project -- Europe's rival to the U.S. Global Positioning System, or GPS -- has already seen major delays because the eight companies in the consortium are arguing over how to divide the workload.

The consortium of companies from France, Germany, Spain, Britain and Italy has been given until Thursday to set up a joint legal entity to run the project or risk losing control of it. But German Transport Minister Wolfgang Tiefensee, speaking on behalf of the EU, said he had "little hope left" the consortium will end the infighting in time.

"Galileo is in a profound and serious crisis. We're in a dead-end street," Tiefensee 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 system, which Tiefensee said Monday would not likely be operational in orbit until 2012 -- a year later than had been expected. Tiefensee said Germany, which holds the rotating six-month EU presidency, also wants more public funding for the project.

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

"We will hope to find another form of financing, of distributing the cost (within) a public-private partnership," Tiefensee said, adding it has not been decided whether the consortium will be able to hold on to some of the contracts.

Only one out of 30 planned satellites in the system has been launched -- in December 2005. The second satellite missed its autumn 2006 launch date after it short-circuited during final testing.

Galileo was originally to have started launching its 30 satellites -- compared to GPS's 24 -- by 2008. However, that date was postponed to 2011 due to previous disagreements between EU governments on how to pay for the system. Now, Tiefensee says it won't likely be operational until 2012.

Like GPS, Galileo is envisioned to be a network of satellites orbiting Earth that will beam radio signals to receiving devices on the ground, helping users pinpoint their locations.

Copyright 2007 The Associated Press. All rights reserved.This material may not be published, broadcast, rewritten, or redistributed.

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