European GPS Alternative

EU officials said Friday that Transport Commissioner Jacques Barrot will present on May 16 a list of alternatives for the struggling project, which is meant to compete with the US Global Positioning Satellite (GPS) navigation system.

The possibilities are expected to range from totally taking over Galileo, a system of some 30 satellites which could be operational as late as 2013, partially financing the project or abandoning it altogether, officials have said.

An industry representative said one option seriously being considered would be for the EU to finance the first 18 satellites.

One official said that completely taking it over would cost a little less than 2 billion euros ($2.7 billion) on top of the 1.5 billion euros the European Commission already allocated in the 2007-2013 budget period.

Little progress made so far

Almost two years after being named, a private French, German, Spanish, British and Italian consortium of industry giants has made little progress on the project, angering the commission.

The concession contract for Galileo remains unsigned as the firms squabble over who will do what and EU transport ministers have set them a May 10 deadline to work out their differences.

But a letter of new demands which the consortium sent to the commission last week virtually assures that Wednesday's deadline is unlikely to be met.

"They have come up with new conditions, they want more time, more money and more public guarantees," one official close to the project said. "If we give them more time, it could delay our satellite orders."

In June, EU transport ministers are to re-examine the Galileo project, which is aimed at breaking Europe's dependence on the free GPS system used aboard many cars, boats and aircraft.