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Wednesday, May 16, 2007

Barrot vague on Galileo's added value

In a press conference today EU Transport Commissioner Jacques Barrot was asked repeatedly why taxpayers are now being asked to fork out for the new Galileo system when private industry groups have decided it’s not worth the risk.

He replied that the failure of the public-private partnership for the design phase does not undermine the credibility of the project, insisting, “We know there is a big market for it.” He said the industry never said Galileo wouldn’t be profitable, but that they didn’t want to take the risk at this stage: “I don’t understand your question… no-one told us to give up on it.” Asked whose fault the failure of the initial plan for a public-private partnership was, he said, “Well, it’s not really a failure as such. A consortium was chosen, but was not able to answer the questions put to it.” He argued, “I’ve done my job. I’ve taken all the necessary decisions to change the situation… no-one is to blame as such, and certainly not me! I have tried to resolve the problem.”

A British journalist asked repeatedly when exactly civilian operations would be required to use Galileo rather than GPS, but the best Barrot could do was to talk vaguely about Galileo’s “many uses”, including “search and rescue”, and noting that the improved version of GPS will only be up and running much later on. He insisted that “Galileo will be much better than GPS... Galileo’s performance is very important and if it seen to be of high quality, then there’s no reason why people would go for GPS... Galileo will be superior. That is why people will choose it.”

On the funding, he confirmed that the costs at this initial financing stage are €3.4billion, of which we already have €1bn, so €2.4bn more is needed. Add to that the maintenance costs once the system is built - €200m a year over a 20 year period - plus replacement of certain satellites, gives €10bn as a general amount.

However, he argued that there would obviously be revenues generated from applications, and insisted that taxpayers are not actually being asked to stump up more - indeed there are in fact savings for the public sector, because under the previous arrangement, industry would advance the money and then ask that it be repaid each year with interest. He said it was “like the difference between buying a house outright and getting a mortgage... We need to draw a clear distinction between building costs and overall costs, which will actually now be less than under the previous system, because we won’t have to pay back the loan from industry. There would also be less risks, because with the new scenario, at least the risks are very clear. There’s the construction risk, which we shoulder, and then the private sector will shoulder the application risks.”

Asked again how come things so far had gone wrong, Barrot - getting quite heated now - insisted, “I don’t think Galileo has actually failed! That’s a misuse of language… we’ve had a change of scenarios.” He said, “There was a risk of delay… we’re changing scenarios to avoid failure.” He said the difficulties the consortium had in responding to the Commission, because companies disagreed, “may” have been due to state interference. He said, “Member states need to realise that the real results will come after the success of Galileo.... The project has not yet been completed – the return on the product will come when it is finished”, complaining that “Everyone wants their money back straight away!”

There were also a lot of questions about possible military uses for Galileo, to which Barrot replied, “Obviously there are civilian and military uses for this, but Galileo will remain a civilian system under civilian control, as the Council has reiterated time and time again. But that doesn’t mean that military users cannot use it, as long as they comply with certain principles. For example, we cannot stop the Italian Carabinieri or the Guarda Civil using Galileo to carry out their work, e.g. on search and rescue – these are military users.” He said Galileo “obviously cannot be off-limits to someone because they’re members of the military.” However he said he had no ‘mandate’ for discussing its military uses, saying he had tried to have conversations in London with ministers on this but lacked the necessary "mandate" for providing answers.

He summed up saying industry was “chomping at the bit” for Galileo, and that Europe must not wait, or it will fall further behind. Instead of wasting time asking “metaphysical” questions about its military uses etc, we should be seizing "Europe's chance to stay at the top of the league."

I feel so much clearer now...

PS nice summary of sentiments here : "According to the European Commission website, Galileo will be "fully operable in 2008 at the latest, with start of signal transmission in 2005." Let's hope the software is more up to date than the web page - If we're all going to be reamed for the cost of this unnecessary waste of cash - and we are - it would be nice if the ****ing thing works."

PPS - there's now a longer note on this whole issue on our website.

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