The European Commission is planning to take on the entire £2.4bn cost of creating Galileo, Europe's global positioning system.

Transport commissioner Jacques Barrot said yesterday (19 September) that consumers wanted GPS and insisted, "Galileo will make money, and with the EU as its owner, it will generate income for the E.U. budget."

Barrot's confidence wasn't shared earlier this year by the companies initially picked to share the cost and benefits of building the 30-strong constellation of satellites.

Unsure of the costs and unconvinced of Galileo's eventual commercial potential, the companies dragged their feet to a point in June where the Commission abandoned the partnership with the private sector.
http://www.computerworlduk.com/management/government-law/public-sector/news/index.cfm?newsid=3423

Under the original plan, public money was supposed to pay for the first four satellites and then the private consortium of companies building the satellites were to pay for two-thirds of the 26 remaining satellites.

This amounted to a private sector cost of €2.4 billion. The companies - AENA, Alcatel-Lucent, EADS, Finmeccanica, Hispasat, Inmarsat, TeleOp and Thales - were to recoup their investment costs by then operating the satellites and collecting fees once they were in operation.

Barrot said Wednesday that the Commission wants the €2.4 billion to be paid for out of European Union funds. The EU. has already committed €1 billion to the project.

"Galileo is extremely important for the strategic autonomy of Europe. We can't let this opportunity to manage the know-how in this advanced technology pass," Barrot said.

Separately, US president George Bush said that he will stop the US-based GPS signal from being interrupted or degraded by military purposes.

One of the main justifications for launching Galileo was that GPS is ultimately at the mercy of the US Department of Defence, and could be jammed for strategic reasons, potentially endangering private users' lives. Galileo is intended to be purely for civilian use.