Consortiums get nod to build EU satellite system

reuters ^ | 27 June 2005 | Jeff Mason

[Magnum44]

LUXEMBOURG (Reuters) - A long battle to win the rights to build and operate the European Union's new satellite navigation system ended on Monday with approval for the two former rival consortiums to make a joint bid.

Galileo, the multi-billion euro project seen as a competitor to the U.S. Global Positioning System, is scheduled to go into service in 2008 and eventually will have 30 satellites for mostly civilian uses.

The two consortiums -- made up primarily of French, German, Spanish and Italian industrial heavyweights -- said they wanted to join forces in May after the body charged with awarding the contract, known as the Galileo Joint Undertaking (GJU), declined to pick one group as the preferred bidder.

The GJU, set up by the European Commission and European Space Agency, said on Monday the combined bid was of better value to the public and talks on the concession contract would conclude before the end of 2005.

"The evaluation of this joint proposal, compared to both individual offers, showed a significant reduction in the financial contribution from the public sector and an increase in the foreseen commercial revenue," the GJU said in a statement.

"It also complies with the foreseen timetable and will not lead to any delay in the program."

The two groups are: iNavSat, made up of European aerospace giant EADS, France's Thales and British based satellite communications group Inmarsat; and Eurely, made up of France's Alcatel, Italy's Finmeccanica and Spain's AENA and Hispasat.

"Both Eurely and iNavSat can now complete the merger of their consortium and, jointly with the GJU, proceed toward the final concession contract negotiations," the groups said in a statement, applauding the GJU's green light.

Transport Commissioner Jacques Barrot welcomed the decision.

"I am very pleased with today's decision to start negotiations on the contract for Galileo with the joint Eurely/iNavSat consortium," he said in a statement. "Galileo is an exciting technological revolution. It will generate many industrial spin-offs and benefits for European companies."

The concession period will run for 20 years, from 2006 to 2026. Documents provided by the EU executive showed the joint bid would lead to a 20 percent increase in expected commercial revenues, thanks to combining know-how in areas like telecommunications, transport, and receivers.

"The GJU will now start to prepare the negotiations on the concession contract on the basis of this joint proposal; the negotiation process shall be concluded before the end of 2005," Rainer Grohe, GJU Executive Director, said in a statement. The 25-nation EU has enlisted international partners including China and Israel to help fund the project, which the EU's executive Commission says will cost 2.1 billion euros ($2.6 billion) in its deployment phase alone.

The Commission aims to fund deployment with 1.4 billion euros ($1.71 billion) in private sector funds and 700 million euros from the EU budget.

[Magnum44]

The EU, in its ever myopic jealousy of US tech, has finally agreed that it could not agree on who to fund their new welfare project, so they will fund everybody. They still dont grasp what competition is about. But hey, this 'everybody feel good' project that does not provide anything that the US GPS system doesn't already provide users essentially for free may turn into the EU's version of the Soviets bankruptcy during the 80's. What a waste of resources. Enjoy.

[jveritas]

You are absolutely right. They do not what is competition and this whole “almost dead” EU thing is driven by blind jealousy on how to compete with the United States. Furthermore, whatever they build it will be at least 10 years behind us in technology.