German Government Proposes Galileo Budget Cuts to the EC

[Satellite TODAY Insider 10-26-10] The German Transport Ministry has asked the European Commission (EC) to propose cost-cutting measures for Europe’s Galileo satellite navigation system after an EC report confirmed the program was over budget and behind schedule, German government officials announced Oct. 25.
    In the EC proposal, Germany said it wants to shrink the costs of programs administered by the European Union (EU) and European Space Agency (ESA) by 500 million to 700 million euros ($696 million to $974 million). The German government said the measures are needed after its own research showed that the program faces further delays and additional costs of between 1.5 billion and 1.7 billion euros ($2 billion to $2.3 billion).
    German magazine Wirtschafts Woche reported Oct. 24 that the German government presented options in the EC proposal, which included scrapping plans to use Arianespace’s Ariane 5 launcher in favor of the Russian Soyuz launcher, which would see Galileo launch from Baikonur, Kazakhstan, instead of from French Guiana.
    The German government’s proposals follow an EC budgetary report, released Oct. 8, which found that the EU’s non-geostationary Galileo satellite constellation ran up extra costs and would not be ready for at least another seven years. The report also said that the Galileo project would be, “unprofitable over the long term, running at an annual loss of 750 million euros ($1.04 billion).”
    In May, the European Court of Auditors criticized the project as “ill-prepared and badly managed” and was skeptical that the EC would be able to begin Galileo operations in 2014. Overall, the EC estimates that the Galileo project’s development, construction and operating costs will cost EU taxpayers about 20 billion euros ($27.7 billion) over the next 20 years in development.
    It is now known whether the German government made recommendation to reduce satellite-manufacturing costs in the proposal. In March, Germany’s OHB System won an EU order for 14 satellites for Galileo. EADS Astrium and OHB are competing for orders for remaining satellites in the program.

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