EC: Galileo, EGNOS Satellite Navigation Programs to Cost $7 billion

[Satellite TODAY Insider 01-21-11] The European Commission (EC) now estimates that the Galileo and European Geostationary Navigation Overlay Service (EGNOS) satellite navigation programs will cost more than 5.3 billion euros ($7.13 billion), excluding operational costs to complete, according to an EC review released Jan. 19.
    While the two programs constitute the largest satellite investment in EC history, the commission has come under criticism for allowing costs to dramatically increase from its earlier forecasts made 10 years ago, when the European Space Agency (ESA) estimated the cost of the overall program at 2.7 billion euros ($3.5 billion). 
    The EC defended the programs by stating that the global satellite navigation applications market is expected to be worth 240 billion euros ($322.91 billion) by 2020 and has been growing at a rate of 30 percent over the past few years. “It is currently estimated that 6 to 7 percent of GDP of developed countries in Europe — 800 billion euros — depends on satellite navigation,” the commission said in the review.
    The European Union budget will finance Galileo and EGNOS with 3.4 billion euros ($4.57 billion) through 2013. It is estimated that 1.9 billion euros ($2.56 billion) will be necessary to complete the Galileo infrastructure from 2014 to 2020, bringing the total cost of Galileo to more than 5 billion euros ($6.73 billion). The operational costs of Galileo and EGNOS together are estimated to be 800 million euros ($1.07 billion) annually.
    The EC also said that two major Galileo contracts would be issued in 2011 for ground infrastructure. The first four contracts, engineering support, construction of the satellites (with an order placed for 14), launch services and operations were allocated in 2010 for roughly 1.25 billion euros ($1.68 billion).
    The commission said that Galileo’s successful testing of its first four operational satellites means the navigation system will deliver initial services in 2014. EGNOS became operational in 2009.

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