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Last Updated: Thursday, 14 February 2008, 10:08 GMT
Galileo: Star project or black hole?
Britain could be on the verge of a belated re-entry into the space race, with the launch of a review into whether its astronauts should take part in future international exploration.

Nasa is also due to give its formal backing to a British-led 100m unmanned mission to the Moon.

These are clearly exciting times for Britain's space industry - which has suffered in the past from a lack of government investment and political neglect.

The UK missed out on the boom in satellite launches when it cancelled its own rocket programme in the early 1970. but Britain has, however, become a world leader in the manufacture of small satellites.

Science Minister Ian Pearson says space is currently worth 7bn to the UK economy and the sector is growing faster even than China's space industry.

But while ministers turn their gaze to the stars - and dream of Britons venturing to other planets - there is one long-running space saga which still has the power to bring them back down to earth with a bump.

Galileo - Europe's planned rival to America's Global Positioning System (GPS) - has been beset by a series of cost-overruns and technical delays since it was first proposed at the end of the last century.

The first of about 30 Galileo satellites should have been in operation this year, somewhere in Earth's orbit - but will not now fly until 2013.

Hidden agenda?

The project was saved from cancellation last year by diverting cash from EU agricultural budgets, but now that national governments have to foot most of the bill for its development, there are still question marks over its future funding.

Galileo orbit map
A European Commission and European Space Agency project
30 satellites to be launched in batches by end of 2011-12
Will work alongside US GPS and Russian Glonass systems
Promises real-time positioning down to less than a metre
Guaranteed under all but most extreme circumstances
Suitable for safety-critical roles where lives depend on service

The British government - in line with the official EU position - argues that although the cost of Galileo has grown, its potential commercial benefits have also increased.

One recent study found the benefit to the UK economy of Galileo between 2013 and 2025 is likely to be 14.2bn.

"Sat nav" has certainly become ubiquitous since it was first introduced to the public in the mid 1990s.

The GPS system was originally developed by the US military to target missiles and guide troop movements but now has dozens of commercial applications from helping motorists find their way about to ships' navigation, search and rescue and road pricing.

But why does Europe need its own "sat nav" system when the rest of the world uses GPS or an equivalent Russian or planned Chinese system?

The British government says it is important for Europe to have an "independent" system.

Another key difference is that the EU plans for users to pay for Galileo, whereas GPS is currently free to all who wish to use it. Its advocates also say it will be far more accurate than GPS, especially in relation to timing signals relayed from space

But critics say Galileo is more about the projection of European political power and prestige on the global stage, than any hard commercial benefits.

And although the EU insists Galileo is for civilian use only, opponents suspect a hidden military agenda - that the system could be used to as a guidance system by a future EU army, independent from NATO.

But it is the cost question that is causing the most concern among MPs at Westminster.

'Pooled budget'

The British government has always insisted it will not support Galileo "at any price" - but ministers have been decidedly reluctant to say how much they expect the final bill for UK taxpayers to be.

Last year, transport minister Rosie Winterton told MPs the UK had contributed 96.7m - approximately 17% of the total spent so far - in line with the UK's annual contribution to the EU budget.

But, she stressed, that was not necessarily a guide to the amount it might pay towards the project over its entire lifetime, as the UK can withhold funds for specific projects.

Government whip Lord Bassam was even less forthcoming when asked last month in the House of Lords how much Galileo would cost the UK.

"The total estimated costs to 2030 are estimated to be something like 7.8bn. I cannot give a precise figure for the UK contribution, as it is part of a pooled budget," he told peers.

The Commons transport select committee believes the final cost of the Galileo project will be considerably more than that - at least 9.7bn by 2027. If Britain pays 17% of that it will cost UK taxpayers about 86m a year.

But the problem, as with most large-scale, long-term technology projects, is that the final bill is difficult to calculate with absolute certainty.

Leap of faith?

Galileo's supporters argue that such projects always require a leap of faith from the governments involved - who must gamble that the commercial benefits will continue to outweigh the costs, even if those costs spiral far above original estimates. Aerospace giant Airbus faced similar objections in the 1970s, they argue.

Transport Secretary Ruth Kelly came close to acknowledging this last month when she gave evidence to the Commons treasury committee.

We just don't think Galileo will work
Gwyneth Dunwoody MP

"It is absolutely true that the costs have increased," she told MPs.

"However, our estimate of the benefits has also increased and that does not take into account any potential commercial financial opportunities that there will be for the new system."

Galileo, named after the 16/17 century Italian astronomer, has already experienced cost overruns totalling 1.8bn.

But Ms Kelly said Britain had secured an agreement from the European Commission that the project's finances would be scrutinised at key points in its development to discover if costs had ballooned still further.

"Then we would have to reassess the costs and benefits and see what political support we had for a change of policy, and review the case," she told the Transport committee.

Grave reservations

So Britain's future involvement will remain under review - but the problem, according to Commons transport committee chairman Gwyneth Dunwoody, is that the European Commission's figures are unreliable and "so muddy it's impossible to see what the costs and benefits would be".

Mrs Dunwoody's committee has branded Galileo "a textbook example of how not to run large-scale infrastructure projects".

It is particularly concerned that the system will be financed from the government's transport budget - money Mrs Dunwoody believes would be better spent on improvements to Britain's transport infrastructure.

"We feel grave reservations about such an enormous sum coming out of transport," says the Labour MP.

"We could clear important transport schemes in the UK with that money - it accounts for two thirds of Crossrail."

The transport committee argues that the Galileo scheme has not been properly managed.

"We thought it essential to have a proper cost benefit analysis," says Mrs Dunwoody.

GPS device
The satellite could be used for navigation and positioning

"There needs to be made a very good case for this alternative to what there is already available."

The government argues Galileo will be a boost for the UK's satellite industry, one of the country's few high-tech success stories of recent years.

The Department for Transport says that already "UK industry has won contracts valued in excess of 200m euros (148m) from the European Space Agency."

And UK firms could be in line for an even bigger slice of the commercial action after the government secured an agreement to open up the procurement process to greater competition.

'Additional value'

The European Commission estimates that the satellite will, over 20 years, rake in 6.28bn in direct commercial revenue.

In addition, the Commission argues, it will generate 37-44bn of "additional values" - in the form of extra jobs and the increased market share of European businesses making global positioning products, benefiting from the improved technology.

The market it could tap into is predicted to be worth 300bn by 2025.

Benefits to the UK could be further derived if Cardiff is successful in a bid to house the supervisory authority for Galileo.

But will Galileo ultimately be the best use of money from Britain's tightly stretched transport budget? Mrs Dunwoody thinks not.

"In a country that needs very large investment in transport infrastructure, this is nonsense," she tells the BBC News website.

She also questions whether Galileo's supposed technical superiority will be enough to produce commercial success on the scale claimed by the government.

"We just don't think Galileo will work," says Mrs Dunwoody.

"The benefits, it appears to the committee, are far outweighed by any costs."

What do you think? Is Galileo going to cost too much? Or is it a price worth paying for the benefits it will bring to British industry? Send us your comments using the form below.

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'Unanimous backing' for Galileo
30 Nov 07 |  Science/Nature
Pros and cons of Europe's 'GPS'
30 Nov 07 |  Science/Nature
Satellite tie-up for fast Galileo
28 Nov 07 |  Science/Nature
Galileo 'compromise' is emerging
23 Nov 07 |  Science/Nature
MPs urge action on Galileo costs
12 Nov 07 |  Science/Nature
EU monies 'should fund Galileo'
19 Sep 07 |  Science/Nature
Galileo challenges sat-nav firms
17 Jul 07 |  Science/Nature

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