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Sat-nav rival could crash and burn

This article is more than 16 years old
European system taking on US military's GPS faces collapse over multi-billion-pound deficit

For the past 18 months, a small box-shaped satellite has been circling Earth, beaming down information from its radiation detectors and atomic clocks. The British-built probe is modest by modern space technology standards. Yet great hopes are riding with Giove-A, for it is intended to be the forerunner of a fleet of 30 satellites that will provide Europe with an alternative to reliance on American technology.

Giove-A is a test satellite for Galileo, a multi-billion-pound European Union project to provide pilots, farmers, trawler fishermen, truck drivers, mobile phone owners, businessmen and private citizens with the means to pinpoint their positions to a few centimetres. Using Galileo, motorists will be charged for each second they spend on roads, while the blind could be provided with guides to help them move around cities in safety.

At least that is the theory. The trouble is that a few weeks ago the consortium of European aerospace companies created to run Galileo collapsed in acrimony. The EU, which has already committed £2.5bn to the project, faces a bill of a further £4bn or £5bn to rescue Galileo and take it into public ownership. Some countries, including France, want each member EU state to raise cash to do this. Others, like Germany and Britain, want the money to be diverted from other EU projects. Some sceptics think the project should be axed completely. This autumn, the different sides will meet and do battle over Galileo's future in the corridors of the EU's Brussels headquarters.

Only one point is agreed: unless the EU steps in, Giove-A, built by Surrey Satellite Technology, will be the only piece of working hardware created as part of Galileo. To European technology companies, that prospect is untenable. 'If Galileo collapses, it will be the collapse of the most important EU programme outside the Common Agricultural Policy,' says Olivier Houssin, of the French electronics group Thales. 'Europe is stagnating in space.' In fact, Galileo has been mired in controversy since it was conceived 10 years ago. There is already a service that allows holders of GPS (global positioning system) handsets, including car sat-nav devices, to pinpoint their positions free. Why spend billions of euros on a second one, critics demand.

Galileo's supporters say the current GPS system, run by the US air force, could be turned off at any time that the US military decided, causing mayhem for European trucking companies, sat-nav firms, mobile phone operators and other users of GPS devices. In addition, current GPS devices are based on technology designed in the 1980s and have an accuracy of between 3 and 15 metres. Galileo, using 21st-century technology, can determine locations to within centimetres.

With this kind of accuracy, you would know the exact position of people calling you by phone and you would be able to pinpoint a computer that had sent a particular email; and the precise time signals used by Galileo - accurate to one or two billionths of a second - would allow City brokers to conduct multi-billion-pound financial transactions with a pinpoint accuracy that could save millions of pounds in interest for companies.

'There is more to Galileo than just giving Europe insurance in case the US pulls the plug on the world's GPS system,' said Patrick McDougal, of the satellite communication group Inmarsat. 'It would give satellite navigation a new level of sophistication and open up all sorts of new uses for the technology.'

Europe's decision to back Galileo also annoyed the US, particularly as a deal was agreed allowing China to buy into the project. One US general even threatened to blow Galileo satellites out of the sky if it was found that enemies of America were using its signals, it was claimed. Such threats have been quietly forgotten and America is maintaining a low profile, hiding its glee about Galileo's current misfortunes.

For the EU, whose 2000 Lisbon declaration stressed Europe's need to make itself the hi-tech powerhouse of the world, the woes of Galileo are a distinct embarrassment. The system should be in operation by now. At best, it will come on line in 2012, although there remains a distinct chance that the project may be quietly dropped.

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