EU Says May Scrap Space Plan Unless States Back It

BRUSSELS Reuters reported that The European Commission could withdraw its proposal to create a European version of the U.S. satellite navigation system GPS if countries do not back it next month, the EU's top transport official said on Tuesday.

Loyola de Palacio said she wanted European Transport ministers to give firm political and financial support for the $2.65 billion Galileo project at their next meeting in December, or the plan could be scrapped.

``We need a decision at the next transport council (ministerial meeting) on this issue. We can not postpone again the question. We must say yes or no,'' Transport Commissioner de Palacio told reporters.

``I am ready to propose to the Commission that we withdraw our proposal,'' she added.

EU member states have mixed views about Galileo, an ambitious plan to send up to 30 satellites into space over the next decade to create a European version of the U.S. military-run Global Positioning System.

Like GPS, Galileo would allow people equipped with a receiver to pinpoint exactly where they are, useful in a range of air, sea and land navigation systems, and location-related products available on third generation mobile telephones.

The main difference with GPS is that it would not be under the control of the U.S. military and would be a guaranteed continuous service for those opting to use it.

De Palacio is traveling to Britain on Wednesday where one of her priorities will be to secure the backing of Transport Secretary Stephen Byers for the scheme.

Britain, along with Germany and the Netherlands has been among the countries that have voiced concerns about possible spiraling costs of the project.

At a meeting in June, transport ministers agreed to inject 100 million euros into Galileo.

In December they will be asked to approve a further tranche of cash of around 400 million euros to cover the initial development phase, launching up to five satellites by 2005.

They must also decide on the nature of the private-public sector entity that will manage the project. France's Alcatel and Thales are among the private companies that have pledged a total 200 million euros as an initial investment in the project, Commission officials have said.

De Palacio said a cost-benefit analysis of the project by PricewaterhouseCoopers would be published later this week.

An EU diplomat said the results of this -- showing whether the scheme would prove economically viable -- would be crucial to whether EU states would give their full backing at the ministerial meeting on December 7.

The European Space Agency -- which has many of the same member states at the 15-country European Union-- recently pledged more than 500 million euros to the scheme.