European Diary: Europe's ambition to become a leader in space suffered a setback last week when a consortium building the Galileo satellite system failed to meet yet another deadline.
The consortium, which includes eight of the biggest European aerospace and telecoms firms, failed to agree a business plan for a project to provide navigation services to consumers, businesses and governments.
EU Transport Commissioner Jacques Barrot told journalists that investors were "afraid to take risk at this early stage" in the proposed public-private partnership. Instead, he proposed taxpayers should foot a €3.2 billion bill, which may climb even higher.
"It's €400 million per year, which equals about 400km of motorway," said Mr Barrot, who predicts Galileo will produce enough revenue when it eventually gets going to refund member states and the EU budget for the additional upfront payment.
Galileo, which detractors nickname "the common agricultural policy of space" for pouring money into a lost cause, would create a rival to the US global positioning system (GPS), which currently guides millions of EU motorists through city streets.
When complete, the system would use 30 satellites in orbit to pinpoint exact locations on the ground. People with mobile phonescould use the system to locate restaurants, while member states could use it to monitor natural disasters and emergency services. Yet the failure of the public-private partnership demonstrates that industry has doubts.
"As time has gone by, it became less clear when the Galileo system would be built and operational. This has caused private companies a lot of concern," says Chris McLoughlin of Inmarsat, one of the eight firms chosen to build and operate Galileo.
Delays have hounded Galileo. First announced in 2002, the project was due to become operational in 2009. But squabbling between states and companies means a new EU deadline of 2012 looks extremely challenging.
"Individual states have placed their own interests ahead of the projects," says Phil Davies, account manager for Surrey Satellite Technology Limited, the firm which built the only Galileo satellite completed and sent into orbit. "This has not been a good advertisement for showing how the EU can work together on projects." Disputes over which state should lead the project began as soon as it was announced in 2002. In 2005, political bickering over which companies should build and operate Galileo forced the main tender to be put on ice. It was later decided to merge the only two competing consortiums into one bidder, which ensured there were no losers among the competing firms from Britain, France, Italy, Germany and Spain.
Spanish demands to host a Galileo control centre when two already existed in Germany and Italy were the final straw for the commission, which finally halted the public-private partnership last week.
Supporters of Galileo, including Mr Barrot, argue that Europe needs its own satellite navigation system and cannot rely on GPS. They argue the US could turn the system off for commercial users (which it did temporarily during the Gulf War) or begin charging users for a service that is currently free.
Galileo is also the backbone for a host of future EU projects such as border management, road tolling or an EU army. Abandoning the system, it is argued, would waste the €800 million already spent on it.
But the project's detractors believe the system will never be able to recoup its huge investment, which the commission outlined as a key goal.
The US GPS system is currently being upgraded and is expected to be as accurate as Galileo by 2012. GPS is also free for commercial users, which undermines the ability of the operators of Galileo to make a business case.
China, an original partner in Galileo, is reportedly building its own competing navigation system, while an existing Russian satellite system may also be upgraded over the next few years.
EU transport ministers meet in Brussels on June 7th to decide Galileo's fate.
But even if the system does get built, there are no guarantees it will prove popular with users, given that they currently enjoy free access to the US rival system.