Brussels, 10/05/2007 (Agence Europe) - As the private consortium responsible for the construction and operation of the Galileo project has not kept to its commitments in the past, the European Commission said, on Thursday, speaking through the voice of the spokesman for Transport Commissioner Jacques Barrot, that it would put forward proposals on 16 May for the construction phase of the project to be publicly funded. The spokesman thus confirmed comments by the German federal transport minister, Wolfgang Tiefensee, on Monday, who said the Commission and the EU presidency were contemplating increasing the share of public funding in the construction phase of the system by limiting the share of private sector funding to the operational phase (see EUROPE 9421).
Noting that progress has already been achieved, the Commission spokesman nonetheless stressed that progress was insufficient and that keeping the public-private partnership as envisaged initially would entail considerable delays in implementation of the Galileo project, not to mention the fact that it would be “far too great a risk for public funding”. “The best solution would therefore be to revise the public-private partnership and also the arrangements for the construction and operation phases”, he said, specifying that the “solution allowing us to make up for lost time as quickly as possible, and which is the best as far as costs are concerned, would be to have complete public funding for the infrastructure”. In response to questions from journalists who were concerned that such a solution would mean costs would be passed on to the taxpayer, the spokesman affirmed that public financing would be less costly than to contract a 100% private loan at market value. He also explained that the consortium was calling on the public authorities to provide a 100% guarantee not only for the risk but also for the debts incurred by Galileo. The public funding scenario “will not be more costly for taxpayers but will provide greater protection for them”, he assured. On Wednesday, TAE, the Taxpayers' Association of Europe, had called for a “critical examination of Galileo”, if not for it to be given up altogether, as, TAE said, delays so far would already cause “losses of billions of euros”.
Mr Barrot's spokesman also confirmed that, “in principle, the Community budget should be used to finance the construction of infrastructure if the public funding scenario is endorsed by the Council of Ministers”. Such a scenario would, in addition to amendments to the concession contract, involve another €2-3 billion to be borne by public finances. Currently, €1.4 billion in “public” funds is earmarked for the project. (ol)