Galileo to be Grounded?

Plans to by the Europeans Space Agency to launch a satellite navigation system to compete with the U.S.'s global positioning system have ground to a halt following a break down in relations between governments and private contractors the Financial Times reported.

More from the Financial Times via MSNBC:

Jacques Barrot, the transport commissioner, said on Wednesday he was writing to the eight companies building the Galileo system to discover the reason for more than a year's delay. "They are just not working," said his spokesman.

Allegations that Spain is blocking progress until it is guaranteed more jobs and work by the multinational consortium led one critic to brand the project "Airbus in space". Spain said its companies were merely insisting that the consortium respect a 2005 commitment on the division of work.

EU governments fear that China could launch a competitor before Galileo is airborne. Governments will confront contractors representing the cream of European space industry at a meeting next week. "We will give the companies an ultimatum," said a French diplomat. "But what will happen if that does not work?"

Industry sources said they doubted work would restart until there was a guarantee it could win business from GPS, the free American military system that sparked the huge market in car navigation devices.

"There is a doubt over the revenues," said one. "Why sell Pepsi-cola when you can get Coca-Cola free?"

The consortium that is supposed to build the system is balking at sharing development costs, which have doubled from €1bn to €2bn. The consortium, comprised of some of Europe's leading technology companies has yet to establish a joint headquarters or appoint a CEO.

There were originally to be 30 satellites in place by 2010 but a spokesman said the system would not be operational until 2011. Meanwhile other countries are deploying their own satellite navigation systems. China recently announced that its Beidou system would cover China and its neighbours by 2008, with plans for global coverage sometime after that. Russian President Vladmir Putin has said that his country's GLONASS system will be operational over Russia by the end of the year, with worldwide coverage planned for late 2009.

See also: GLONASS to Top U.S.'s GPS, Putin Says
China Launches 4th Navigation Satellite in Effort to Compete With U.S., Europe
European Space Agency To Go Forward With Next Phase Of Galileo