July 1, 2009 9:18 AM PDT

EC auditors criticize Galileo overruns

by Tom Espiner
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Europe's GPS project has been severely criticized by European Commission auditors for running over budget and deadline.

The Galileo satellite-network project, which aims to provide a European civilian rival to the U.S. military's GPS system, was launched in the mid-1990s, and due to be completed by 2013. The European Court of Auditors said in a special report on Monday that the project had seen "substantial delays and cost overruns."

The Galileo satellite-network project aims to provide a European civilian rival to the U.S. military's GPS system.

The Galileo satellite-network project aims to provide a European civilian rival to the U.S. military's GPS system.

(Credit: ESA- J.Huart)

The auditors' report covered the period from 2003 to 2006, when the project was managed by the Galileo Joint Undertaking (GUJ), a body set up by the European Commission and the European Space Agency.

The court concluded that management by the GUJ during this time period was inadequate. According to the auditors, the Galileo program experienced problems at different levels, including a failure to adequately negotiate and carry through a public-private partnership (PPP).

"The GJU's most important task was to negotiate a public-private partnership under which the private sector would invest, in partnership with the European Commission, in the creation and use of the Galileo infrastructure," said the report. "Negotiations with the private sector on a concession agreement stalled in early 2007."

The audit found that the partnership plan was inadequately prepared and conceived. As a result, the GJU was required to negotiate a PPP that the auditors described as unrealistic. The court said that the GJU's task of supervising technological development was seriously constrained by governance issues and an incomplete budget.

The Galileo project was initially budgeted at 3 billion euros ($4.24 billion), but a UK Transport Subcommittee estimated in 2007 that this could rise to 14.2 billion euros ($20.06 billion).

Also in their report, the auditors pointed out that the integration of European Geostationary Navigation Overlay Service (Egnos) into Galileo was only partially successful. Egnos is a joint venture with the U.S. and Japan to use ground infrastructure to track satellites.

The auditors also found that the Commission did not provide adequate leadership in developing and managing Galileo.

A Commission spokesperson was unavailable for comment at the time of writing.

Tom Espiner of ZDNet UK reported from London.

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Add a Comment (Log in or register) (8 Comments)
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by MadLyb July 1, 2009 10:21 AM PDT
Good to know that the EU is catching up with the US in ability to mismanage large technology initiatives. Maybe this will lead to competition to see which can do a poorer job.

8^P
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by Seaspray0 July 1, 2009 11:10 AM PDT
Excellent! LOL
by MMC Racing July 1, 2009 10:40 AM PDT
20 billion just to protect themselves incase the US decided to turn ours off.. Makes sense.
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by zevjansson July 1, 2009 11:33 AM PDT
Gasp! Are you sure this wasn't Microsoft's fault? I'm sure they were involved somehow, we can get the over budget moneis back by "fining" them for this... I'm certain they've done something anti-competitive with this... I'm certain EU consumers have been harmed by M$ is some way related to GPS.... this strategy has worked in the past for the EU... why stop now?
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by gjl229 July 1, 2009 2:19 PM PDT
Let's see. A European multi-national commission and a European multi-national agency combine forces to create a European multi-national, multi-commission/agency organization (MNMCAO) to create a public-private partnership. Of course.

Then we find that the MNMCAO inadequately conceived an ill-prepared plan that it was "forced" to negotiate with private organizations who've learned how to look after themselves.

As an aside, I still cannot find anything in this article to indicate who "forced" the MNMCAO to negotiate anything. Tom, this is why you shouldn't use the passive voice. It hides responsibility. I know you know better. Oh, wait. This is about the EU/EC. Never mind. Perfect occasion for use of the passive voice and obscured assignment of responsibility.

OK, where were we? Oh, yes. We are affecting to be surprised that an organization of organizations of more or less sovereign nations handled technology and project management in a political rather than effective manner.

I won't blame this on the EU or EC. They're in enough trouble over their nonsensical and peurile concept that a pint of beer must be replaced by the correct (if effete) number of milliliters. And that shopkeepers need be arrested for selling vegetable marrow by the pound instead of the newton.

Better call the auditors back in. They've a fertile field, I'm sure.
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by WriteRight July 2, 2009 7:07 AM PDT
@gil229

"Then we find that the MNMCAO inadequately conceived an ill-prepared plan that it was "forced" to negotiate with private organizations who've learned how to look after themselves."

Not sure what you mean here. Could you please point out where in the article it states that they, or anyone else for that matter, were "forced" to negotiate anything with anybody.

"They're in enough trouble over their nonsensical and peurile concept that a pint of beer must be replaced by the correct (if effete) number of milliliters. And that shopkeepers need be arrested for selling vegetable marrow by the pound instead of the newton. "

Hilarious! Where in heavens sake did you get that one from? I have the impression that you have never been in this part of the world at all. We have been using the metric system on the European continent since Napoleonic times and have since then never needed to calculate pints into their correct litre volumes. The only EU-country I know of that does sell beer by the pint is Britain and the drinkers there seem happily oblivious to how many millilitres a pint has as long as it tastes good. And as for your pounds and Newtons, are you really sure you know what you're talking about here? Or when was the last time you bought any groceries by the Newton? Two Newtons of tomatoes please, maybe? Try it next time you're in France at the local market and see what you get. The pound is a unit of mass, the Newton is a unit of force.
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by mupptasstic July 2, 2009 10:22 PM PDT
"And that shopkeepers need be arrested for selling vegetable marrow by the pound instead of the newton. "

You kind of shot yourself in the foot there mate....
Reply to this comment
by mupptasstic July 2, 2009 10:24 PM PDT
"Gasp! Are you sure this wasn't Microsoft's fault? I'm sure they were involved somehow, we can get the over budget moneis back by "fining" them for this... I'm certain they've done something anti-competitive with this... I'm certain EU consumers have been harmed by M$ is some way related to GPS.... this strategy has worked in the past for the EU... why stop now?"

Microsoft's tapped out of the kind of cash we need, so we're working on something to hose Apple, Boeing and a few others......this should be the motherlode of cash hauls.
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