* The 3.4 bln euros plan needs extra 1.9 bln euro injection
* Galileo still on track for initial services in 2014
* Follows sacking of OHB-System boss over Wikileaks claim
* Cables show Galileo contractor saw final cost near 10 bln
(Adds Wikileaks detail)
By Pete Harrison
BRUSSELS, Jan 18 European space programme
Galileo is over budget and needs a further 1.9 billion euros
($2.5 billion) to make the satellite navigation system
operational, the European Commission said on Tuesday.
The news comes a day after the boss of one of the companies
involved in the project was fired over allegations he called it
a waste of money and predicted an even bigger final bill.
Most recently billed at 3.4 billion euros across 2007-2013
-- Galileo has been slowed by disputes over funding that only
ended when the 27-nation European Union agreed to invest public
money when commercial backers withdrew in 2007.
The system of 18 or more satellites aims to be operational
by 2014, rivalling the dominant U.S. Global Positioning System
network and plans by China and Russia to launch their own
About 1.2 billion euros of contracts were awarded last year
to companies including Italy's Finmeccanica SIFI.MI, Thales of
France (TCFP.PA) and OHB Technology (OHBG.DE) of Germany. But
not everything has gone according to plan.
"3.4 billion euros is not enough to complete the
infrastructure resulting from the Galileo programme, owing to
the increased cost of the development phase, the increased price
of launchers, the lack of competition for the award of some
packages...," the EU's executive Commission said in its mid-term
review of the project.
"An additional financial injection of some 1.9 billion euros
will be needed to complete the infrastructure of the Galileo
U.S. diplomatic cables obtained by Wikileaks and published
on Norway's Aftenposten website last week quoted Berry Smutny,
chief executive of satellite construction contractor OHB
Technology unit OHB-System (OHBG.DE), saying the final cost of
Galileo would balloon to 10 billion euros. Smutny was also
quoted calling Galileo a "a waste of EU taxpayers' money".
On Monday, OHB's board sacked Smutny over the alleged
conversations, even though a week earlier it appeared to stand
by his denial of the comments he was reported to have made.
Europe's industry commissioner, Antonio Tajani of Italy,
said on Tuesday he was committed to bringing Galileo to
fruition, to compete in a market for satellite services
estimated at 240 billion euros in 2020.
"Galileo will allow Europe to compete in the global space
technology market and to impose itself as one of the leading
players in a growing sector, characterised by increased
internationalisation and the entry of emerging economies," he
(Additional reporting by Maria Sheahan in Frankfurt; Editing by
Rex Merrifield and Andrew Callus)