Italy begins building key Galileo control centre

An artist's illustration of the Galileo satellite navigation system, meant to rival the U.S. Global Positioning System (GPS), in an undated image. An Italian-led venture began building a key control center for Europe's biggest single space program on Thursday, dismissing fears the project would struggle to compete effectively with its U.S. rival.

FUCINO, Italy (Reuters) - An Italian-led venture began building a key control centre for Europe's biggest single space program on Thursday, dismissing fears the project would struggle to compete effectively with its U.S. rival.

The Galileo satellite navigation system, meant to rival the U.S. Global Positioning System (GPS), has been plagued by delays and bickering over who foots the bill until the European Union agreed this month to pump $3.4 billion from its coffers.

That removed the main stumbling block for the project, but it still needs to move ahead quickly to be useful, said the chief executive of Italian defense company Finmeccanica SpA, one of eight companies involved in the project.

"The big problem at the beginning was to find funds, but now the European Commission has decided to take care of the financing," Pier Francesco Guarguaglini told reporters at a ceremony to lay the foundation for one of two control centers for the system. "If we proceed very quickly it will be worth it. Otherwise we will waste our money and our time."

He played down concerns the project might not be commercially viable since the GPS system is free, pointing to its superior accuracy over the American system.

"The precision of this system is much better than GPS," he said. "At the end, we will have 30 satellites and 30 means more precision."

He declined to specify how much Finmeccanica is investing in the project, which is estimated to cost about 3.4 billion euros.

The company is part of a consortium that includes aerospace giant EADS, France's Thales and Alcatel- Lucent, Britain's Inmarsat Plc, Spain's AENA and Hispasat, and an eighth member that includes Deutsche Telekom AG and the German Aerospace Centre.

For many politicians, Galileo has boiled down to a question of European pride that showcases technological innovation and guarantees strategic independence at a time when satellites are used for everything from air traffic control to rescue operations.

In Fucino, set in the desolate, rolling hills of central Italy, politicians and business executives scooped dirt and stone to lay the foundation for the new control center after hailing it as a symbol of Italian pride and innovation.

On hand for the ceremony, Senate speaker Franco Marini called it a "tangible demonstration" that tradition and the future had merged in an Italian region that was once known more for its potato crop than its technological prowess.

The Fucino center is being built by Telespazio, a satellite services joint venture between Finmeccanica, which has a 67 percent stake, and Thales, which owns the rest.

The other control center is being built in Munich and will be managed by the German Space Agency.

The first test satellite under the Galileo program was launched in December 2005 and the first four operational satellites will be launched by the end of 2009.

All 30 satellites should be launched by 2013.