June 22, 2011 / 4:55 PM / 7 years ago

Galileo to add 6 satellites, but reduce final bill

* Two final contracts signed, worth 354.5 mln euros

* Programme costs 500 mln euros less than previous estimate

* First satellites operational in 2014, with 24 total

By Christopher Le Coq

BRUSSELS, June 22 (Reuters) - Europe’s Galileo global navigation system has finalised its last two contracts, adding six satellites to the programme and saving 500 million euros ($717 million) from the final bill, the European Commission said on Wednesday.

The Galileo project, which the European Union hopes will rival the U.S. Global Positioning System network, will put 24 satellites into orbit instead of a previously expected 18, for a total cost of 4.8 billion euros.

The EU reduced the final bill through rationalising costs and putting pressure on industry for an improved deal, the European Commission’s industry spokesman Carlo Corazza said.

The final contracts, signed with France’s Thales Alenia Space and EADS Astrium for 281 million and 73.5 million euros, respectively, will contribute to providing services for humanitarian search and rescue missions, as well as functions restricted to government bodies and an open signal for all other users of positioning and navigation services.

“Signature of the contracts marks the end of a rigorous procurement process, and the beginning of a new chapter for Galileo,” EU Industry Commissioner Antonio Tajani said in a statement.

The European Commission has estimated that Galileo, which will send its first satellites into orbit this October, will deliver 60 billion euros to the European economy over 20 years and will also avoid the cost of relying on other systems.

But experts have questioned whether the system can deliver all the benefits and cost savings that its planners envisage.

The 27-nation European Union agreed to invest public money in Galileo when commercial backers withdrew in 2007, with the project having suffered setbacks because of disputes over funding.

The system, controlled by civil rather than military authorities, will provide initial services from 2014. ($1=.6971 Euro) (Reporting by Christopher Le Coq; Editing by Rex Merrifield and Will Waterman)

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