Galileo an 'orbiting Railtrack', say MPs

Galileo, the long-delayed European satellite navigation project, has been branded an "orbiting Railtrack" by MPs, who are calling for a public debate about whether the initiative should be scrapped altogether.

In a report by the Transport Select Committee, Gwyneth Dunwoody, the chairwoman, warned that the total costs of the effort to establish an alternative to America's Global Position System (GPS) could soar to £10bn, and that it is was unclear whether it represented value for money.

She objected to proposals by the European Commission to redirect ¿2.4bn in agricultural funds to fund the next phase of Galileo.

"The Government must stop this folly, and endeavour to bring the [EC] to its senses. The Commission is poised to spend billions of taxpayers' money on a satellite system without any realistic assessment of its costs and its benefits. To fund this, it is prepared to break all the rules for prudent budgetary discipline," she said.

"We have asked the Government to ensure that the UK Parliament has the opportunity to scrutinise and debate this project properly before a decision is made at European level."

The report follows the collapse last summer of negotiations that the European Commission was holding with the consortium of private companies chosen under a public-private partnership (PPP) arrangement over the funding of the deployment of up to 30 satellites, the most expensive phase of the project.

The companies, including EADS, Thales, Finmeccanica and Alcatel-Lucent, balked at the EC's demand that they pay two-thirds of the ¿2.1bn cost of launching the satellites.

The consortium walked away in June, prompting ministers to propose in July that unspent farm subsidies be redestined for Galileo. The EC also increased the cost estimate of the project.

Originally slated to come into operation next year, Galileo has launched just one test satellite, and is not expected to become operational until 2013 at the earliest. European transport ministers have failed to break an impasse in recent weeks over the best way to fund the project.

The Transport Select Committee has made its own calculations about how much the satellite system would cost to set up and run for the next 20 years, arriving at the £10bn figure.

The UK still favours a PPP arrangement, even if only for part of the project.

"The EU appears to be sleepwalking into a further vast financial commitment to Galileo," Ms Dunwoody said. "What taxpayers really need and want is better railways and roads, not giant signature projects in the sky, providing services that we already have from GPS and other systems.If this is not stopped, Europe could end up with an orbiting Railtrack which may be obsolete evenbefore it is operational."