Eutelsat says delays could weaken Galileo project

By Astrid Wendlandt

PARIS, Jan 14 (Reuters) - Europe's Galileo satellite navigation system will struggle to compete with rival U.S., Russian and possibly Chinese systems unless it is delivered on time, satellite operator Eutelsat (ETL.PA) warned on Monday.

Russia and China are developing their own satellite positioning systems and the United States is deploying a second generation global positioning system (GPS) on which billions of dollars of navigation products and services depend.

"We cannot afford any further delays in the implementation of Galileo," Eutelsat Chairman and Chief Executive Giuliano Berretta told Reuters in an interview.

Berretta said Eutelsat was in talks with Brussels and the European Space Agency to help make sure the programme would be implemented on time in 2013 and within budget. Discussions have been taking place for at least six months, he said.

The European Commission meanwhile defended its 3.4 billion euro ($5 billion) cost forecast for the programme on Monday following a report the budget is bound to be seriously overrun.

German weekly Der Spiegel quoted a confidential Berlin government report as forecasting that Galileo will cost at least 1.5 billion euros more than the EU executive believes.

"The estimates we have are really based on solid ground," the Commission's transport spokesman, Michele Cercone, told a weekly news briefing.