EADS and Alcatel are squaring up for the battle to win the contract to deploy the European Galileo satellite navigation system, in a contract which could be worth up to €15.6billion ($18.4 billion). The Galileo Joint Undertaking, run by the European Commission and the European Space Agency, invited private sector companies to submit proposals for the contract last week.

The qualifying companies or teams will be selected in December, and will go on to bid formally in 2004 to deploy the system, which will include 30 satellites and two ground stations, in 2006-7. The winner will also run the system after it becomes operational in 2008.

Of the project's €3.5 billion budget, €1.1 billion has already been provided by ESA and the EC, leaving the private partner with up to €2.3 billion to provide itself. ESApoints out that the potential revenues are huge: "They will make money from providing specialist Galileo services, such as search and rescue...according to the study [conducted by Pricewaterhouse Coopers last year] it is worth up to 4.6 times the money they put in, "ESA says.

Alcatel says: "We are interested, but if we bid - it is still too early to say whether we will bid - It will be as part of a partnership." It says it has already started talking to potential financial and technical partners.

EADS, already involved in the construction of the Galileo hardware, will also bid, but says: "We are not sure whether we will be EADS alone or part of a partnership. There is a lot of risk involved."

Source: Flight International