PARIS — In July 2008, the European Commission told its 27 member governments that it would cost 700 million euros — $1 billion at current exchange rates — to launch about 28 Galileo navigation and timing satellites.

That works out to an average of 25 million euros per satellite launched aboard European Ariane 5 rockets, which could carry four Galileo spacecraft apiece, or aboard the European version of Russia’s presumably less-expensive Soyuz vehicle, which would carry two spacecraft at a time.

On Jan. 7, the commission announced that, in consultation with Galileo’s contract manager, the European Space Agency (ESA), it would sign an initial contract with Europe’s Arianespace consortium to launch 10 Galileo satellites on five Soyuz vehicles for 397 million euros.

That’s 79.4 million euros per Soyuz launch, or 39.7 million euros per satellite, a 59 percent increase over the cost estimated 18 months earlier.

“The cost of Russian launchers in general has gone up in the past several years, and not just for Soyuz,” ESA Director General Jean-Jacques Dordain said in a Jan. 14 press conference when asked to explain the difference between the estimated and actual launch costs.

“I’ve negotiated Rockot launch costs and they too are no longer what they used to be,” Dordain said, referring to the converted Russian ballistic missile now used to launch small satellites into low Earth orbit.

Dordain said further that the Evry, France-based Arianespace, which will be operating the Soyuz vehicle alongside the heavy-lift Ariane 5 rocket at Europe’s Guiana Space Center in French Guiana, is obliged to accept the Soyuz costs that are sent to it by Russia’s Roskosmos space agency.

“ESA member governments accepted that Soyuz would be commercialized at our spaceport on one strict condition: that Arianespace not lose a single euro on Soyuz operations,” Dordain said. “So cost increases in Russia are passed on by Arianespace directly to its customers. That’s the fact of the matter.”

ESA Launcher Director Antonio Fabrizi agreed with Dordain that Russian costs have increased sharply, and added that the European Commission in mid-2008 did not have the full picture of what it would take to launch the Galileo constellation.

“The Soyuz price is composed of two elements,” Fabrizi said in a Jan. 14 interview. “The first is the cost associated with Arianespace operations, and these costs are in line with our expectations. They have not increased much beyond the inflation rate. We are able to audit these charges, and we know this is the case.

“The second component is the cost in Russia. Rockot prices, for example, have increased by 100 percent in five years. My sense is that the cost for Soyuz negotiated by Arianespace reflects smaller increases than you see with other Russian rockets.”

In addition to these elements, Fabrizi said, the Soyuz variant to be used for the Galileo launches includes a modified upper stage with a larger fuel tank, plus an adaptor to carry the two Galileo spacecraft. Neither of these elements was included in the commission’s 2008 cost estimate, he said.

“We have seen this sort of thing before, where engineers’ cost estimates later prove to have been unrealistic. It’s not unique to the Galileo program,” Fabrizi said, adding that, to his knowledge, ESA was not involved in preparing the commission’s mid-2008 Galileo launch-cost estimate.

Arianespace Chief Executive Jean-Yves Le Gall said the commission’s estimate likely did not account for the fact that numerous subsystems for the Europeanized Soyuz to be used to launch Galileo are built in Europe and billed in euros, not Russian rubles.

“The dispenser for the Galileo version of Soyuz is made in Europe, and the adaptations to our launch installation necessary for Galileo is also provided by European contractors and paid in euros,” Le Gall said in a Jan. 15 interview. “We will need to build, in effect, a dedicated clean room for Galileo to assure the launch cadence that the European Commission wants. The conclusion here is that it is very expensive to launch a constellation of satellites.”

European Commission officials have said that the first five Soyuz launches of Galileo satellites would begin in late 2012 and occur at three-month intervals.

Peter B. de Selding was the Paris bureau chief for SpaceNews.