On September 25, 2006, as the UN Security Council considered the imposition of sanctions against Iran for refusing to suspend sensitive aspects of its nuclear program, Gholam-Reza Aqazadeh, Vice President of Iran and head of the Atomic Energy Organization of Iran (AEOI), visited Moscow to discuss, among other issues, Russia’s on-going construction of the Bushehr nuclear power plant. Construction of the Bushehr plant, which is to be Iran’s first nuclear power plant, has been postponed numerous times since 1995 when Russia took over the project begun by Germany twenty years earlier. In early September, Seregy Kiriyenko, the head of the Russian Federal Atomic Energy Agency (Rosatom), had announced that completion and commissioning of Bushehr would be delayed a year to September 2007, with production of electricity scheduled to start in November 2007. [1]

En route to Moscow, Aqazadeh complained in an interview to the Iranian Fars news agency about Russia’s performance and claimed that, “Iranians are fully capable of accomplishing the construction process and putting the power plant into operation.” [2] Aqazadeh’s statement, which had the tone of a “final warning” that Iran was on the verge of breaking the contract with Moscow for the purchase of the facility, was the latest in a long line of Iranian accusations implying that Russia was intentionally delaying the completion of the project.

The comment, however, may also have been an expression of anxiety on the part of the Iranian official. Aqazadeh apparently viewed the prompt completion of Bushehr as a matter of some urgency: as his visit approached, he insisted that construction of the power plant could be completed within six months, rather than in the year announced by Kiriyenko, suggesting that saving even this amount of time in the construction schedule was of great importance to Iran. [3]

One reason for this concern is that Aqazadeh and his colleagues may have feared that the project would be frozen before completion because of action by the UN Security Council (UNSC). [4] The Council has been considering whether to impose an embargo on all nuclear trade with Iran, among other sanctions, because of Tehran’s refusal to comply with UNSC Resolution 1696. That resolution, adopted on July 31, 2006, demanded that Iran halt activities related to uranium enrichment and the production of plutonium by August
31, 2006, or face punitive measures. [5] Russia has opposed the imposition of sanctions against Iran, and deliberations on the matter within the Council are continuing. Although it is all but certain that the Bushehr project will be exempted from any sanctions at Russia’s insistence, Iran apparently remains concerned about this possibility.

The outcome of the September 25 negotiations in Moscow appeared to represent a compromise. Russia did not give ground on the timeframe for the completion of the project, but did offer to provide the fuel for the plant well in advance of the end of construction. Commenting on the talks, Sergey Shmatko, the head of AtomStroyExport, the Russian state-owned company that is constructing the nuclear power plant at Bushehr, reiterated the dates for the unit’s commissioning and first production of electricity previously announced by Kiriyenko. [6] An AtomStroyExport spokesman elaborated that “artificial acceleration” of construction at the site would have impaired the safety of the nuclear power plant, making the Iranian demands unrealistic. [7] A few weeks later, Shmatko explained that earlier postponements of the completion date were caused by the complexity of the project and that the original schedule had been “unrealistic.” [8] AtomStroyExport promised, however, that in three months the implementation of the final stage of construction would be reviewed and, depending on the progress made, an earlier date for completion might be set. [9]

In an apparent concession to Iran, at the negotiations Russia promised to supply the 80 metric tons of enriched uranium fuel for the nuclear plant’s initial core as early as March 2007. [10] The decision suggests an effort by Moscow to demonstrate its commitment to the project, notwithstanding delays in its completion, and it appears to signal that Russia will not support the Council’s imposition of sanctions that would jeopardize the venture. Russia not only has about $1 billion at stake in the contract for the unit, but Russian commentators have observed that the failure to complete the Bushehr contract might negatively affect Russia’s chances to win similar contracts elsewhere, especially in China. In this market, AtomStroyExport is directly competing for sales against Westinghouse Electric, the U.S.-based subsidiary of Japan’s Toshiba Corporation, and the French firm, Areva, SA. [11]

The reasons for Iran’s insistence that construction of Bushehr nuclear power plant be completed as rapidly as possible and Tehran’s apparent acceptance of a compromise that called for the unit’s fuel to be provided in six months are less clear. To be sure, early completion of the plant and advance receipt of its fuel would mean that Iran had fended off one form of possible UN sanctions aimed at pressuring it to halt other aspects of its nuclear program that could contribute to a nuclear weapons capability.

It is possible, however, that another factor, suggested by Pavel Felgengauer, a well known Russian journalist and critic of Russian President Vladimir Putin’s government, is also motivating Iran. In mid-November 2006, presumably reflecting a decision made earlier, Iranian President Mahmoud Ahmadinejad announced that Iran planned to install a uranium enrichment cascade of 3,000 centrifuges by March 2007; currently it has two cascades of 164 centrifuges in operation, as it attempts to master this technology. [12] Felgengauer has speculated that since enrichment of uranium to the low level necessary to produce nuclear power plant fuel is more difficult than further enriching low-enriched uranium to the level needed for nuclear weapons, the transfer of 80 tons of Russian low-enriched uranium to Iran could offer Tehran the ability to produce weapon-grade uranium on an accelerated basis by taking the fuel and further enriching it. It may be noted that the transfer would occur at the very time Iran was significantly enlarging its enrichment capacity and well before the low-enriched fuel was to be placed in the Bushehr reactor. [13]

It should be stressed that because the Russian fuel and all Iranian nuclear facilities would be under International Atomic Energy Agency (IAEA) accounting and inspection procedures (“safeguards”), the removal of the fuel from its intended use would be promptly detected, but whether the international community would be able to respond effectively to reverse this situation is by no means certain. Apparently because of such concerns, according to Felgengauer, “Washington has already told Russia that, while the continued slow construction of Bushehr is OK, the actual transfer of nuclear fuel without a comprehensive solution of the Iranian nuclear problem is unacceptable.” [14]

Although the Russia-Iran negotiations of September 2006 appeared to set a firm date for the completion of Bushehr nuclear power plant, the issue is apparently not yet closed. In November 2006, an unnamed source in Rosatom claimed that the completion date could still slip even further. The new schedule, he said, is “realizable, but optimistic,” and much will depend on how each party implements its own obligations, in particular whether the Iranian side fulfills its financial obligations. [15] Given that caveat and uncertainties regarding the outcome of the sanctions debate at the UN Security Council, it is clear that the last page of the story about Bushehr has yet to be written.

Nikolai Sokov – Monterey Institute Center for Nonproliferation Studies