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Against U.S. Wishes, Russia Will Sell Reactors to Iran

The New York Times March 7, 1998

By MICHAEL R. GORDON

MOSCOW -- In a rebuff to the United States, Russia's Atomic Energy Ministry said on Friday that it plans to sell several additional nuclear reactors to Iran.

The disclosure came as the United States signed an agreement in Kiev under which Ukraine would withdraw from the Russian program to build a reactor at Bushehr, Iran.

American officials said that the Ukrainian accord would seriously delay the project. But Russian officials insisted that Moscow could complete the reactor on its own and had even dispatched a senior official to Iran to negotiate further sales.

Georgy Kaurov, a spokesman for Russia's Atomic Energy Ministry, said in an interview that an "agreement in principle" concerning future reactor sales had been reached in recent talks in Tehran between Iranian officials and Vladimir Bulgak, a Russian deputy prime minister.

The political ramifications of the reactor sales outweigh the immediate implications for security in the volatile Middle East.

Work on the additional reactors would not begin until the first reactor at Bushehr is completed, a process that by Russian estimates will take two and half years. And some American officials doubt that Iran will ever be able to pay for all of them.

Still, the jousting by American and Russian officials underscores their inability to come to terms on the question of Iran and casts a cloud over next week's talks between the Russian prime minister, Viktor Chernomyrdin, and Vice President Al Gore.

Gore has used his meetings with Chernomyrdin to showcase his expertise on foreign affairs to American voters. The Iran issue threatens to disrupt the carefully scripted scenario Gore's aides have developed of weighty policy deliberations that lead to American-Russian accord.

Russia's nuclear sales to Iran have long been a sore point in American-Russian relations. It began when Russia's former Minister of Atomic Energy, Viktor Mikhailov, shocked Washington by negotiating a major deal that provided for the sale of a reactor as well as advanced nuclear technology.

Under American pressure, the Russians curtailed, but did not drop, that deal. Moscow decided to proceed with the construction of a VVER-1,000 megawatt reactor at Bushehr for a sum of about $850 million.

American officials say that Clinton also received a private assurance from President Boris Yeltsin that Russia would not expand its nuclear cooperation. By Moscow's interpretation, that commitment does not preclude the sale of additional reactors to be built at Bushehr.

As outlined by Kaurov, the Atomic Energy Ministry's plan for exporting reactors to Iran goes as follows:

Russia plans to speed construction of the VVER-1,000 megatwatt power reactor at Bushehr. If Russia then determines that Iran is allowing international monitoring, Moscow will consider building a second one at the same location.

The next step would be the construction of two new VVER-640 power reactors, which are still being developed. They also would be located at Bushehr and completed early in the next century.

The Russians insist the reactors would be used for civilian purposes and would be subject to international inspections. But American officials say the reactors would enable Iran to develop the expertise it needed to launch a clandestine weapons program and could be used by Tehran to mask the illicit purchase of nuclear technology.

The sale of the reactors would be a badly needed boost for Russia's cash-strapped nuclear complex. But whether all of the reactors will be ever be built is also a point of contention.

While Russia is trying to speed up the lagging construction of the first reactor, a senior American official insisted that Iran does not have enough money to bankroll Russia's heady plans for new reactor sales.

"Whether they can get the first one done is iffy, and the chance of them completing the second, third, or fourth is highly unlikely," the American official said.

He dismissed the statements about new reactor sales by Russia's Atomic Energy Ministry as a "political reflex" to the American-Ukrainian agreement.

American officials say they are more worried about Iran's ongoing efforts to acquire from the Russians the technology to enrich uranium and separate plutonium from spent fuel.

Still, American officials are worried enough about the reactor sales that they have sought to frustrate the construction of the first reactor, even though it meant angering the Russians just before Gore's meeting with Chernomyrdin.

Friday, Secretary of State Madeleine Albright and the Ukrainian foreign minister, Hennadiy Udovenko initialed an accord that blocks Ukraine's state-owned ADA Turboatom from providing turbines for the Russian project.

Kaurov said Russia could build the turbines at a factory near St. Petersburg. But American officials said the plant would have to be retooled first.

The cancellation of the turbine project will mean $45 million in lost sales, according to Ukraine's president, Leonid Kuchma. But in return, Ukraine will be able to buy nuclear fuel from the United States. American officials said that they will help Turboatom find business in the West.

Ukraine is also the third-largest recipient of American foreign aid. It receives $225 million a year. And Ukraine may also profit from new investment and the launching of American payloads in its commercial space launchers.

Under the new agreement, American companies, such as Westinghouse will be able to bid on a $1.2-billion contract to complete two, unfinished Soviet-era reactors.

Ukraine had told Israel it would not allow Turboatom to participate in the Russian project, a pledge the Israelis publicized. But local pressure for jobs made Ukraine waver. The new American-Ukraine accord solidifies the understanding.

Russian officials complained that Washington was applying a double standard in trying to block Russia's reactor deals.

"What the Americans are trying to do is really surprising," Kaurov said. "If America could sumit evidence that Iran will not allow international inspections there could be grounds for discussion. But the fact is the United States just does not like Iran."