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Russia says Bushehr NPP project unprofitable, talks in question

RIA Novosti

25/05/2007 12:03 MOSCOW, May 25 (RIA Novosti) - The construction of the Bushehr nuclear power plant in the south of Iran has become unprofitable for Russia and the planned talks on the project financing could be cancelled, a source in the Russian Nuclear Power Agency said Friday.

The $1-billion project, implemented under the supervision of the UN nuclear watchdog, was threatened with suspension after the Russian contractor, Atomstroyexport, said in February that Tehran had only covered 60% of the required funding by the fourth quarter of 2006, and had completely stopped payment in mid-January.

"It seems that the Iranians have lost interest in the project," the source said. "There are no concrete steps [in financing] on their part."

He said Tehran had paid only $20 million since the beginning of the year, although the contract stipulates $25 million monthly payments to complete the project on schedule.

"The project has become unprofitable for us," the source said, adding that the completion of the plant now depends entirely on the Iranian side, and that the key remaining issue is the guaranteed financing for its construction.

"We will continue working under the contract as long as we receive financing...and we will supply fuel six month prior to the physical launch, as stipulated in the contract," the source added.

Atomstroyexport is building Bushehr, Iran's first nuclear power plant, under a 1995 agreement in the south of the Islamic Republic, which has been in the focus of international attention over its controversial nuclear research program. Western nations and Israel suspect Tehran of concealing a weapons program, but Iran says it needs to enrich uranium for energy.

The source said Sergei Shmatko, Atomstroyexport's head, could cancel his visit to Iran in late May for lack of Iranian funds in the Bushehr NPP project.

"It is possible that the head of Atomstroyexport will not go there [to Iran], because there is no point," the source said. "What is there to discuss, if they [the Iranians] are not paying?"

"If they pay, we will finish the construction," he said.

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