Russia and the Bushehr Nuclear Power Plant

On September 16, 2007, Iranian Foreign Minister Manouchehr Mottaki announced the completion of the Bushehr Nuclear Power Plant, adding that it was “sealed by the UN nuclear watchdog, International Atomic Energy Agency (IAEA)”. On September 20, Reza Aqazadeh, the head of Iran’s Atomic Energy Organization, in reference to his talks with Sergei Kiriyenko, the director of Russia’s Federal Atomic Energy Agency in Vienna, said that they “discussed the pending issues of the Bushehr Nuclear Power Plant”. Commenting on the earlier statement of Manouchehr Mottaki, Aqazadeh noted that what the former said was that “the nuclear fuel is ready, but sealing by IAEA has not taken place”. Such contradictory statements have had the effect of furthering existing speculation over the status of the Bushehr Nuclear Power Plant.

Work on the Bushehr Plant was started in 1974 by the German firm Siemens as part of the nuclear programme initiated by the Shah, but was suspended after the Islamic Revolution of 1979. The facility was affected by bombings during the Iran-Iraq war of 1980-88. The project was sought to be revived in January 1995, when Tehran signed a US $800 million contract with Russia for the completion of a 1000 Mw pressurized light-water reactor within four and half years. The Russian firm Atomstroiexport started construction work in the same year, though progress proved to be slow.

Russia signed a further agreement worth $1 billion with Iran on December 25, 2002 to speed up work and promised to finish construction by the end of 2003. In March 2003, Iran declared that about 70 per cent of the Bushehr plant has been completed and that the reactor was expected to be fully functional by March 2004. However, the deadline for completion was subsequently postponed due to US pressures on Russia and also because of ‘technical difficulties’. Russia, for instance, placed new conditions on supplying nuclear fuel for the plant, stipulating that Iran must clear up questions over ‘possible military atomic development’ and that Tehran should delay sourcing parts for the plant from third countries.

In February 2005, Russia also signed a $800 million deal with Iran to supply Bushehr with nuclear fuel, while at the same time reassuring the world that the fuel would be returned to Russia after use and could not therefore be diverted for weapons purposes.

On September 7, 2007, Iranian chief nuclear negotiator Ali Larijani declared that “good agreements” had been reached with Moscow for the completion of the Bushehr plant without giving details of the time plot. But a spokeswoman for Atomstroiexport said that “The negotiations are still under way and we do not yet have results from that; so I am not confirming this information.” A Russian sub-contractor stated recently that there was no chance of completing the plant before the fall of 2008, and that nuclear fuel would have to arrive at the plant six months before the reactor could start to function.

For his part, Foreign Minister Mottaki had said in September 2007 that Iran has won assurances from Russia that the plant would be completed soon and that the issue would be raised when Russian President Vladimir Putin visited Tehran to attend a summit of the Caspian littoral states. Putin, who visited Tehran on October 16, said that “delay in the completion of Bushehr Nuclear Power Plant is not politically motivated and Russia is serious about finishing the job as soon as possible, but there are minor issues that should first be resolved.” He further added that “we have signed an agreement with Iran that the nuclear fuel should be returned to Russia which is on top of the agenda of meetings between experts of the two sides.” According to the agreement on supply of nuclear fuel, Russia was expected to deliver a total of 90 tons for the Bushehr plant by March 2007 and complete the construction of the plant by September of the same year.

Since the first agreement was signed between Iran and Russia in 1995, construction work seems to have gone at a rather slow place. Russia attributes this to Iran not fulfilling its payment obligations, though the more important reason could be an unwillingness to polarise world opinion on the issue. Moscow has in fact provoked harsh condemnation for its involvement in Iran’s nuclear efforts especially from the United States. But it has contended that mutually beneficial cooperation in the energy sector is in tune with its long-term goals. It also feels that the US is seeking to squeeze it out of Iran. American efforts to pressurise Moscow on Iran’s nuclear programme have met with defiance from Russian Foreign Minister Sergei Lavrov, who openly declared on October 16, 2005 that “no country will ever force Russia to abandon its nuclear commitment to Tehran.” Lavrov contended that Iran had the same rights as other countries to develop “peaceful nuclear energy” and reaffirmed Moscow’s intention to continue helping Iran build a nuclear reactor at Bushehr. “No one,” Lavrov added, “including the United States, will challenge our right to continue building the atomic electricity station in Bushehr.” Iran, for its part, has claimed that being a member of the International Atomic Energy Agency (IAEA) and a signatory to the Non-Proliferation Treaty (NPT), nobody should deny it the right to use nuclear technology and energy for scientific and peaceful purposes. Both Russia and Iran have pointed out that the plant and its facilities would be under IAEA supervision.

Russia seems to be playing a long term game to protect its interests in the region. It is seeking to export its own oil and gas through Iran. It can also be seen that Russian authorities want to have substantial stakes in guiding the outward flow of Iran’s energy supplies. Moscow is particularly concerned about the prospect of a new pipeline that could potentially carry as much as 706 billion cubic feet of Iranian gas to Ukraine each year, which might eventually reach European markets. The Kremlin regards Iran as an important transit point for crude oil across the Caspian Sea. This has led the two countries to work out a series of ‘swap’ arrangements whereby Caspian oil is moved into Iran and then sent to northern Iraqi refineries while equivalent amounts are then exported from terminals on Iran’s Persian Gulf coast.

Analysts believe that the Kremlin is using Bushehr as a bargaining chip in a wider regional strategic perspective to check the influence of the United States. There is also some speculation that Russia is delaying completion of the plant because it does not fully trust hard-line Iranian President Mahmoud Ahmadinejad, and fears an international backlash if it delivers nuclear fuel. Putin’s remarks in Tehran a few days back on nuclear co-operation with Iran is telling evidence that the last page of the story about the Bushehr Nuclear Power Plant is yet to be written.