#15 - RW 273
Moscow Times
September 11, 2003
Iranian Demand Holds Up Bushehr
By Simon Saradzhyan
Staff Writer

Tehran has made an unexpected and unacceptable demand that could derail Russian-Iranian cooperation on the Bushehr nuclear plant, a senior Nuclear Power Ministry official said Wednesday.

To address concerns that Iran is secretly developing nuclear weapons, Russia has said it will freeze construction on the $1 billion plant and will refuse to supply fuel unless Iran agrees to return all of the spent fuel. Both sides in recent weeks have said that an agreement was close to being signed.

On Wednesday, however, Deputy Nuclear Power Minister Valery Govorukhin said Iran is now demanding that Russia pay for the spent fuel, Itar-Tass reported. Usually it is the other way around; countries get paid for receiving and storing spent fuel, he said.

Govorukhin chose to go public with Iran's demand as the board of directors of the International Atomic Energy Agency in Vienna debated a U.S.-backed resolution that would find Iran in noncompliance of the Nuclear Nonproliferation Treaty, which it has signed.

The draft resolution -- put forward by the United States, Britain, France and Germany -- gives Iran until the end of October to prove that it is not pursuing a nuclear weapons program. If Iran fails to meet the deadline, the IAEA would refer the issue to the Security Council, which would vote on whether to slap sanctions on Tehran.

The IAEA board was expected to vote late Wednesday or Thursday, a spokeswoman said by telephone from Vienna.

Iran maintains that its nuclear program is designed solely for generating electricity, but it has avoided signing an additional protocol to the Nuclear Nonproliferation Treaty that would allow for comprehensive IAEA inspections of its nuclear facilities without notice.

Govorukhin insisted the dispute was commercial and said both sides have agreed to start talks, Itar-Tass reported. Should Iran refuse to withdraw its demand, Russia would have to charge Iran a higher price to include the cost of buying it back, he said.

Alexander Pikayev, a security expert with the Carnegie Moscow Center, said Iran might have concluded that it can produce fuel compatible with the Russian-made reactor itself -- and, thus, be deliberately making unrealistic demands in order to disrupt the deal altogether. If Iran used its own fuel in the power plant's reactors, it could then enrich the spent fuel to weapons-grade using one of the centrifuges that it possesses.

The IAEA has recently said that its inspectors found residue of highly enriched uranium on gas centrifuges at a nuclear facility in Natanz, about 300 kilometers south of Tehran, during an inspection in February. Iran said it imported the centrifuges and that they were "contaminated" with enriched uranium by a previous owner.

The decision to publicize Iran's demand during the IAEA debates may be an attempt to create international pressure on Iran to drop its demand and sign the agreement on the return of spent fuel, Pikayev and Ivan Safranchuk of the Center for Defense Information said.

Moreover, Pikayev said, it may be a sign that Moscow has decided to end its lucrative nuclear cooperation with Tehran altogether because of its own security concerns.

The Nuclear Power Ministry may have decided that it is time "to wash their hands" of Iran rather than continue cooperation with a country that avoids making its nuclear program fully transparent and draws constant fire from the United States, Pikayev said.

Safranchuk, however, said he believes the ministry will complete the reactor unless Iran refuses to sign the fuel-return agreement.

Earlier this month, the ministry said Iran had already reviewed a draft of the agreement and was ready to sign it. Officials said the agreement would be signed as soon as Russian government agencies finished reviewing it.

Govorukhin himself said in late August that the ministry intended to sign it within a month. Ministry officials said Russia should complete construction of the first reactor at the Bushehr plant in 2005 but may send the first batch of nuclear fuel to Iran as soon as this year.

During a visit to Moscow in July, Iranian atomic chief Gholamreza Aghazadeh said he hoped the agreement would be signed soon.

"There are no vague points about the return of spent nuclear fuel," he said.

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