WASHINGTON (AP) - A program to help Russia safeguard its nuclear materials is facing deep budget cuts by the Bush administration, although a bipartisan commission recently called these efforts essential to protecting U.S. national security.
President Bush's proposed fiscal 2002 budget, now being put together, would cut spending for Russia nuclear nonproliferation activities by more than $72 million, government and private sources who have seen the numbers said Thursday.
The Energy Department had planned to increase the program, which the Clinton administration had earmarked for a 50 percent increase to $1.2 billion for the fiscal year that will begin Oct. 1.
The final funding levels will be set in Congress, where some lawmakers already were expressing concern.
"Dramatic cuts to these programs ... may cripple our efforts to secure nuclear material in Russia and ensure that Russia's nuclear physicists are gainfully employed in non-defense related industries," Rep. Ellen Tauscher, D-Calif., wrote to Condoleezza Rice, the president's national security adviser.
Tauscher is a member of the House Armed Services Committee.
The cuts were ordered by the White House, despite several attempts by Energy Secretary Spence Abraham to obtain more money, said the sources, who spoke on condition of anonymity.
In January, a bipartisan commission issued a report calling the risk of theft of Russian nuclear materials "the most urgent unmet national security threat" facing the United States and urged sharp increases in spending for the Russia nonproliferation programs.
The Energy Department initiatives targeted by budget cutters include programs aimed at enhancing security at Russia's nuclear weapons facilities, providing help to economically strapped Russian nuclear scientists and helping Russia convert weapons-grade plutonium to less threatening materials.
While changes may still be made in the funding levels before President Bush sends his final fiscal 2002 budget to Congress, several attempts by the department to get additional money have been rebuffed by the White House Office of Management and Budget, the sources said.
"This budget signals a retreat from a decade worth of work with Russia to secure nuclear weapons expertise and materials," said William Hoehn of the Russian American Nuclear Security Advisory Council, a nonproliferation advocacy group.
According to the latest DOE budget document, programs to increase security at Russia nuclear facilities would be cut by $31 million to about $170 million. The Energy Department had sought an increase to $225 million.
A program aimed at finding jobs and getting economic assistance to Russian nuclear scientists would be cut by $20 million to about $7 million, according to the sources.
Bush will ask for more money to dispose of Russia's excess plutonium stocks, but the amount falls far short of the proposed doubling of the $226 million program that the Clinton administration had proposed, the sources said.
The bipartisan commission included experts in nuclear nonproliferation and national security and was chaired by former GOP Senate Majority Leader Howard Baker and former Democratic White House counsel Lloyd Cutler.
Others on the panel included Former Sen. Sam Nunn of Georgia and former Rep. Lee Hamilton, both Democrats and widely respected experts on national security and nuclear nonproliferation.
Their report, requested by the Energy Department, concluded that the risks of Russian nuclear materials being obtained by terrorists or hostile states is significant and real.
The report urged stepped up spending for programs to help Russia safeguard these materials and help Russia's atomic scientists, some of whom are facing dire economic times in the post-Cold War era, find jobs.
It said $30 billion is needed over the next 10 years to do the job, adding that such spending would be a prudent investment in U.S. and world security. return to menu
B. Russian-Iranian Relations
1. House Wants Bush To Weigh Aid Cutoff
The Associated Press
March 15, 2001
(for personal use only)
WASHINGTON (AP) -- More than two dozen House members urged President Bush to consider suspending U.S. aid to Russia for its decision to resume weapons sales to Iran.
The House members, headed by Rep. Joseph M. Hoeffel, D-Pa., cited in a letter a law that authorizes a cutoff to governments that help terrorist states. The State Department yearly brands Iran as a supporter of terrorism.
U.S. aid to Russia this year amounts to more than $1 billion. Included are $386 million to dismantle nuclear weapons under treaties with the United States. $384 million for safeguarding stockpiles, and $187 million for democratic institutions.
Hoeffel said in an interview Thursday that he was alarmed by the announcement of the arms deal in Moscow this week. "Iran is a terrorist state, and strengthening their military is a security threat to the United States and U.S. allies such as Israel," he said.
State Department spokesman Richard Boucher said Tuesday that if Russia sells advanced weapons or technology to Iran, "the provisions of U. S. law would come into play." Under sanctions against Iran that former President Clinton put into effect in 1995, the United States acted against seven Russian companies and three institutes in 1999 that it accused of aiding Iran's nuclear efforts.
On Wednesday, President Bush renewed the Clinton's 1995 emergency declaration that ruled out many forms of trading with Iran. In his action, Bush said Iran's Islamic government continues to sponsor terrorism, to work against the Middle East peace process and to acquire "weapons of mass destruction and the means to deliver them."
Hoeffel said he was unaware that a new arms agreement loomed between Russia and Iran when he visited Moscow two weeks ago but complained to members of the Russian legislature about past arms sales and continuing technology transfers.
The Duma members defended the sales on economic grounds, saying Russia needed the money, Hoeffel said.
"What I would like to see Bush do is to tell them in no uncertain terms that the more than $1 billion in aid is threatened by this, and we are prepared to stop the assistance unless we can come to some understanding," Hoeffel said.
"If they want help with debt relief, that's something we ought to look at," he said. "If they need more aid, that's something we ought to consider."
Hoeffel said the United States should have a closer relationship with Russia, not a distant one, "but part of the deal is they can't be selling weapons to terrorist states."
In Washington for talks Wednesday, Sergei Ivanov, national security adviser to Russian President Vladimir Putin, defended the arms agreement.
He said only defensive weapons, such as personnel carriers, tanks and anti-aircraft missiles, would be sold to Iran. Ivanov said the deal was "very legitimate."
He met in Washington with Secretary of State Colin Powell and Condoleezza Rice, Bush's security adviser. return to menu
2. Text of Ackerman/Hueffel Letter
March 16, 2001
(for personal use only)
Dear Mr. President:
We are writing to express our serious concern regarding the arms transfer compact agreed to by Russia and Iran on March 12, 2001.
According to press reports, Russia has agreed to enter into new contracts for substantial amounts of weaponry and military technologies with Iran. Although details have not yet been released, Russian officials have indicated that sophisticated missile systems, aircraft and helicopters will be included in the equipment supplied to Iran. In advance of Mr. Khatami's visit, Iran's Ambassador to Moscow indicated that Iran might buy as much as $7 billion worth of military equipment from Russia in the next several years.
This new compact is significant in that it represents a clear renunciation of the 1995 Gore-Chernomyrdin agreement limiting Russian conventional arms sales to Iran. After announcing its intentions to disregard this agreement as of December 1, 2000, this is Russia's first public act in contravention of the agreement. We believe this act warrants the immediate attention of the United States and requires appropriate, significant action.
Furthermore, we request that when contemplating future responses to Russia's intention to sell military equipment to Iran, your Administration consider Congressional intent as expressed in the Anti-Terrorism and Effective Death Penalty Act of 1996 (Public Law 104-132). Specifically, we believe that Russian arms sales to Iran should be monitored with two particular provisions of this law in mind.
We believe a potentially appropriate remedy lies in Section 620G of the Foreign Assistance Act (FAA) as amended by P.L. 104-132, which authorizes the President to withhold assistance "to the government of any country that provides assistance to the government of any other country" that has been deemed a terrorist state by the Secretary of State. Additionally, Section 620H of the FAA as amended by P.L. 104-132 expressly prohibits assistance to countries that "provide lethal military equipment to terrorist states." As you are aware, Iran has been on the U.S. terrorism list since January 1984, and the State Department has listed Iran as the most active state sponsor of international terrorism in its April 2000 Patterns of Global Terrorism report.
The strategic implications of Russia's arms transfers to Iran can not be underestimated. Russia's recent actions should stimulate intense scrutiny by the United States, and while we recognize the waiver authority granted in this law, we urge you to act swiftly and appropriately.
We thank you for your continued willingness to closely monitor this situation, and we look forward to working with you in developing a fair and effective policy to combat the continued acquisition of weapons by Iran. return to menu
3. Russians Question Wisdom of Their Coziness With Iran
Patrick E. Tyler
The New York Times
March 16, 2001
(for personal use only)
MOSCOW, March 15 - President Vladimir V. Putin is deep in the Siberian taiga - either skiing or hunting wolves, the Kremlin will not say for sure - but here in the capital there is no vacation from the political debate that Russia's blossoming relationship with Iran has touched off.
A state visit this week by the Iranian president, Mohammad Khatami, the first of its kind since the Iranian revolution, has not only set off alarms in the Bush administration over Moscow's determination to sell arms and nuclear technology to Tehran. It has also caused prominent Russians to question the prudence of developing warmer relations with a country believed to be supporting terrorism.
"The patron of international terrorism has been promised increased sales of arms and broader cooperation in the nuclear energy field," the newspaper Sevodnya said on Wednesday, summing up the visit, which it said had "lived up to Washington's worst expectations." Mr. Putin met with the Iranian leader on Monday and then left for his four-day vacation.
"The Khatami presidency is a liberal facade for the fundamentalist regime," Izvestia said after the visit, under a headline "Dangerous Deal." The real power in Iran, the newspaper warned on Wednesday, "is held not by the liberal Khatami but by the ayatollahs, who take quite a different view of the country's future and its relationship with the outside world." Mr. Putin should not be surprised, the paper warned further, if in 5 to 10 years' time, "a group of Islamic terrorists or separatists armed with military hardware which Moscow had just sent to Tehran" show up in Russia or on its borders.
The domestic debate over Mr. Putin's rush to capture the Iranian market for Russia's beleaguered arms and energy industries is not yet as intense as the American reaction to it - indeed, many Russians support closer ties with Iran. But a sense of danger is growing here, based in part on the fear that Iran's moderates will once again lose power, putting Russian weapons in the hands of hard-liners who might point them at Central Asia or use them to incite Russia's Muslim population. The conflict in Chechnya has intensified this concern.
The sense of danger is also based on the fear that Russia's relations with Washington will only degenerate further as the Bush administration presses Iran over its support for terrorism and its efforts to develop long-range ballistic missiles and weapons of mass destruction.
"Russia today has a major problem of image deterioration," said Andrei V. Kozyrev, foreign minister under President Boris N. Yeltsin. "We are losing in terms of these demonizing clichés, that every Russian businessman is a thief," or that "Russia is reverting to the old Soviet style of anti-Western behavior."
He added, "This reality requires that we in government, Parliament and business should understand that we have an image problem that should be addressed and that requires a cautious approach in foreign policy." He pointed out that while Russia has no other choice but to do business with Iran, it should do so in a manner that addresses Western concerns about the spread of dangerous weapons technologies.
"I would be extremely cautious in doing any weapons business with Iran since that would put Russia on particularly thin ice," Mr. Kozyrev said.
Nonetheless, Mr. Putin's policy on Iran does have its supporters.
"I think that Russia, the United States and the European Union have a very big stake in the future of Iran and we need many channels of communication," said Andrei A. Kokoshin, national security adviser under Mr. Yeltsin. He characterized Mr. Khatami's visit as "an opportunity for the involvement of Iran in world political affairs and world economic affairs that could provide an alternative to the policies of the conservatives in Iran."
Mr. Kokoshin said he hoped that the United States and Russia could collaborate in drawing Iran out of its isolation. He also rejected the notion that the sale of conventional Russian weapons was a significant factor in Moscow's relations with Tehran.
Even some of Moscow's most pro- Western liberals favor selling arms to Iran, up to a point.
In January, Grigory V. Yavlinsky, who heads the liberal Yabloko Party, wrote an open letter that he thought Mr. Putin should send to President Bush.
In it, Mr. Yavlinsky said Iran represented a "very important arms market for Russia," adding: "Such trade does not threaten our security. We do not intend to make concessions on this issue. This is a very important source of revenue, and the possibility of developing technology.
"I understand that some contracts may cause significant concern in the region. That's why I propose to discuss the commercial and political aspects of this issue."
It is not known whether Mr. Putin has taken Mr. Yavlinsky's advice and conveyed these sentiments to Mr. Bush, but the Russian leader chose this week to send his closest adviser on national security affairs, Sergei B. Ivanov, to Washington. In meetings at the White House and State Department, Mr. Ivanov was expected to try to convince Mr. Bush's aides that Russia is as concerned about the potential danger from Iran as anyone.
Mr. Ivanov likes to say that Russians live much closer to Iran than anyone in the West and therefore Moscow has no interest in assisting Iran's ballistic missile program or its secret efforts to develop nuclear weapons. He also likes to point out that the nuclear power plant that Russia is providing Iran at Bushehr on the Persian Gulf coast is almost identical to a nuclear plant that the United States and South Korea are building in North Korea. He does fail to mention, though, that Washington has hinged the deal on North Korea's agreement to abandon any attempt to develop nuclear weapons.
Iran has essentially made this commitment by signing the Nuclear Nonproliferation Treaty. It has also given the International Atomic Energy Agency the right to supervise and inspect the Bushehr power plant. On a site abandoned by Germany in 1979, the plant is now home to 1,200 Russian engineers and technicians who are working to complete the first phase by 2004.
Washington suspects that Iran is conducting secret nuclear weapons research and remains concerned that Russian assistance at Bushehr will enhance Iran's knowledge and capacities in the nuclear weapons field.
After Mr. Ivanov left for Washington, his colleague, Igor S. Ivanov, the foreign minister, said on Wednesday that Russia would sell arms to Iran "within the limits that are required for ensuring the defensive capability of Iran and that will not hurt third countries or regional stability." And, in one of the most private meetings of the week, the Russian and Iranian defense ministers met on Wednesday to discuss "joint efforts against international terrorism and extremism and questions related to the strengthening of the nonproliferation of weapons of mass destruction, their delivery vehicles and missile technologies," according to a report by the Interfax news agency.
Meanwhile, Mr. Khatami, obviously pleased to be in the Russian limelight, took advantage of the platform his visit had afforded him to praise Mr. Putin's government for resisting other governments' "attempts to interfere with cooperation between our two countries, particularly in the peaceful use of nuclear energy."
After his speech, Mr. Khatami left Moscow for St. Petersburg, where today he inspected the nuclear reactor that will be shipped to Iran later this year. Yevgeny Sergeyev, general director of the Izhorskiye machine works said the completion date for the first reactor unit at Bushehr had been set for 2002, but has now slipped to early 2004. He did not give a reason for the delay, but announced that Mr. Khatami confirmed during the visit today that "as soon as the equipment for the first reactor leaves the factory, a contract for a second reactor will be signed."
Mr. Khatami was due to make one more stop in Russia, at Kazan, capital of the autonomous Tatarstan Republic, whose population is largely Muslim. return to menu
4. U.S. Mutes Criticism of Russia's Plans for Arms Sales to Iran
The New York Times
March 15, 2001
(for personal use only)
WASHINGTON, March 14 - The Bush administration took a muted public approach today to Russia's decision to resume sales of conventional arms to Iran, using the arrival of Moscow's senior national security official to express concerns that fell short of sharp criticism.
Secretary of State Colin L. Powell said that the United States had to be "candid with the Russians" in telling them that they should not be "investing in weapons sales in countries such as Iran which have no future."
During the visit to Moscow on Monday of the Iranian president, Mohammad Khatami, the Russian government announced that it would resume sales of conventional arms to Iran and repeated its intention to help Iran complete a long-stalled nuclear power plant. Air-defense missile systems and up-to-date aircraft are reported to be among the items in the Russian package to Iran.
Russia's arms sales to Iran have long been a sore point between Washington and Moscow. Republicans in Congress were particularly critical of the Clinton administration, accusing it of not being tough enough on Russia for its sales of military hardware to Iran.
General Powell spoke just before he met with Sergei B. Ivanov, who heads President Vladimir V. Putin's security council and is described as the second most powerful official in Russia.
Mr. Ivanov also met for the first time with President Bush's national security adviser, Condoleezza Rice, who was his host during the visit here. Some unflattering remarks Ms. Rice made about Russia before taking office have been posted on a Kremlin-backed Internet site. For her part, Ms. Rice has said she will not concentrate on the relationship with Russia as much as the Clinton administration had. Before today's encounter, the National Security Council went out of its way to note that Ms. Rice had met with her counterparts from Britain, France and Germany before inviting Mr. Ivanov here.
Ms. Rice said nothing publicly about her two-and-a-half-hour meeting with Mr. Ivanov, and her aides gave only a scanty account of the topics discussed.
Today, unlike during the Clinton era, Mr. Ivanov did not ask for economic assistance, officials said. The Bush administration has said publicly that the international financial institutions were too generous to the Russian economy in the past.
In the brief account of the Rice- Ivanov meeting, a National Security Council press assistant, Mary Ellen Countryman, declined to say whether they discussed the case of Robert Hanssen, the F.B.I. agent who was arrested last month on charges of spying for Russia. The Hanssen matter was discussed by General Powell and Mr. Ivanov, a senior State Department official said.
On Iraq, the secretary said that the United States would be looking for Moscow's support at the United Nations in its efforts to streamline the sanctions, the official said.
Overall, General Powell said that the new administration would adopt an approach to Russia not unlike that toward the Soviet Union by the Reagan administration. He called it "realism."
"In some way, the approach to Russia shouldn't be terribly different than the very realistic approach we had to the old Soviet Union in the late 80's," he said. "We told them what bothered us. We told them where we could engage on things. We tried to convince them of the power of our values and our system. They argued back. We should be realistic and keep encouraging them to move in the direction of solid democracy." return to menu
5. How Iran Outplayed Russia
The Moscow Times
March 15, 2001
(for personal use only)
Last fall Moscow scrapped a secret memorandum signed in 1995 by then-Prime Minister Viktor Chernomyrdin and U.S. Vice President Al Gore and announced that it was resuming unrestricted arms sales to Iran. Since then Washington has been trying to force Moscow to reconsider and not sell modern equipment to a regime that the United States considers to be a "state of concern."
For the last several months U.S. diplomats have been passing the same message: Do not sell weapons to Iran if you want friendly relations with us. Period.
But all this pressure seems to have come to nothing: During a visit to Moscow by Iranian President Mohammad Khatami this week, President Vladimir Putin publicly iterated Moscow's determination to proceed with sales.
Iran's ambassador to Moscow, Mehdi Safari, told reporters last month that Iran may purchase up to $7 billion worth of Russian arms over the next few years. At first glance, this figure may seem extravagant, but in fact it is close to the actual value of Russian weapons sales to Iran in the early 1990s.
According to official Russian reports, Russia sold Iran over $5 billion worth of defense hardware - including 1000 T-72C tanks and 1,500 BMP-2 armored vehicles (most of the armor was assembled in Iran under license using Russian parts) - between 1990 and 1996. Iran also acquired 24 MiG-29 fighters as part of a program to assemble an additional 126 MiG-29 in Iran. The MiG-29 license contract was agreed by both sides, but was never signed because of pressure from Washington.
In the 1990s, Iran also got the long-range (over 300-kilometer) S-200 strategic air-defense system, three Kilo-class submarines and other weapons. Now Iran wants to supplement this equipment with S-300 air-defense missiles and modern naval weapons. Iran wants to buy advanced propelled-warhead naval mines, including those equipped with a Shkval high-speed underwater rocket. It is also seeking new torpedoes for its Kilo subs, including the Shkval, and advanced anti-ship missiles. Furthermore, Iran wants to re-equip its air force with new fighters and bombers, but it is not clear whether Tehran will resurrect the MiG-29 deal or opt to buy Su-27/Su-30 airplanes as China did.
During the 1990s, Iran paid only $1 billion in cash for the arms and military technology it purchased. The rest was settled in write-offs of outstanding Soviet debts to Iran and in various barter deals, mostly Iranian oil handed over to Russia for resale. Today Iran could certainly buy $7 billion worth of Russian weapons if Moscow is willing to accept barter deals or other surrogates. If Russia insists on cash, the Iranian arms buy will be much smaller. In any case, Tehran has already - without even spending a penny - achieved a major strategic goal: Its offer to buy has given it leverage that could effectively shift Russian foreign policy.
Since the demise of the Soviet Union, Iran has opposed the division of the Caspian Sea shelf since its share would be only 13 percent in the southern, deep-water part of the sea - a region with no major proven gas or oil deposits. Initially Moscow agreed with Iran, but after oil was discovered in the Russian sector, Moscow began to favor a division.
But this week Putin and Khatami agreed that Iran and Russia would not recognize any national borders in the Caspian until all Caspian nations sign an agreement. This Russian foreign-policy U-turn means that the legal status of all drilling concessions granted to oil companies in the Caspian is now dubious, and investments into oil/gas production are highly risky - including those made by Russia's LUKoil.
Military-industrial lobbyists are obviously more powerful in the Kremlin now than in the 1990s. Acting in tandem with these lobbyists helped the Iranians put Russia on a collision course with Washington and, at the same time, slow the production of Caspian oil that would compete on the world market with Iranian crude.
The Kremlin apparently believes that arms sales to Iran, China and India not only bring revenues and support Russia's defense industry, but also help create a "multi-polar world" in which American influence is diminished. In fact, the Kremlin is only giving a pretext to impose sanctions on Russia that will block any effort to truly reform this nation.
Pavel Felgenhauer is an independent, Moscow-based defense analyst. return to menu
6. Iran Chief Visits Russia Nuke Plant
The Associated Press
March 15, 2001
(for personal use only)
ST. PETERSBURG, Russia (AP) - The president of Iran on Thursday toured a Russian factory that makes nuclear reactors, amid U.S. protests that the plant is helping Iran develop nuclear technology.
Dressed in flowing robes, President Mohammad Khatami visited the Izhora factory in St. Petersburg, trailed by aides and Russian officials. He stopped to admire workers polishing a huge, cylindrical reactor core for Iran's Bushehr nuclear power plant.
The core will be shipped to Iran in the third quarter of this year, state-controlled ORT television news said. Khatami told plant directors Iran will sign a contract for a second reactor core once the first is delivered, ORT reported.
Russia signed a contract in 1995 to build the first reactor at Iran's Bushehr power plant. It is to be completed by 2003 for an estimated $800 million. The United States has strongly objected to the project, fearing the technology could be used to develop nuclear weapons. Moscow and Tehran maintain the plant will be used only to provide energy and will remain under international control.
In the past, Washington has imposed sanctions against Russian companies accused of providing missile technology to Iran.
Earlier this week, Khatami and the Iranian delegation toured Russian space mission control in Korolyov outside Moscow, and expressed interest in buying both military and civilian aerospace technology.
Khatami flew to the central Russian city of Kazan on Thursday to visit a mosque under construction there, ORT reported. Kazan is the capital of Tatarstan, a mostly Muslim region east of Moscow. return to menu
7. Iran to Sign Second Reactor Deal With Russia
March 15, 2001
(for personal use only)
SAINT PETERSBURG, Mar 15, 2001 -- (Reuters) A Russian official said on Thursday that Iran will sign up for a second Russian-built nuclear reactor once the delayed first one, which has already sparked U.S. worries, has been completed.
Russia is helping Iran build a nuclear power plant at the Gulf port of Bushehr. Iran says it is for civil use, but the United States has worried it might help the Islamic Republic, which it dubs a "rogue state", develop nuclear weapons.
"In principle, he (Iranian President Mohammed Khatami) confirmed that as soon as the equipment for the first reactor leaves the factory, a contract for a second reactor will be signed," Yevgeny Sergeyev, the general director of the Izhorskiye Zavody plant, told journalists.
Khatami, on a visit to Russia, visited the plant in St Petersburg and met Sergeyev.
The plant is making basic equipment for the first reactor, which it plans to deliver in the third quarter of 2001.
Sergeyev said the first reactor had originally been scheduled for completion by the end of 2002, but had now been put back to late 2003 or early 2004. Russia and Iran have been in talks before over the construction of a second reactor.
Dressed in traditional Muslim cleric's robes, Khatami toured the factory floor while Sergeyev explained the manufacturing process to him.
Iran and Russia signed an $800 million deal for the first nuclear power plant's construction in the mid-1990s, but it has since been subject to delays.
Last week, the deputy head of Iran's Atomic Energy Organization, Assadollah Sabouri, was quoted on state television as criticizing Russian contractors for the hold-ups.
Sabouri said the first unit, a 1,000 megawatt power station, was "about 50 percent completed" and its main equipment would be installed during the next Iranian year, which begins March 21.
The total construction cost of one reactor is between $800 million and one billion.
NUCLEAR PLANTS, ARMS IRRITATE U.S.
The United States has put pressure on Russia to abandon the nuclear power plant project as it sees Iran as one of the "rogue states" that it says threaten world stability. It also puts North Korea and Libya in this class.
It has also urged Russia to drop plans to resume supplying conventional weapons to Iran, although Russian President Vladimir Putin told Khatami earlier this week that Moscow was ready to go ahead with the arms sales.
Tehran and Moscow insist the nuclear cooperation is of a strictly civilian nature. They say arms will be defensive and the sale does not violate Russia's international treaty obligations.
Sergeyev said Khatami was dissatisfied with the nuclear plant construction delays, but added that the hold-ups were not connected with his factory.
He said the deal for manufacturing equipment for a second reactor could be signed by the end of 2002 or the start of 2003.
After leaving St Petersburg, Khatami travels to Kazan in Russia's autonomous Tatarstan Republic where he will meet regional President Mintimer Shaimiyev and visit a mosque. Tatarstan is one of Russia's main Muslim provinces. return to menu
8. Russian support for Iranian nuclear program irks U.S.
The Associated Press
March 14, 2001
(for personal use only)
MOSCOW, Russia -- In a speech before Russia's parliament Wednesday, Iran's President Mohammad Khatami praised his country's ties with Moscow, and called on the countries to cooperate more in regional security, energy policy and trade.
Khatami, on the third day of a four-day official trip to Russia, thanked deputies for Russian help in building the Bushehr nuclear facility in Iran, a project vehemently opposed by the United States as a transfer of nuclear know-how to a country accused of sponsoring terrorism.
In the speech, Khatami did not mention U.S. objections to this project or Washington's protests over Russian arms sales and alleged transfers of missile technology to Iran.
But he asked Russia to "fully realize projects already under way and those where agreements have already been reached," according to a Russian text of the speech distributed by the Iranian Embassy in Moscow.
Khatami calls for closer Russia-Iran ties
Khatami told deputies he wished for closer ties with Russia in three main spheres: Cultural exchange, regional and industrial cooperation.
"Today, the Republic of Iran is considering questions of its responsibilities and national and regional obligations, based on a new approach and decisiveness," he said, according to the text.
Later Wednesday, Khatami flew to Russia's second city St. Petersburg, where he visited the Hermitage Museum. He was scheduled to visit the Izhora factory on the city's periphery on Thursday, where parts are made for the Busher plant. The factory makes reactor cores, steam turbines and other special equipment for nuclear reactors. A spokesman said the Iranian order is 90 percent complete and will be delivered by the end of this year.
Powell warns Russia
Secretary of State Colin Powell warned Wednesday that U.S.-Russia relations could be strained if Russia goes ahead with a decision to sell sensitive military and advanced conventional weapons to Iran.
"If Russia wants a better relationship with the United States and the West, and we think it is in their interest to want such a relationship, we have to be concerned when we see suggestions that they may be investing in weapon sales or accomplishing weapon sales with regimes such as Iran, and perhaps even programs that might allow Iran to develop the kinds of weapons that we think the world would not wish to see Iran have," he said.
After a meeting with Powell on Wednesday, Sergei Ivanov, Russia's national security advisor, said "there are no arms deal with Iran so far."
"We discussed the possible future contracts of conventional weapons being sold from Russia to Iran and they're all legitimate," he said.
Tuesday the State Department warned of "serious ramifications" if Russia sold the sensitive military technology and advanced conventional weapons to Iran.
State Department spokesman Richard Boucher said the consequences to the Russians for sensitive sales could be "either legal or policy-wise," depending on what type of "defensive weapons" Russia sold to Iran, or whether any contracts were already signed.
"Until we know what they're dealing with, we don't know what it may cause," Boucher said, adding "there are certain things which quite clearly would cause serious concern to the United States."
Powell said the key is to be candid with the Russians and tell them that an investment in regimes such as that in Iran, "which have no future, is not a worthwhile investment."
He suggested taking a "realistic approach" to the U.S. relationship with Russia and help Moscow with democratic and economic reform. Russia, he said, doesn't have the same "threatening face" that it presented at the end of the Cold War.
"We don't wish an enemy. We want a friend," he said. "But we understand the realism of the relationship as it exists today,"
Tuesday the White House extended a ban on trade with and investment in Iran.
In addition to Iran's nuclear capabilities and its proliferation of weapons of mass destruction, the United States also is concerned with Iran's sponsorship of terrorism and its opposition to the Middle East peace process. return to menu
9. Ivanov Dismisses U.S. Concerns Over Russian Arms Sales to Iran
Agence France Presse
March 15, 2001
(for personal use only)
WASHINGTON, Mar 15, 2001 -- (Agence France Presse) Russian national security advisor Sergei Ivanov on Wednesday dismissed U.S. concerns over his country's plans to sell arms to Iran, saying the deals would be legitimate and include only defensive weaponry.
Ivanov, speaking to reporters after meeting with Secretary of State Colin Powell, said he had explained Moscow's position on arms contracts it expects to sign with Tehran and denied fears the sales could prove destabilizing to the volatile Middle East.
"In fact, there are no arms deals with Iran so far, but we discussed the possible future contracts of conventional weapons being sold by Russia to Iran and they are all legitimate," Ivanov said, speaking in English.
"I expressed our position (which) in fact hasn't changed since last year or five years ago."
Ivanov, in Washington to see Powell and his U.S. counterpart Condoleezza Rice just days after Moscow sparked U.S. concerns by announcing it intended to boost military and nuclear cooperation with Tehran, said he did not understand the concerns of American officials.
"I don't know," he replied when asked his opinion about why the White House, Powell and other State Department officials had stepped up warnings to Moscow on the matter following Monday's announcement in Moscow.
"We are abiding with all international rules and Russian obligations to do with non-proliferation and we are very strict in verifying them and implementing them," Ivanov said outside the State Department.
"There are no new real facts or alleged facts that prove that Russia doesn't follow the rules," he said.
The United States has said sales of advanced conventional weapons and sensitive technology to Iran could have "serious ramifications."
Ivanov did not say whether the items Russia planned to sell to Iran would fall into that definition but said they could not be used to alter the balance of power in the Middle East.
"They are all defensive," he said, listing armored personnel carriers, tanks and anti-aircraft missiles as the types of arms Moscow would sell to Tehran.
Ivanov said these weapons were "very legitimate" and "not offensive."
10. U.S. Department of State Daily Briefing: Iran and Russia
The Washington File
March 13, 2001
(for personal use only)
MR. BOUCHER: Good afternoon, ladies and gentlemen. I don't have any statements or announcements, so I would be glad to take your questions. Mr. Schweid.
QUESTION: Would you mind taking another swing at how the Administration feels about the growing friendship between Russia and Iran? Is there anything ominous about it, so far as you know? Are these weapons -- do you see weapons sales that might pose a danger?
MR. BOUCHER: I don't think there is another swing to be had. I think we've been quite clear that our concerns are with sales of advanced conventional weaponry or sensitive technologies, assistance to programs like the nuclear area where Iran obviously has nuclear ambitions, and we don't think that cooperation with Iran in that sphere is well advised.
We have been quite clear in the past with Russia. We have not seen, at this juncture, any particular details or contracts or information coming out of this visit, but we would continue to be concerned about any sales of advanced conventional weapons or sensitive technologies, which we think are not only a problem, a security threat to the United States and other countries that have interests in the region, but in countries of the Persian Gulf, but also ultimately could harm Russia's interests as well.
Q: And you've told them about this, I suppose?
MR. BOUCHER: We've had a frequent discussion of this going back many years, as I think you know the whole history of these, going back to the early days after the Soviet Union, actually the late period of the Soviet Union as well.
Q: I'm sorry to introduce -- well, I'm not sorry, but I'm introducing a political element. You remember late in the campaign the Republicans rounded up mostly ex-Republican Secretaries of State, Defense Secretaries, et cetera, and complained about the Gore-Chernomyrdin arrangement, suggesting that Al Gore, the Vice President, wasn't, you know, on guard against Russia technology proliferation. And now it seems, by the face of it at least, at least as bad as it was before.
I don't know where I'm going with this question but -- (laughter) --
MR. BOUCHER: I don't either, actually.
Q: But it strikes me that you don't have a proper mechanism. You can't do Gore -- I mean, you can't do Cheney/whoever because the Administration criticized that arrangement so severely. What mechanism is there besides the usual diplomatic dialogue to try to keep a check on what the Russians are doing that are clearly not in the US's interest?
MR. BOUCHER: Well, I don't think you need to say what mechanism is there, apart from the regular diplomatic means that are available. That's like saying, you know, what mechanism, apart from cars, buses and trains, can you use to get to work in the morning? The fact is, we have the cars, buses and trains of the diplomatic business that we use all the time, and we will be taking up these issues with the Russians directly through our Embassy in Moscow, perhaps through their representatives here, and obviously through high-level visitors, and occasions when we meet with high-level Russians, such as a visit by Sergei Ivanov this week.
Q: (Inaudible) from Moscow, or we're waiting --
MR. BOUCHER: Not at this point. We don't have any more information. We haven't had the discussion --
Q: Are we just asking for information first? I mean, if we don't know what they're selling, we don't if we're --
MR. BOUCHER: Obviously, as I indicated yesterday, first and foremost, our interest is in finding out if there is any there, what the sales might be, what do they mean by selling defensive, in their view, weapons?
Our concern is, as I said, is with advanced conventional weapons; it is with sensitive technologies. So first and foremost, we would want to know what this involves, if it involves anything serious at all. But second of all, I'm sure in the course of those discussions, as we have in the past, we would make quite clear our views about how ill advised it is to sell advanced technologies to this region.
Q: Did Ivanov happen to mention this to the Secretary when they met in Cairo that --
MR. BOUCHER: I don't know that Ivanov mentioned anything. I think when the Secretary met with the Foreign Minister, Foreign Minister Ivanov in Cairo, he did raise the issue of Russia's sales to Iran and our concerns about that. So it has been an ongoing issue for us.
Q: Richard, can we move to something -- a related subject?
Q: Can we stay on this a bit?
Q: Two questions. One, would you be considering -- are you -- is the State Department at this point considering applying the 2000 Iran Nonproliferation Act sanctions or any of the other any laws that Congress has passed on this, considering that the Gore-Chernomyrdin Agreement actually said that we would enforce those penalties, based on their agreement not to set up new contracts? Well, here we are.
MR. BOUCHER: I think you have distorted a number of things. First of all, we will follow the law; we always follow the law. Second of all, the earlier agreement, as I understood it, did not -- those laws, as far as I understand them, have to do with the sale of advanced conventional weapons, and the early understandings were that Russia would not sell advanced conventional weapons, and that we made that determination at the time and stuck to it as long as Russia did not sell advanced conventional weapons. Obviously, if they did, the provisions of US law would come into play.
Q: And if I could follow up. Was this a complete shock to the State Department, considering that Foreign Minister Ivanov assured Secretary Albright at the time that there were no new contracts in the offing with Iran?
MR. BOUCHER: Once again, you are going back to December, when they abrogated the understanding, and at that point said that they didn't have any new contracts. Now, do they have new contracts now? We'll have to ask, we'll have to find out. It's not clear from the press reporting that they do.
Q: Just a quick one. Can you just confirm that you will bring this up with national security man Ivanov tomorrow?
MR. BOUCHER: I hesitate to go quite so far as to say a specific meeting at a specific time will involve a specific subject. I would say I would expect this to come up during the course of his visit here.
MR. BOUCHER: Just about.
Q: And sorry -- and secondly, can we take it from your emphasis on advanced conventional weapons and sensitive technologies that you are not concerned about the other things, about --
MR. BOUCHER: I'm not sure I can say I'm not concerned about the other things, because I'm not sure I can describe all the other possible things that they might sell. What we want to do is hear from them what they have in mind, what they intend to do. We know from US law and from our basic concerns about the region that advanced conventional weapons and sensitive technologies are the most serious concerns that we have. I can't quite say that everything else is okay. I'm sure some of the others probably doesn't matter as much.
Q: This presumably is generated by, then, Russia's economic situation. The last Republican administration, the last Republican Secretary of State, Mr. Eagleburger, was very understanding of arms transfers that he thought were not advanced, that were not threatening to the United States.
MR. BOUCHER: Having been around at the time, as you were, I remember several occasions when Secretary Eagleburger raised arms transfers to Iran with the Russians.
Q: Yes, but I'm saying that there were two sides. He showed some understanding of their economic situation, thought innocuous transfers or things that weren't threatening were, you know, not a problem, understanding how much Russia was in need of capital.
Do you see any leeway here that maybe there is a gray area, Moscow needs money and therefore Moscow steps right up to that line, that danger line, that red line? Or do you want to open a big aid program? I mean, Russia is in trouble financially. They've got to sell big guns.
MR. BOUCHER: I don't want to freelance on this. I have not heard anyone in this Administration express the view that Russia needs to sell arms for economic reasons, that Russia should sell arms for economic reasons. Obviously, in the modern world, as Russia reforms its economy, there are abundant opportunities for investment and for exports and for economic development in Russia without relying on arms sales as a principal source of revenue. I would point to the price of oil and the price of other raw materials these days.
Q: Richard, depending upon which type of weapons systems you're able to confirm that the Russians have sold to the Iranians, would there be ramifications as far as the US is concerned?
MR. BOUCHER: Yes, depending.
Q: And what would those be?
MR. BOUCHER: It depends.
Q: They wouldn't get as much aid as they might have wanted?
MR. BOUCHER: Again, we don't know what we're dealing with here. The first important thing is to find out what they mean by "defensive weapons," what they intend to sell, and whether they have any contracts. Once we find out that both from law and policy, we'll have a better framework. What I have made clear is that there are certain things which quite clearly would cause serious concern to the United States.
Q: And serious ramifications?
MR. BOUCHER: And serious ramifications, either legal or policy ones. But I don't know -- till we know what they're dealing with, we don't know what we might -- what it might cost. return to menu
11. Text: On Continuation of Iran Emergency
The Washington File
March 13, 2001
(for personal use only)
On March 15, 1995, by Executive Order 12957, the President declared a national emergency with respect to Iran pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) to deal with the threat to the national security, foreign policy, and economy of the United States constituted by the actions and policies of the Government of Iran, including its support for international terrorism, efforts to undermine the Middle East peace process, and acquisition of weapons of mass destruction and the means to deliver them. On May 6, 1995, the President issued Executive Order 12959 imposing more comprehensive sanctions to further respond to this threat, and on August 19, 1997, the President issued Executive Order 13059 consolidating and clarifying the previous orders. The last notice of continuation was published in the Federal Register on March 14, 2000.
Because the actions and policies of the Government of Iran continue to threaten the national security, foreign policy, and economy of the United States, the national emergency declared on March 15, 1995, must continue in effect beyond March 15, 2001. Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), I am continuing the national emergency with respect to Iran. Because the emergency declared by Executive Order 12957 constitutes an emergency separate from that declared on November 14, 1979, by Executive Order 12170, this renewal is distinct from the emergency renewal of November 2000. This notice shall be published in the Federal Register and transmitted to the Congress. return to menu
C. U.S. - Russian Relations
1. Bush Says Russia Not Enemy But Could Be Threat
March 15, 2001
(for personal use only)
WASHINGTON - President George W. Bush said Tuesday that his administration planned to make it clear to President Vladimir Putin that it did not see Russia as an enemy, although it may be a threat.
In an interview with reporters from regional newspapers, Bush explained his theories about Russia in relation to missile defense.
"Missile defense is the ... beginning of focusing resources on the true threats facing America," Bush said in the interview, a transcript of which was released by the White House.
"Russia is not an enemy. They may be a threat, if they decide to be, but they're not the enemy," he said. "And it's going to be very important for my administration to make that very clear to Mr. Putin."
Bush and Putin are at odds over Bush's plans to build a missile-defense shield. Putin is a strong supporter of the Cold War-era Anti-Ballistic Missile Treaty, which Bush has vowed to scrap if necessary to build the shield.
Bush has said the United States needs to create a national missile-defense umbrella to protect its territory from a surprise attack by "rogue states" such as Iran and North Korea.
"Anybody with a nuclear weapon is a threat," Bush said. "But the true threats to stability and peace are these nations that are not very transparent ... that don't let people in to take a look and see what they're up to."
The United States urged Russia this week not to provide Iran with advanced conventional weapons or sensitive military technologies when it resumes its arm sales to Iran. Putin has told the United States he would go ahead selling arms to Iran and to complete construction there of a nuclear power plant.
The United States has complained repeatedly to Russia about the transfer of missile and nuclear technology to Iran. return to menu
2. Russia Seeks New Framework for U.S. Relations
March 15, 2001
(for personal use only)
MOSCOW (Reuters) - A senior Russian security official was quoted Thursday as saying that Moscow wants a new framework for ties with the U.S. administration despite statements by President Bush that Russia poses a threat.
Russian television stations broadcast footage of a visit to Washington by Sergei Ivanov, Secretary of the Security Council and a close ally of President Vladimir Putin.
His talks were the highest level U.S.-Russia contacts in either country's capital since Bush's January inauguration.
"We had a good understanding on maintaining everything we achieved which was good under the previous administration and on creating new mechanisms. I am sure of this," Ivanov was shown telling Russian journalists.
He acknowledged that the commission that had handled U.S.-Russian matters for several years, co-chaired by the U.S. vice-president and the Russian prime minister, would be abandoned. U.S. politicians had accused the body of making too many concessions to Moscow.
"At the same time it is clear and logical that some sort of new mechanism will be created," Ivanov's said. "What form it will take and what level it will work at still has to be discussed."
The sharp comments from Washington about Russia being a potential threat emerged as Moscow unabashedly cemented closer ties this week with Iran.
Russia has pledged to clinch arms sales with Iran and help complete a nuclear power station.
The United States fears that Russian supplies of high technology and the completion of the nuclear power station at the Gulf port of Bushehr could help Iran develop nuclear weapons.
Ivanov's talks with Secretary of State Colin Powell and National Security Adviser Condoleezza Rice almost coincided with Powell's comments that Washington's approach to Moscow should be similar to the "very realistic approach" of the Soviet era.
Bush had said the previous day that Russia was a potential threat on the basis of its opposition to U.S. plans to build a missile shield to guard against Iran and other "rogue states."
"Russia is not an enemy," Bush told reporters. "They may be a threat, if they decide to be, but they're not the enemy."
Both Rice and Central Intelligence Agency head George Tenet have also spoken of a Russian threat, with specific reference to alleged proliferation of nuclear technology.
The Russian Foreign Ministry criticized Thursday a CIA report on weapons of mass destruction, saying it portrayed Russia as "virtually the sole guilty party in proliferating weapons of this nature" and had "clear political aims."
In a separate interview with ORT public television, Ivanov said Russia and the United States were "naturally not enemies."
"On a series of issues we are clearly partners, like the fight against terrorism which has turned into a world-wide scourge," he said.
Ivanov said he believed the Bush administration was "truly aiming for a constructive and calm dialogue."
Alexei Malashenko of the Carnegie Endowment think tank, said U.S.-Russian relations were unlikely to deteriorate seriously.
"Not that much has greatly changed in Russia's relationship with Iran to affect ties with the United States. Russia was supplying arms and building the power plant before," he said. "I see no catastrophe." return to menu
D. Nuclear Waste
1. Kola Peninsula "nuclear hazard for all north Europe"
March 14, 2001
(for personal use only)
MURMANSK, Mar 14, 2001 (Itar-Tass via COMTEX) -- The far north Kola Peninsula has more nuclear reactors than anywhere else in Russia and is a serious radiation hazard for all northern European, Murmansk Governor Yuri Yevdokimov said on Wednesday.
He told a meeting of the regional Barents-Euro-Arctic Council that during the 40 years of operation of civil and military nuclear reactors, more than 10 million curies of radioactive substances had accumulated in radioactive waste and used nuclear fuel stored in the Russian North.
Half of it was kept in an environmentally-dangerous way, he said, noting that to ensure full radiation security in the region required an investment of 1,5 billion U.S. dollars.
Russia had no such funding and hoped for aid from the international community. But Russia's leadership was taking impressive measures to solve the problem, he said. The Northern State Company SEVRAO had been set up and all coastal radiation-technical bases of the northern naval fleet were being transferred to that company.
Construction of a facility to process liquid radioactive waste was nearing completion at the Murmansk repair company, Atomflot, and a plant to process solid radioactive waste would be built in the city of Polyarny.
Construction was well in progress for other regional projects but a solution to the entire problem was still far away, the governor said.
Foreign ministers from Russia, Norway, Finland and Sweden, and observers from other Western countries meeting in Murmansk on Thursday, will discuss how neighbouring Nordic countries and the world community as a whole can work together on the problem. return to menu
2. Minatom pretends to increase export
Rashid Alimov, Igor Kudrik
The Bellona Foundation
March 12, 2001
(for personal use only)
The export value of the Russian Ministry for Nuclear Energy has reached the amount of $2.3 billion. The major share came from the highly enriched uranium deal between Russia and the USA.
The last meeting of the Russian Ministry for Nuclear Energy, Minatom, board declared the perspective plans on activities in the new market of the Southeast Asia, ministry's press centre reported. One of first steps in the region is planned to be Russian construction of a research reactor in Myanmar. The Myanmar junta is accused by the United States and other Western opponents of carrying out a string of human rights abuses, and crushing all political oppositions.
Minatom also continues to fulfill the contracts on construction of four reactor units in Iran, China and India. Now the ministry prepares the feasibility study on the second unit of the Iranian Nuclear Power Plant in Bushehr.
Both the USA and Israel voiced their concern over the Russian project in Iran, suspecting that Iran may use the NPP to develop nuclear weapons.
Minatom is also involved in foreign trade activities with other foreign countries. The contracts with the German Siemens on the deliveries of nuclear fuel to five reactor units in Germany, two units in Switzerland and one in Sweden will be extended. A new Russian-Ukrainian-Kazakh enterprise established to manufacture fuel for 11 units of the Ukrainian nuclear plants equipped with VVER-1000 reactors.
In the beginning of February, the deliveries of nuclear fuel for Indian Tarapur NPP have been resumed. The USA State Department has called on Russia to stop this deal, accusing official Moscow of the lack of adherence to the nuclear materials non-proliferation. The representative of the Indian Ministry of Foreign Affairs said in response that India "consistently and strictly" follows the requirements of the International Atomic Energy Agency.
The total export value of Minatom amounted to $2.3 billion, which is almost $400 million more than in 1999.
The major part of the export, however, came from the US-Russian deal, under which the USA agreed to buy 500 tonnes of highly enriched uranium blended down for burning in American nuclear power plants. From June 1995 and through October 2000, the United States paid Russia $1.6bn for slightly more that one-fifth of the 500 tonnes of uranium. The deal is valid from 1993 and until 2013.
The other Minatom's contracts abroad are covered through either loans or barter agreements, without bringing in the much-desired cash. return to menu
E. Russian Nuclear Power Industry
1. Russia Plans To Build a Floating Power Plant
The Moscow Times
March 15, 2001
(for personal use only)
Nuclear Power Minister Yevgeny Adamov said a floating nuclear power plant will be built in the northwestern town of Severodvinsk - a move that was immediately branded by environmentalists Wednesday as a breach of federal laws and a danger for locals.
Adamov said Tuesday that the plant will generate 70 megawatts of power and 50 gigacalories of heat and supply electricity to Severodvinsk and the Northern Machine-Building Plant, the city's biggest power consumer and Russia's largest submarine builder.
Nuclear Power Ministry spokesman Yury Bespalko said Wednesday that the plant will cost $109.7 million. Although he did not say who would finance the project, another ministry source said the investment will be provided by the ministry itself. The Severodvinsk plant will be built under the same blueprints that had been drawn up in 1998 for another floating nuclear power plant in the Far East, the source said.
That project, for a station in Pevek, Chukotka, was frozen amid financial problems in the region. It had passed the stage of feasibility studies and parts have even been ordered from the Izhorskiye Plant in St. Petersburg. The Pevek plans, which were prepared by the Nizhny Novgorod-based OKB Mashinostroyeniye factory, will be modified for the Severodvinsk location, the Nuclear Power Ministry source said.
Feasibility studies for the Severodvinsk plant are scheduled to be completed by the end of 2001. Environmentalists, who have long campaigned against the Far East project as a violation of the law, said Adamov's announcement came as a shock. "Nothing has changed since then in that law," said Ivan Blokov, spokesman for the Moscow office of Greenpeace. "It still stipulates that 'the location, drafting and construction of nuclear power plants is prohibited … in the vicinity of bodies of water of federal significance.'"
The planned Severodvinsk plant is to float on the Severnaya Dvina River near the White Sea. It is located in the Arkhangelsk region, east of Murmansk and Scandinavia.
"Undoubtedly, the White Sea and Severnaya Dvina are bodies of water of federal significance," Blokov said. Alexei Yablokov, environmental adviser to former President Boris Yeltsin, added: "In choosing between the two evils, the Pevek station in Chukotka would have been a better evil because it would have caused less damage [if a disaster occurred]. Here, it is too close to the center of Russia and to the Scandinavian countries."
Thomas Nilsen, spokesman for the Bellona environmental organization, said he is worried about the local residents most of all. "I was in Severodvinsk a few years ago," he said. "The block of flats are just a few hundred meters away from the place where the plant will be built. It is very dangerous - in the case of even a minor accident that would release radioactive steam from the plant, no one would be able to warn people, or to manage to evacuate them." A ministry source close to the $270 million Pevek project said construction was put on hold purely for economic reasons: The region appeared to be unable to pay for the electricity that the plant was supposed to generate. The impoverishment of the region was not clear in 1995 when the project was initiated, said the source. return to menu