Bushehr NPP: What Delayed the Start of Commercial Power Generation?

27.07.2011

Any decisions on the proposed second Bushehr reactor would have to wait until Iran answers the key remaining questions on its past undeclared nuclear activities. Meanwhile, commencing power generation at the NPP can have a positive influence on Russian-Iranian relations.

After years of delays, Iran's first nuclear power plant at Bushehr has reached first criticality on May 8, 2011. Commercial power generation is now expected to begin by August 2011. The agreement between the Iranian and Russian governments to build the plant was signed in Moscow on August 25, 1992. On January 8, 1995, the two sides signed a contract. Why did it take 187 months for the Bushehr NPP to start producing electricity?

Russian specialists who worked on the first reactor unit of the Bushehr NPP faced a host of technical, engineering, political and financial challenges. In order to cut costs, Iran insisted on making full use of the existing structures and equipment supplied by German company Siemens in the second half of 1970s before abandoning the project in 1979 due to the financial crisis and political unrest that was roiling Iran. This left the first reactor unit 80%-85% finished, and the second 50%-70% finished.

The main problem in the first stage of the project was the complexity of integrating the Russian reactor design into the existing German-built frame. Russian specialists also needed to ascertain whether the German equipment – mothballed and left in storage at the site – was still in good working order. That work took several years to complete. Some 47,000 pieces of equipment were vetted; another 11,000 seemed to be in working order but their specifications and manuals were missing and needed to be recovered. Meanwhile, over the years since the Germans started the NPP, nuclear safety requirements in Russia and internationally had become more stringent. Some of the German machinery being integrated into the Russian design therefore had to be upgraded to meet modern safety standards. It took the Iranians until December 1999 to approve the final set of requirements and specifications for the first reactor unit of the Bushehr plant, incorporating all the technological changes. It should be noted that in recent months – especially after the fuel unload from the reactor in early 2011 caused by a malfunction of the German equipment – Iranian experts have admitted that using the German equipment in the project was the wrong decision.

The dissolution of the Council for Mutual Economic Assistance (CMEA) and the subsequent disintegration of the Soviet Union spelled the end of close cooperation ties between former Soviet countries in many areas, including nuclear engineering. Russia faced the task of assembling a new and very complex supply chain required for building a nuclear plant based on the VVER design. It had to overcome difficulties at every single step, such as securing loans, hiring skilled personnel, finding subcontractors, etc. At a time when the government had already stopped subsidizing the construction of NPPs abroad, the general contractor’s main (and in most cases almost impracticable) task became to secure the necessary loans. There was also a shortage of skilled Russian engineering and construction specialists with suitable experience. At the time, the last nuclear energy reactor built in the former Soviet Union was the No. 6 reactor at the Zaporizhzhya NPP in the Ukraine. That is why Ukrainian specialists were invited to work in Iran after they had completed their stints at Zaporizhzhya. At one point Ukrainians made up 80% of all non-Iranian personnel working at Bushehr. During the frequent construction hiatuses, when engineers should have been sent back home, the Russian contractor had to keep the Ukrainians at Bushehr with full pay, fearing that “once they leave and move on, they'll be lost to us.” At certain points during the project, the number of people on the Bushehr payroll exceeded 2,500.

Meanwhile, the equipment subcontractors back in Russia were facing similar problems. The Izhorskie Works, which lost most of its government contracts in the 1990s and was forced to slash its workforce, had to bring in qualified welders from all over Russia. The reactor vessel it shipped to Bushehr via the St. Petersburg seaport in November 2001 was the first it produced in 14 years.

Finding suitable subcontractors in Russia was also a challenge. Orders were scarce, so every subcontractor tried to milk the Bushehr project for all it was worth. That meant additional delays for the general contractor that was always trying to keep prices down at an acceptable level. There were frequent problems with quality and deadlines, and some of the required services could not be obtained from Russian companies at any price. For example, in November 2001 the general contractor needed a ship to deliver the reactor vessel to Iran from the St. Petersburg seaport. The ship had to meet a set of special requirements, including an onboard crane capable of lifting 400 tons. Russia did not have a single appropriate ship left at the time, so the general contractor had to turn to foreign shipping companies. To make things even more difficult, Iran insisted that the choice of the ship, its flag and route must be agreed with the government in Tehran.

The contract signed on January 8, 1995 contained a commitment by the Russian side to use as many Iranian subcontractors as possible in the work on the first reactor unit of the Bushehr NPP. The Iranian side assumed full responsibility for the quality and timely completion of its share of the project. The Iranian companies were supposed to work under the technical supervision of Russian specialists. The Iranians also undertook to supply some of the equipment, including cables, pipelines, etc. In reality, they simply lacked the experience required for such a complex project. Once the actual work had begun, it soon became clear that the Iranian subcontractors were not up to the tasks they took on in the contract. Only in August 1998 was the decision made that the Russian general contractor would finish the first reactor unit on its own in order to keep the project on track. According to estimates by Russian experts, it took the Iranian subcontractors three years to do 12 months worth of work.

The U.S. stance on Bushehr had a serious impact on the project’s implementation. In the early 1980s, Washington imposed an embargo on the export of nuclear technologies, even for civilian use, to Iran. The U.S. government argued that there was a danger of those technologies being diverted to illicit purposes. It also maintained pressure on other nuclear exporters to join the embargo. It succeeded in persuading Germany not to take part in the completion of the Bushehr plant and to ban exports of any components.

Washington spared no diplomatic effort to persuade foreign subcontractors to walk away from the Bushehr project. Those efforts eventually yielded some significant results. Ukrainian and Czech companies were supposed to manufacture some of the equipment for the Bushehr NPP. Ukraine's Turboatom was due to supply a set of two turbines. But those plans were cancelled shortly before U.S. Secretary of State Madeleine Albright's visit to Kiev on March 6, 1998. The government in Kiev ordered Turboatom to pull out of the Iranian project. The Czech Republic's ZVVZ Milevsko was due to supply ventilation equipment. But in March 2000, shortly before Madeleine Albright's visit to Prague, the Czech government passed a law through parliament that effectively vetoed the deal. As a result, Russia's Atomstroyexport suddenly had to find alternative suppliers. That caused additional delays, but the problem was ultimately resolved. There were several other cases of politically motivated decisions by subcontractors to walk away from the Bushehr project, despite their earlier commitments. At times, Atomstroyexsport had to order some equipment three times with three different suppliers before it was actually delivered.

Over the course of the project, Iranian payments were often behind schedule for a variety of reasons – sometimes by as much as six months – resulting in additional delays at the Bushehr site.

Moreover, from 2006 to 2010 the UN Security Council passed four rounds of sanctions against Iran (Resolutions 1737, 1747, 1803, 1929) in order to halt its large, undeclared nuclear program, which violated Iran’s commitments under the safeguards agreement with the IAEA. Although the sanctions do not target the Bushehr plant directly, they do create additional difficulties for the project’s implementation. In particular, they have made the procedure of signing contracts with third country suppliers much more complicated. There have also been problems with the transit of shipments to Iran. On March 29, 2008 a cargo of heat insulation equipment for the Bushehr NPP en route from Russia to Iran was seized on the Azerbaijani-Iranian border (Astara border terminal). In view of the recent sanctions imposed on Iran, Azerbaijani customs officials requested additional information about the cargo's technical specifications and intended use, which caused a delay of more than a month.

But the project has given both Russia and Iran some valuable experience working together to build a nuclear power plant. That experience (some positive, some negative) can now be used to build more nuclear power plants in Iran, especially the second reactor unit at Bushehr, provided that there is political will in Russia. Most of the technical and technological problems in Russian-Iranian nuclear cooperation mentioned in this article have already been resolved. For example, Russia has found reliable subcontractors that will deliver. Russia and Iran agree that the proposed second reactor unit should be built from scratch instead of trying to integrate it into the existing German-built frame. There is also greater willingness in Russia to provide government support to joint NPP projects.

The only obvious factor working against further Russian-Iranian cooperation in this area is the IAEA’s questions about Iran's undeclared nuclear activities. Any decisions on the proposed second Bushehr reactor would have to wait until Iran answers the key remaining questions on its past undeclared nuclear activities, and until the most sensitive issues of the Iranian nuclear dossier are resolved.

Meanwhile, commencing power generation at the NPP can have a positive influence on Russian-Iranian relations, which have been complicated by Russia’s decision to cancel the delivery of the S-300 air defense missile system to Iran.

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.

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