Russia » Economics
Author`s name Michael Simpson

Foreigners Give up Solving Russia's Ecology Problems

Millions of dollars dissolved in liquid waste
A scandal broke out in the Russian city of Murmansk in connection with foreign investments sent to Russia for ecology. Several millions of dollars that the USA and Norway appropriated for construction of a system for liquid waste treatment at Murmansk's Atomflot unitary enterprise were spent on equipment that has been standing idle for about three years already. At that, the Atomflot management, the contractor of the project mentions problems connected with financing and says the customer of the project, the Nuklid coordination center from St.Petersburg is a poor manager of the project. Nuklid, in its turn blames Atomflot for the failure to meet the commitments of the contract.

Some time ago the Ministry of Atomic Energy and the Ministry of Transport got involved in the scandal; however, they still cannot settle it. Meanwhile, experts say that the situation connected with construction of a system for liquid waste treatment may have far-reaching consequences for the international cooperation in Russia's north-western region and for ecology of the Murmansk region.  
In 1994, the USA and Norway agreed to participate in a project called "Murmansk Initiative – the Russian Federation" to help Russia meet the requirements of the 1972 London Convention. According to the convention, disposal of radioactive wastes in the World Ocean is prohibited. Liquid radioactive wastes from Russian nuclear icebreakers were poured out into the Barents Sea until 1989; liquid wastes from nuclear submarines of the Northern Fleet were discharged into the sea until 1993. The situation changed when a system for liquid wastes treatment with the capacity of 1,200 cubic meters per year was constructed at Murmansk's enterprise Atomflot. But the system processed only liquid wastes of nuclear icebreakers, as it was believed that equipment of higher capacity was necessary to process radioactive liquid wastes of the Northern Fleet. That was the reason why it was decided to upgrade the previously constructed system and to build a new one system with the capacity of up to 5,000 cubic meters per year instead. Norway and the USA agreed to finance the project. 

Atomflot determined that the system's value was about $6 million (participants of the project, including Russia paid the sum in approximately equal shares). The money was appropriated stage-by-stage, the USA and Norway agreed to finance the project stagewise.
As Norway and the USA saw there were no serious problems connected with realization of the project, they expected that a new system would start operating in a couple of years. However, the fate of the project turned out to be really hard. It was planned that in 1998 the Norwegian foreign minister accompanied with the Norwegian press-corps would come for an official opening of the system. However, neither the minister nor the King of Norway Herald who visited Murmansk later that year had a chance to see the project completed. In May 2002, a delegation of the Norwegian Foreign Ministry came to Murmansk to see the results of the project realization. However, members of the delegation were not allowed into the workshop where the system stood as they had no certificates confirming they had undergone medical examination. According to the Bellona international ecological organization, the actual reason of the denial was very slow elimination of defects in the project that might disappoint the Norwegian delegation.

Unfortunately, the original project of the new system was so much deficient that it couldn't be performed. This fact entailed a number of different technical problems. Because of the technical problems opening of the system was postponed several times; finally it was decided the system would be opened in the middle of 2003.

In July 2003, when the deadline passed, Atomflot specialists arrived at a conclusion that the new system for liquid wastes treatment (the object invested with millions of dollars) couldn't be started under the present-day conditions. A special press-conference on the problem was held by Atomflot Director Alexander Sinyayev last week. He said the system couldn't be started because of technical failures and problems with financing of the project.  The Atomflot director blamed the customer of the project and the research institute that designed the project for "oversimplification" that resulted in numerous alterations of the project. Alexander Sinyayev adds that about 2 million rubles are required now to complete some of the project's components and start the system. However, as the enterprise has already invested 13 million rubles from its own assets especially for the project, then the sum required for completion of the project makes up 15 million rubles. It is quite obvious that the USA and Norway won't invest the project any more. The customer of the project, Nuklid, attempts to shoulder the responsibility for the failure upon Atomflot. The Atomflot director suggests an auditing of the project must be conducted to find out on what purposes the money was spent.

Nowadays, Atomflot and Nuklid are in conflict. Alexander Sinyayev says that although majority of technical faults have been improved, it is not clear yet when the system can be started.

On the contrary, the Nuklid coordination center, the customer of the project blames Atomflot for the delay with the start-up of the system. At the same time, the company admits that designing of the system leaves much to be desired.

Nuklid Director Nina Yanovskaya says Atomflot won't stop the old system for liquid waste treatment, which is by the way of particular importance for testing and start-up of the new system as both systems have a common block for receiving of liquid nuclear wastes. She says that the new system can be started in the third quarter of 2003, but the process is hampered by Atomflot that fails to observe the commitments it assumed in the framework of the contract.

The Nuklid director says that the old system must be stopped for two months in order to start up the new one; the break won't cause much damage to processing of liquid nuclear wastes from nuclear icebreakers of the Murmansk sea steamship line. It is RF Deputy Minister of Transport Vyacheslav Rukshi who is to make a decision to stop the old system especially for the start-up of the new one.

Nuklid thinks that the Murmansk sea steamship line is not interested in upgrading of the equipment meant for processing of liquid nuclear wastes. Indeed, the old system serves the sea steamship line only; while the company will have to share the new system with the Northern Fleet (it means that the Ministry of Transport will have to share the system with the Ministry of Defense). Nina Yanovskaya says this is the reason why the Ministry of Transport and Atomflot delay completion of the project "Murmansk Initiative – the Russian Federation".

There are discrepancies between the Ministry of Defense, the Ministry of Transport and the Ministry of Atomic Energy with respect to the project. They are explained not only with financial aspects of the new system's exploitation. The problem is that the ministries have different concepts of dealing with radioactive wastes; they have no common approaches to usage of objects belonging to the federal property (the new system for liquid wastes processing is meant).

To tell the truth, nowadays neither Russian authorities nor foreign participants of the project have a common opinion about the reasons why the project is still unfinished. When the Norwegian Clearing House studied the project, it was declared that Norway's management of the project was poor. The USA blamed the Russian side for the outage of the new system. The Norwegian Radiation Protection Control (NRPC) blamed the American participants of the project for several of the problems connected with the new system. For example, it was said that American representatives fixed unfeasible dates sometimes as they planned to complete the construction before presidential elections in the USA. It was added at that the American equipment Honeywell, that became a part of the new system’s construction, caused much trouble. The USA didn't finance adaptation of the equipment to the peculiarity of the system.

For the time being, realization of the project doesn't depend upon Norway or the USA, but upon the above mentioned Russian departments.
It is important to state here that although the management of the project was poor, the main problem is still different. As it turns out, Russia cannot give a report on what purposes it spent millions of dollars appropriated by Norway and the USA. This problem may seriously undermine the trust of foreign investors to Russia. If the Russian authorities don't complete the project and find out the guilty of the scandalous situation with the spending of money, foreign countries may change their tactics in rendering of ecological assistance to Russia.

Igor Zhevelyuk
Nord-West Kurier