Publication: Eurasia Daily Monitor Volume: 4 Issue: 52

Last fall Sergei Kiriyenko, chief of Russia’s Federal Atomic Energy Agency (Rosatom), announced that September 2007 is the final deadline for Iran to launch the Bushehr nuclear reactor (see EDM, September 20, 2006). Bushehr was partially constructed in the 1970s by Germany’s Siemens, but it was abandoned unfinished after Iran’s Islamic Revolution in 1979. The Russian company Atomstroiexport has been rebuilding Bushehr for over 10 years. Initially the reactor was planned to become operational in 2000; it is reported to be well over 90% complete. More recently, a new launch date was announced in October 2006 and the next key deadline — September 2007 — was announced only several months ago and now it is also in jeopardy.

The Iranians have been pressing Moscow to deliver the nuclear fuel rods for Bushehr well ahead of the reactor’s launch. The fuel — some 100 tons of low enriched uranium — is ready for delivery and is currently stockpiled at a Rosatom plant in Novosibirsk. Last September Moscow promised to send the uranium to Iran in this month. Now Atomstroiexport officials have announced that the reactor will not be launched as planned and the fuel will not be sent (RIA-Novosti, March 12).

At first the Russians characterized the present spat over Bushehr as simply a payment dispute. Last month Atomstroiexport announced that the Tehran was lagging with monthly payments for Bushehr. However, the deputy chief of the Atomic Energy Organization of Iran, Mohammad Saidi, insisted that payments were on track (Itar-Tass, February 20). Last week an Iranian delegation headed by Saidi came to Moscow to discuss the problem with the chief of Atomstroiexport, Sergei Shmatko. On Monday, March 12, Atomstroiexport announced that the talks had ended without agreement and that Iranian officials were falsely proclaiming that the uranium fuel would be shipped to Iran in March as previously announced (RIA-Novosti, March 12).

The building of the Bushehr nuclear power reactor has lasted so long that its cost now substantially exceeds the initial $800-$900 million estimate. Atomstroiexport has already received over $1 billion for equipment and completed work. According to the 1995 contract, a final $200 million payment is pending until after the reactor begins working, but Moscow is at present demanding monthly $25 million installments, while the Iranians are not willing to pay up until the uranium fuel is shipped (Kommersant, March 12).

The uranium fuel delivery issue is a major problem, since Iran does not have substantial amounts of its own natural uranium to enrich. The United States has already told Russia that while the continued slow construction of Bushehr is acceptable, the actual transfer of nuclear fuel without a comprehensive solution to the Iranian nuclear problem is not.

In Moscow, Tehran’s refusal to stop uranium enrichment as demanded by the international community and the UN Security Council has caused serious annoyance. One official told the Russian news agency Itar-Tass that Iranian intransigence “is undermining our international credibility, Iran with a nuclear bomb or a potential for its creation is unacceptable for us and we will not play with them in anti-American games” (Itar-Tass, March 12). Mikhail Margelov, chairman of the International Affairs Committee in Russia’s Federation Council, a person close to Russian President Vladimir Putin and an expert on Middle Eastern policy, has told journalists, “The Iranian nuclear program may in the future acquire a military dimension” (Kommersant, March 13).

The Kremlin has long been suspicious of Iran and its intentions. Tehran has territorial claims on the oil- and natural-gas-rich Caspian Sea bed. All attempts to divide the Caspian since the collapse of the Soviet Union have failed because of Iranian intransigence. Russia considers Iran a potential threat and has been quietly building up its naval capabilities in the region.

In Soviet times, the Caspian was the Soviet Navy’s backwaters. Now the newest ships are sent here. The Caspian flagship Tatarstan, built in 2001, is armed with new Uran anti-ship and OSA anti-aircraft guided missiles, guns, and torpedoes. Its sister ship will be finished this year and is also planned to be deployed to the Caspian. There are four more patrol boats armed with guided anti-ship missiles, four minesweepers, and six marine landing craft. There are additional Border Guard patrol boats. The 77th marine brigade, based at the Kaspiysk naval base in Dagestan, is considered the most battle-ready in the Russian Navy (Lenta.ru, September 19, 2006).

Russian authorities explain the naval build up in the Caspian as an anti-terrorist precaution. Anti-terrorist naval exercises happen regularly, and the 77th brigade has seen action in Chechnya. However, guided anti-aircraft and anti-ship missiles are hardly appropriate for use against “terrorists.” The Russian military suspects that Washington may one day deploy forces in the region, but Iran is clearly the most obvious potential threat that may become much worse if it goes nuclear.

A nuclear Iran is as unacceptable for Moscow as it is for the West. Tehran is withholding further payments for Bushehr to blackmail Russia into shipping the nuclear reactor fuel, while Moscow is pressing the Iranians to stop uranium enrichment and compromise with the international community, or it will withhold the fuel and may support stricter sanctions in the UN.

On the Iranian nuclear issue, Moscow and the West seem to be acting together. But will this tentative alliance achieve much or last long? Russian foreign policy decision-making is totally non-transparent and highly unpredictable. Under Putin, dramatic U-turns have happened before and can be expected in the future.