Rumyantsev replaced

1 December 2005

Alexander Rumyantsev has been replaced as head of Russia’s Federal Atomic Energy Agency (Rosatom) by Sergey Kirienko, former prime minister and most recently presidential plenipotentiary representative in the Volga federal district. Kirienko was appointed by prime minister Mikhail Fradkov on 15 November after being relieved of his duties the previous day.

Introducing Kirienko to department heads of Rosatom, Fradkov said the government was challenging the agency to boost its activity. “I would like to see Sergei Kirienko inheriting the tradition,” the prime minister said, and asked him to pay “special attention” to power generation – particularly to creation of a “common energy space” taking into account the ongoing reform of power utility RAO EES and the need for reform in nuclear industry.

The news was received with a mixed response and some uncertainty by Russian nuclear officials. Despite the general consensus that Rumyantsev was never proactive enough in pushing the interests of the nuclear industry at government level, Kirienko is an unknown quantity. “Kirienko’s appointment breaks the established tradition of appointing a scientist as head of Rosatom,” said Aleksey Makarkin, deputy general director of the Centre for Political Technologies, “but the appointment of a scientist does not necessarily guarantee good administrative work.” One high-ranking industry official commented: “If you appoint a politician, then it is for political purposes, but what those might be we don’t yet know.” Many believe Kirienko will have enough influence at presidential and government levels to lobby for the industry and push through the badly needed organisational reforms which Rumyantsev had failed to implement. Kirienko has the confidence of president Vladimir Putin.

RESTRUCTURING AHEAD

Kirienko has long been seeking a position in the energy industry and is expected to streamline Rosatom. This will include accelerating reform of the nuclear utility Rosenergoatom, which is to become a state-owned joint stock company, and reorganising its outdated and complicated tariff system, which makes it impossible for the industry to compete with RAO UES.

Restructuring Rosenergoatom will require amendments to the law on the atomic energy that prohibits any changes in the structure of a federal unitary enterprise (even making it a 100% state-owned joint stock company). Kirienko will need political will to push these amendments through the state Duma (parliament). He will also need to look at the investment programme of Rosenergoatom and other agency enterprises including the research institutes.

Kirienko will be expected to restore the dented international reputation of the nuclear industry following its failure to win the tender to construct Finland’s fifth nuclear plant, the arrest of former atomic energy minister Yevgeny Adamov, and delays to the Tianwan VVER-1000 unit. He will also have to push ahead with completing the construction of partially built Russian nuclear units and building new ones, as well as lobbying for more financing for the new 1500MWe VVER reactor.

Because of Rosatom’s tarnished reputation, Russia now finds it difficult to win foreign contracts. Since June 1998, it has failed to obtain a single contract to build reactor units abroad, while in the 1990s deals were concluded for the construction of five units in India, Iran and China.

Kirienko is “a professional person with an untarnished reputation,” said Vladimir Orlov, course director at the Geneva Centre for Security Policy. “Putin needs such a person, with the qualities of a politician and a businessman. Kirienko will be set the task of increasing the income from exports. Rumyantsev coped with this quite well, but lacked dynamism.” He added that he believes Kirienko has substantially greater political resources than Rumyantsev.

Rosatom and government officials have all commented privately on Rumyantsev’s reluctance to press the Finance Ministry for extra money to support the industry. However, Rumyantsev’s value as a diplomat is also recognised, in particular his contribution towards developing a dialogue with the USA. This is what kept him in his post long enough to celebrate his 60th birthday in June and the 60th anniversary of the atomic industry in early September. Well-informed sources said Rumyantsev would be appointed ambassador to a European country, possibly Denmark or Hungary.

RUSSIA'S NUCLEAR OUTLOOK

Commenting on the future of Russia’s nuclear industry, Lev Ryabev said there were some signs of a revival. Ryabev was the last head of the USSR’s Ministry of the Middle Machine Engineering and the first deputy minister of atomic energy in 1993. In 2002 he became an adviser to the minister and the director of the federal nuclear centre VNIIEF in Sarov. Between 1985 and 1990 Russia was commissioning around three 1000MWe nuclear units a year. “Now we are doing one unit in three years – and that is not the commissioning from scratch but construction completion.” But he expects the situation to improve: “I think we will manage to commission one unit every two years for the coming four years and then, after 2010, we’ll be doing one unit a year.”

He said the key issue is funding: nuclear power needs $1.1-1.2 billion annually to commission one unit but just $980,000 is allocated to meet all needs including safety improvements, life extensions, spent nuclear fuel storage construction, new designs, construction completion, and so on. “When we have at least one unit being commissioned each year, the entire industry will start working,” said Ryabev. But Russian nuclear power is facing stiff competition both internally and externally. Ryabev believes efforts should focus on perfecting and marketing the VVER-1000 rather than developing the VVER-1500: “In Russia in the two coming decades nuclear power has to be based on a reactor which has been mastered and can be manufactured in series. We must win tenders with this reactor.”


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