Russia focuses on clean-up and foreign contracts

28 October 2015

Russia's 2016 federal budget appropriations include RUB13.2bn ($212m) to finance the new federal target programme "Nuclear and Radiation Safety in 2016-2020 and until 2030 (FTP NRS-2). The bill on the budget has been submitted by the government of Russia to parliament and is planned to be reviewed on 13 November. In late September, Alexander Abramov, deputy director for the state policy on radwaste, used fuel and decommissioning of nuclear- and radiation-hazardous facilities, said the total financing of FTP NRS-2 would be about RUB560bn, including the budget funding of RUB394bn. The first programme was financed from the federal budget at RUB172bn, Abramov said.

FTP NRS-2 would also see co-funding from other sources grow significantly to RUB166bn, 90% of which would come from state nuclear corporation Rosatom. He noted that as a result of FTP NRS-2 nearly all used fuel from RBMK reactors would be moved to the dry storage facility at the Mining and Chemical Combine in Krasnoyarsk; all defective and off-standard fuel would be reprocessed; seven of nine production uranium-graphite reactors would be mothballed; 176,000 cubic metres of radwaste would be disposed of; and 4.3 square metres of contaminated land would be rehabilitated. By 2030 Rosatom hopes to solve about 40-50% of its legacy problems, Abramov concluded.

Budget appropriations in the bill for the sub-programme "Expansion of electricity-generating capacities of nuclear power plants" - part of the State Programme, "Development of nuclear power and industry complex" - is have been reduced to RUB27.7bn for 2016. In 2014, the government said it planned to spend RUB38.4bn for sub-programme. Nuclear utility Rosenergoatom is also reducing costs. In 2015 - 2016 the cost of administrative and business activities will be reduced by 30% compared with 2014 - by 15% each year. This target was set on 15 October as one of the steps to achieve the strategic goal of Rosatom to reduce inefficient and wasteful expenditure. "We need a high-quality service at a lower cost, said Rosatom's head of the administrative support Lyudmila Klimova. There is a potential to optimise costs and increase the production of goods and services in the framework of developing import substitution, she noted.

At the same time, Rosatom intends to increase procurements in 2016 to RUB944bn from RUB838bn this year, according to director general Sergey Kiriyenko. "The volume of orders, which we will place on the basis of bidding, will grow each year," he said, adding procurement for foreign contracts will grow even faster. While Russia does not need too many new power units of nuclear and any other generation, he explained, "the main line of our growth in the coming years is foreign contracts". Russia will commission about one reactor a year, he told the international nuclear suppliers' forum ATOMEX 2015 in Moscow on 13 October. "We maintain series construction of nuclear reactors in Russia, but unlike the plans of 2007-2008, which assumed start-up of two-three reactors a year, in the coming years it will be approximately one reactor a year," he said. He noted that there were "about 30 reactors under signed contracts and binding intergovernmental agreements" in Rosatom's foreign order portfolio. However, the external market was a more severe competitive environment, and therefore price and quality of equipment, as well as delivery term, is more significant.

Procurements for overseas projects will be about RUB450bn in 2016, according to Roman Zimonas, director of procurement and director of Department of Procurement Methodology and Organization at Rosatom. "The share of procurement for overseas facilities in 2014 was RUB150bn of the total procurement of RUB600bn; in 2015 is was about RUB300-400bn, or approximately 40% of the total; and for 2016 we plan procurements for overseas projects at about RUB450bn that will be more than 50% of the total," Zimonas said. This included the Akkuyu plant in Turkey, Hanhikivi plant in Finland, a plant in Egypt, as well as new reactors in India.

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