09MOSCOW1373, IZHORA STEEL WORKS NEEDS INVESTMENT TO REALIZE RUSSIA’S

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Reference ID	Created	Released	Classification	Origin
09MOSCOW1373	2009-05-28 09:57	2011-08-30 01:44	UNCLASSIFIED//FOR OFFICIAL USE ONLY	Embassy Moscow

VZCZCXRO4648
PP RUEHDBU RUEHLN RUEHPOD RUEHVK RUEHYG
DE RUEHMO #1373 1480957
ZNR UUUUU ZZH
P 280957Z MAY 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 3522
INFO RUEHLN/AMCONSUL ST PETERSBURG 5369
RUEHVK/AMCONSUL VLADIVOSTOK 3247
RUEHYG/AMCONSUL YEKATERINBURG 3602
RHMFIUU/DEPT OF ENERGY WASHDC
RUEHXD/MOSCOW POLITICAL COLLECTIVE

UNCLAS MOSCOW 001373 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR EUR/PRA: NYOUNG 
 
E.O. 12958: N/A 
TAGS: KNNP PREL ENRG PGOV SENV RS
 
SUBJECT: IZHORA STEEL WORKS NEEDS INVESTMENT TO REALIZE  RUSSIA'S 
CIVIL NUCLEAR PLANS 
 
REF: MOSCOW 851 
 
¶1.  (SBU) Summary:  The Izhora Steel Works currently is Russia's 
only producer of nuclear power plant equipment sets for Russia's 
1000 megawatt pressurized light water reactors (VVER).  Although 
Izhora claims it can meet current plans for domestic and 
international nuclear construction, it needs at least 15 billion 
rubles (441 million USD) to upgrade its capacity to do so.  Izhora 
officials did not believe that Rosatom's proposed reestablishment of 
Atommash to produce additional nuclear sets was feasible.  End 
Summary. 
 
¶2.  (U) First Deputy Director General Vladimir Lebedev was initially 
confrontational during an April 23 meeting with EST Off and EST/DOE 
LES at the Izhora Steel Works, located approximately 20 kilometers 
south-east of Saint Petersburg in Kolpino.  Flanked by Technical 
Director Yuriy Gordiyenkov and two other Izhora managers, Lebedev 
questioned why the Embassy was interested in Izhora's capabilities 
and plans.  Once mollified that the visit was purely to understand 
Izhora's capabilities to support Russia's nuclear construction 
plans, Lebedev summarized Izhora Steel Work's history and 
accomplishments.  Founded by Peter the Great in 1722, Izhora was the 
Soviet Union's second largest machine building plant, with over 
30,000 workers.  Since 1954, Izhora has produced 45 nuclear power 
plant (NPP) equipment sets, including reactor vessels and steam 
generators.  Lebedev complained that Izhora's ruin began with the 
1992 privatization that broke the firm up into different 
enterprises.  The largest remaining parts of the original 
organization are the Metallurgical and Processing plant, the Casting 
Plant, and the Mining Equipment Production Plant.  Lebedev recalled 
that Izhora survived the difficult years after 1992 thanks to orders 
from Russia's international nuclear construction firm, 
Atomstroyexport, for nuclear reactor sets for Iran's Bushehr NPP and 
other overseas construction. 
 
¶3.  (SBU) Lebedev initially claimed that Izhora will be able to 
produce all the required equipment for the planned and projected 
reactor projects under both the domestic Federal Targeted Program 
(FTP) for nuclear power plant construction as well as 
Atomstroyexport's international commitments, with Izhora ready to 
produce four complete sets per year.  However, he later admitted 
that Izhora's capacities were "not without limits" and that it can 
only produce two sets per year with its current assets.  (Embassy 
Note:  The current FTP provides for two reactors to be constructed 
in Russia each year through 2013 and three per year thereafter. 
With Atomstroyexport's contracts to build eleven reactors in various 
overseas locations (reftel), nineteen reactors would need to be 
begun/constructed over the next five years, requiring at least four 
sets per year.  End Note.)  Responding to EST Off, Lebedev commented 
that at least 15 billion rubles (441 million USD) would be required 
to upgrade Izhora's capacity.  However, he gave no indication that 
there were any actual plans to acquire such investment or increase 
Izhora's capacity. 
 
¶4.  (SBU) EST Off asked about Rosatom's recent acquisition of shares 
in Atommash, the other firm that produced reactor sets in Soviet 
times.  Lebedev stressed that this is an "adventure" being pursued 
by Rosatom's "young Turks."  He commented that "there was hardly 
anyone in the hierarchy at Rosatom/ Atomenergoprom who even 
remembered the old Atommash."  In addition, Lebedev said that 
Atommash, even in its best year, never reached its goal of producing 
six sets of NPP equipment and "hasn't produced any sets in the last 
twenty years."  He stated that it would be practically impossible to 
reorganize and reestablish Atommash and any investments directed to 
do so will be stolen and/or lost.  Lebedev made it clear that Izhora 
will not provide any help to Rosatom in this undertaking. 
 
¶5.  (SBU) EST Off and EST/DOE LES were given a tour of Shop 34, the 
welding and assembly building, where reactor and other pressure 
vessels are assembled.  During the tour, the shop's chief engineer 
commented that all of the more modern equipment was from Italy and 
Germany, but that he would really like to buy modern U.S. steel 
forming and welding machines.  He also mentioned that the plant was 
running "flat out" with no capacity left idle that could produce 
more nuclear vessels.  (Comment:  The building was in a poor state 
of maintenance and a blend of fairly modern pieces of equipment in a 
1950's environment.  End Comment.) 
 
BEYRLE

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