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Cablegate: Kazakhstan Approves Limited Funding to Maintain

VZCZCXRO7725
RR RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSR RUEHVK RUEHYG
DE RUEHTA #2298/01 3290830
ZNR UUUUU ZZH
R 240830Z NOV 08 ZDK
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 3900
INFO RUCNCIS/CIS COLLECTIVE 0835
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0234
RUEHKO/AMEMBASSY TOKYO 0944
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC 0317
RHEHNSC/NSC WASHDC 0402
RHEFAAA/DIA WASHDC
RUEAIIA/CIA WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS SECTION 01 OF 02 ASTANA 002298

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PARM PGOV ENRG MNUC KNNP TRGY UK KZ
SUBJECT: KAZAKHSTAN APPROVES LIMITED FUNDING TO MAINTAIN
U.S.-FUNDED SODIUM PROCESSING FACILITY

REF: STATE 89507

1. (U) Sensitive but unclassified. Not for public Internet.

2. (U) This is an action request. Please see paragraph
nine.

3. (SBU) SUMMARY: On November 5, U.S. and Kazakhstani
officials met in Aktau to celebrate the construction of the
$3.35 million U.S. government-funded sodium processing
facility (SPF). Completing the SPF was the U.S.
government,s final step in the irreversible decommissioning
of the BN-350 plutonium breeder reactor. The SPF was
designed to assist in disposing of the remaining radioactive
sodium from the reactor in an ecologically safe way. The
Kazakhstani government committed to funding the SPF,s
maintenance after its construction, but on November 5,
representatives of the government of Kazakhstan said they had
received enough funding only to maintain the facility for one
or two years. The contractor that had overseen efforts to
build and fund the facility, the National Nuclear Technology
Safety Center (NTSC), requested U.S. assistance in lobbying
the government of Kazakhstan for more budgetary assistance in
the long-term. If the government of Kazakhstan does not
properly maintain the SPF, the sodium could pose a future
environmental hazard. END SUMMARY.

CONSTRUCTION COMPLETED AT U.S.-FUNDED FACILITY

4. (SBU) On November 5, U.S., UK, and Kazakhstani officials
celebrated the construction of the $3.35 million U.S.
government-funded sodium processing facility (SPF) in Aktau.
Completing the SPF was the U.S. government,s final step in
the irreversible decommissioning of the BN-350 plutonium
breeder reactor. The SPF, modeled on technology used at
Idaho National Laboratory,s Experimental Breeder Reactor, is
designed to process an estimated 56 liters of solidified
residual sodium from the BN-350 reactor into sodium
hydroxide. The material can then be stored in a safe
condition for long-term storage. The Kazakhstani government
previously committed to building a Kazakhstani-funded
geo-cement stone facility (GSF) in which the sodium hydroxide
solution generated by the SPF would be combined with
blast-furnace slag and solidified in steel drums for
long-term storage. The initial development of geo-cement
stone technology was a collaborative project between the
United States and Kazakhstan. In the second &plant-design8
phase, the United Kingdom has been providing technical
assistance.

SUB-CONTRACTOR MAEC CAUSED NUMEROUS DELAYS

5. (SBU) Construction of the U.S. project, which began in
March 2004, was completed by the target date of November
2008. During construction, however, MAEC-Kazatomprom often
balked at implementing orders from the U.S. government,s
Kazakhstani primary contractor, NTSC, causing project delays.
Since the BN-350 reactor and SPF are located on its
territory, MAEC is responsible for assisting NTSC to procure
funds to maintain the SPF. However, given MAEC,s resistance
to NTSC guidance in the past, Executive Director Irina
Tazhibayeva expressed concern about being able to secure
funding resources to maintain the SPF until the GSF is
complete.

LONG-TERM PROSPECTS FOR SPF MAINTENANCE FUNDING UNCLEAR

6. (SBU) Tazhibayeva told U.S. officials that NTSC worked
carefully with MAEC to put together a detailed funding
request for MEMR. MEMR, in turn, passed this proposal to the
Ministry of Budget and Planning, which reportedly denied the
proposal due to the effects of the financial crisis, but gave
MAEC &plan of priority measures8 (PPM) funding, sufficient
to maintain the facility for one or two years. Marat
Nurgaziyev, Kazatomprom,s Deputy Director of Labor and
Safety, stated that &any funding, other than PPM funding,

ASTANA 00002298 002 OF 002


would be difficult to obtain, even in 2010.8 The current
reality is in stark contrast to previous expectations.
NTSC,s Tazhibayeva told U.S. officials that Kazakhstan,s
former Minister of Energy and Mineral Resources, Baktykozha
Izmukhambetov, made commitments to use Kazakhstani government
funds to maintain the sodium processing facility.

FUNDING OUTLOOK FOR THE GEO-CEMENT STONE FACILITY BLEAK

7. (SBU) The most serious impact will be on construction of
the Geo-cement Stone Facility. Although Alexandr
Onichshenko, Director of the primary contractor for the GSF,
stated PPM funding was adequate for completing the GSF,s
design, it is not enough to build the facility. Under
Izmukhambetov, Tazhibayeva indicated MEMR had given
assurances that Kazakhstan would definitely build the
Geo-cement Stone Facility by 2012, but at the November 5
meeting, one Kazakhstani official called the project
&tentative.8 Nurgaziyev stated that &as for actual work
on the Geo-cement Stone Facility, we will have to develop
plans for 2009-2010, and when the PPM budget is approved next
year, we will see if it is possible.8 Tazhibayeva requested
that the U.S. and U.K. assist NTSC, MAEC-Kazatomprom and MEMR
to request adequate funding for the SPF and GSF facilities
from the Ministry of Budget and Planning. In an indication
of the relative lack of importance of these projects to the
Kazakhstani government, the highest ranking attendees were
MEMR Representative and Deputy Chairman of the Kazakhstan
Atomic Energy Agency Alexander Kim, Deputy Director of
MAEC-Kazatomprom Andrey Mogilin and Kazatomprom,s Deputy
Director of Labor and Safety Marat Nurgaziyev.

UK CONCERNED ABOUT LACK OF KAZAKHSTANI FUNDING

8. (SBU) The UK Embassy,s Deputy Head of Mission, Michael
Welch, agreed that it is in the best interests of all three
countries (the United States, the United Kingdom and
Kazakhstan) to complete the SPF and GSF facilities as soon as
possible. In his remarks at the November 5 meeting and the
press ceremony, Welch emphasized the significant investments
the UK government had made in these projects, and stressed
that the UK government hopes to see the projects brought to
completion with Kazakhstani funding as soon as possible.
Tazhibayeva intends to make an additional request for funding
in early December 2008, and asked for assistance in
encouraging Kazakhstani government support.

9. (SBU) ACTION REQUEST: Post requests guidance from
Washington on seeking additional funding from the government
of Kazakhstan on the Sodium Processing and Geo-cement Stone
Facilities, especially given existing unfulfilled requests to
fund other BN-350 projects, in particular, the $25 million
dollars that the Government of Kazakhstan has already
committed to spend for the transfer of spent fuel in fiscal
year 2009. In particular, post requests that the Department
consider coordinating with London before directing the U.S.
and British Ambassadors in Astana to make a joint demarche on
this subject. Per reftel, the U.S. government already made a
supplemental request, submitted in letters sent in September
2008 from then-Ambassador Ordway to the Minister of Energy
and Mineral Resources Sauat Mynbayev and Prime Minister Karim
Masimov, for $15 million dollars to purchase casks for the
transfer of BN-350 spent fuel. END ACTION REQUEST.
HOAGLAND

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