By Michael B. Congdon & Michelle S. Dash
The Ukrainian Government’s plans to close the Chornobyl nuclear power plant (ChNPP) next year will provide several commercial opportunities for U.S. firms to work in the region surrounding the plant. The city of Slavutych and the ChNPP, about 35 miles to the east of the city, occupy a special niche in Ukraine, and the links between them are strong. Slavutych was built immediately after the accident to house the displaced work force of the ChNPP, and the plant continues to be its main source of employment. Slavutych has about 28,000 residents that have a wide range of engineering, construction, and scientific skills. It is also located about an hour’s drive from Chernihiv, a city of over 300,000.
Opportunities for U.S. firms will come from grant funds administered by the European Bank for Reconstruction and Development (ebrd) for work at Chornobyl and from Ukrainian Government incentives.
The ebrd is administering G-7, other country, and private donor-financed technical work related to the closure of Chornobyl. The contractors for this work are being selected through a competitive process. In addition, the Ukrainian Government, recognizing the need to attract greater foreign investment into the region to offset losses from the closure of Chornobyl, has designated Slavutych a special economic zone and, along with the city administration, has targeted several projects for foreign investment.
EBRD-Administered Projects
After the 1986 accident, Chornobyl workers hastily constructed a “shelter” to enclose the radioactive debris and fuel from the destroyed Unit 4 reactor. The shelter structure has been deteriorating, and in 1996, an international team of experts prepared a Shelter Implementation Program (sip) to place the shelter and its contents in an environmentally safe condition. The G-7 nations selected the ebrd to administer the estimated $760 million, 7.5 year project, and the Chornobyl Shelter Fund was established to collect and manage funds for the project. To date, the international community has pledged nearly $400 million to the project.
The contracts for the Chornobyl Shelter Fund and for decommissioning work are open to U.S., European, Japanese, and other companies. Currently, several Western companies are working on the shelter, and a three-party consortium that includes the U.S. firms Bechtel and Battelle Memorial Institute was awarded the sip Project Management Unit (pmu) contract. Morrison Knudsen has been awarded a contract to define structural stabilization alternatives for the deteriorating shelter and General Atomics (San Diego, CA) is the contractor performing fuel characterization and studying technologies for removal. Contract commitments for shelter activities are expected to grow to over $160 million by mid-2000. Additional pledges are being sought to support the estimated project completion by 2007.
The Ukrainian national nuclear energy generating company Energoatom intends to use the proceeds of the Chornobyl Shelter Fund to purchase goods and work contracts during the next 12 months. These procurements are directed at completing shelter roof stabilization work; completing early biddable projects, including conceptual design studies, waste management studies, and upgrades to safety and infrastructure; and launching the next phase of the sip. These specific procurements have been the subject of recent information meetings hosted by the ebrd in Kyiv and London. More information on the procurements will be posted on the ebrd website at www.ebrd.com. The sip Project Management Unit will conduct the tendering process.
Investment Opportunities in Slavutych
The Ukrainian Government has designated the city of Slavutych as a special economic zone through January 2010. The zone, to be administered by the Ministry of Energy, provides for exemptions on payment of taxes and other fees on imports, raw materials, tools, equipment, profits, and land use. Exemptions are subject to certain criteria, including total number of employees, percentage of employees who are former Chornobyl workers, and business volume. The administrators of the Slavutych special economic zone also will assist in organizing training and retraining programs and in acquiring licenses and registrations.
Companies interested in taking advantage of special zone status can choose from a variety of investment opportunities identified by Slavutych entrepreneurs and administrators. In addition, there is a multinational effort in Slavutych to develop science-based industry. Two specialized labs have been created that provide U.S. firms with information management, scientific research and user facilities, and technology development services. English language training has been provided to many potential workers and continues aggressively.
Slavutych is eager to attract foreign investment and may offer U.S. firms interesting opportunities in laser technology, high-technology ventures, construction, and transportation. The ebrd-administered Chornobyl projects will bring millions of dollars into the region.
Michael B. Congdon is a program manager with Pacific Northwest National Laboratory (pnnl), which is operated by Battelle for the U.S. Department of Energy.
Michele S. Dash is a program administrator with pnnl and is stationed at the Department of Energy’s Office of International Nuclear Safety and Cooperation.
Key Contacts FOR SLAVUTYCH
EBRD in London
Gene R. Harris, Senior Commercial Officer
Tel: +44 (171) 588-4027/28, 338-7490
Fax: +44 (171) 588-4026, 338-6487
Email: HarrisG@EBRD.com
EBRD in Ukraine
Olexandr Slavis
Chernobyl Shelter Fund
Tel: +380 (44) 464‑0132
Fax: +380 (44) 464‑0813
Tenders
Paul Emch, Procurement Manager
SIP Project Management Unit
Tel: +380 (44) 792-8603
Fax: +380 (44) 792-8838
Slavutych-based Organizations
Valentina A. Darnopyh, Director,
Slavutych Business Development Agency
Tel: +380 (44) 792-6713
Tel/Fax: +380 (44) 792-7413
Evgeniy Garin
Slavutych Laboratory of International
Research & Technology
Tel/Fax: +380 (44) 792-3016