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Doc. 8450
22 June 1999
Activities of the EBRD and the transition in central and eastern Europe 1
Contribution
Committee on Science and Technology
Rapporteur: Mr Claude Birraux, France, Group of the European People's Party
Introduction
The Council of Europe Parliamentary Assembly is the only parliamentary assembly to hold a debate on the activities of the EBRD. It therefore has a duty to concern itself with specific areas of the Bank's activity as it has been doing. The head of nuclear safety comprises the operation of the Nuclear Safety Account (NSA) and the Chernobyl Shelter Fund.
The meeting which the Committee on Science and Technology had with the EBRD Nuclear Safety Team officials on 9 June 1999 at the very kind invitation of the Bank provided valuable information on the Nuclear Safety Account and the Chernobyl Shelter Fund, and made for frank dialogue on generally less well-known issues.
The Nuclear Safety Account
The Nuclear Safety Account is a separate account administered by the EBRD, set up at the behest of the G-7 in 1993 and not impinging in any way on the Bank's other economic measures. The operating methods of the Account were presented in the written contribution to the debate on the activities of the EBRD in 1995 (Doc. 7576).
As of 31 December 1998, pledges to the NSA totalling ECU 260.6 million had been made by the European Community and 14 countries, viz. Belgium, Canada, Denmark, Finland, France, Germany, Italy, Japan, the Netherlands, Norway, Sweden, Switzerland, the United Kingdom and the United States of America (Annex 1). At its December 1998 meeting, the NSA Assembly of Contributors requested the Bank to extend NSA operations until 2002.
In the activities of the NSA, priority is given to those reactors presenting a high level of risk that can nevertheless be significantly reduced by short-term safety improvement measures. The EBRD accordingly placed emphasis on material improvement of existing RBMK (Chernobyl and Ignalina type) and VVER 440/230 (Kozloduy type) reactors and on the purchase of equipment, while making an effort to minimise spending in collateral areas such as the conduct of expensive appraisals or various studies. Projects in hand at 31 December 1998 concern reactors located in Bulgaria, Lithuania, Russia and Ukraine (Annex 2).
The Chernobyl Shelter Fund
The Chernobyl Shelter Fund, also independent from the other EBRD funds, dates from the decision at the Denver Summit of 1997 by the G-7, the European Community and Ukraine to set up a supplementary multilateral funding mechanism to assist Ukraine in transforming the existing Chernobyl sarcophagus into a safe and environmentally stable system. At 31 December 1998, the EBRD had concluded contribution agreements totalling ECU 335 million with the European Community and 20 countries, viz. Austria, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Kuwait, Luxembourg, Netherlands, Norway, Spain, Sweden, Switzerland, Ukraine, the United Kingdom and the United States of America. In addition, Iceland, Poland, Portugal and the Slovak Republic donated a total of ECU 3 million (Annex 3).
Following the Ukrainian parliament's ratification of the Framework Agreement between Ukraine and the EBRD in February 1998, four agreements were signed and ECU 154 million were allocated to the initial phase of the Shelter Implementation Plan. Six other major contracts forming the backbone of the Shelter Implementation Plan were awarded between April and November 1998. Ukraine's in-kind contribution by providing project infrastructure for the Shelter Implementation Plan is of course critically important.
Since present contributions are estimated to suffice only up to the end of the year 2000, in order to ensure the continuity of the project after that date, additional fund-raising remains a high priority for the EBRD. The Shelter Implementation Plan (scheduled duration 8 to 9 years) will cost an estimated total of USD 760 million to complete.
Critical appraisal
The operation of the Nuclear Safety Account calls for a number of comments. It was designed to fund immediate measures for near-term technical safety improvements in nuclear power plants considered unsafe. It was decided that these plants should later be shut down permanently. However, it transpires that for one thing the improvement operations have lasted much longer than was foreseen, besides which the pace of energy sector reforms in the countries concerned is too slow. This results in paradoxical situations. For instance, the safety improvement procedures at the Ignalina nuclear power plant in Lithuania were not completed until the end of last year. Voices are raised to the effect that the closure of the plant, due to follow in accordance with the initial decision, means that the upgrading work just completed is pointless; it is argued that extending the life of the plant would be the best solution at this stage. This is quite untrue, firstly because such a measure would contravene the agreements which made the safety improvement operations possible, but principally because the accident risks steadily increase with every passing day. It should in fact be realised that RBMK reactors are more thoroughly known today and have in-built design defects.
The Court of Auditors of the European Communities recently made it clear that European Union procedures are too lengthy and too slow considering the situation of urgency recognised as applying to certain nuclear power plants. To use a trivial comparison, these procedures seem akin to an inquiry which might be ordered into the procurement of fire hoses before allowing the firemen to extinguish a fire which is raging before their eyes.
It is regrettable that the EBRD, like the European Union, did not adopt specific rules for interventions whose urgency everyone appreciated. During our meeting at the Bank's headquarters, the officials assured us that the actions of the EBRD concerned equipment, hardware, with reasonable time lapses and limited reliance on intermediary agencies such as design offices and consultants.
These explanations did not really convince the rapporteur, who has closely monitored the development of the Nuclear Safety Account from the outset.
True enough, co-ordination of the G-7's initiatives relayed by the G-24, not forgetting the European Union's PHARE and TACIS programmes and trying not to displease the Assembly of Contributors, is a tall order.
This regrettably detracts from the intelligibility and clarity of the Bank's action as manager of the NSA. The breakdown of negotiations on completion of the Mochovce power plant in Slovakia to standards approaching Western ones, like the discussions still in progess concerning the shutdown of Chernobyl in the year 2000, make it difficult send out a strong message to countries which have RBMK or first-generation VVER 230/400 power plants.
There is no coherent concept as to the future of these Russian plants, which creates major problems and makes them no less dangerous even though no serious accident or incident has occurred.
Having regard to the disorganisation of the economy and the energy sector, there is even an aggravated risk of their life-span being extended beyond what they were designed for. There is no immediate prospect of closure of those posing the greatest risks, despite their present state of dilapidation.
Prospective accession to the European Union - at least for the first wave of candidates - does not act as a lever to get things moving.
Under the Marxist regime, production was paramount. We should constantly recall that the culture of safety propounded in Europe puts safety before any other consideration. This inversion of the scale of values also reflects the advance of democracy in the countries of Central and Eastern Europe, something which our Assembly should never tire of repeating.
Committee for report: Committee on Economic Affairs and Development
Committee for contribution: Committee on Science and Technology
Contribution approved by the committee on 22 June 1999