WASHINGTON (Reuters) - The United States has made substantial progress on a long-delayed project to dispose of 68 tons of Russian and U.S. weapons-grade nuclear fuel and expects to conclude a multinational accord with $1 billion in financing by year's end, a senior official said on Wednesday.
"I believe we could, by the end of 2003, achieve donations of over one billion dollars or more," U.S. fissile material negotiator Michael Guhin told reporters after a presentation at the American Enterprise Institute.
Although the Bush administration has promoted the project as an effective way to rid the world of a dangerous Cold War legacy, critics say the approach will increase the risks of nuclear theft by terrorist groups or rogue states.
The plan is to have the United States and Russia each take 34 tons of separated plutonium that could be easily used as fuel for nuclear weapons and turn it into mixed oxide fuel (MOX) for use in commercial nuclear power plants.
It was arranged by then-President Bill Clinton and Russian President Vladimir Putin in September 2000 as a means of dealing with the residue of thousands of nuclear weapons set for dismantlement after the fall of communism.
Under the strategy, which has been under discussion since 1995, the United States intends to build a MOX fabrication facility at Savannah River, South Carolina, and a comparable facility is planned for Russia.
The U.S. program is expected to cost $4 billion while the Russian program is projected at $2 billion, including half for construction and half for operational expenses.
After Russia said it could not afford to finance the facility on its own, Washington worked with its partners in the Group of Eight industrial nations -- France, Britain, Germany, Italy, Canada, Russia and Japan -- to underwrite the project.
So far, all the G8 members but Germany have announced contributions, which now total $400 million. The U.S. pledge toward the Russian project is also $400 million but officials predict non-U.S. contributions, including an amount from Russia, ultimately will constitute more than half of the cost.
The United States has been negotiating a multinational agreement to cover management and financing of the Russian project and expects to complete that by year's end, although a major dispute continues with Moscow over liability issues, said a senior official who spoke anonymously.
"We have made substantial progress this year on how you manage this program internationally," he said, adding that construction is expected in 2004.
U.S. officials expect the G8 summit in Evian, France, in June will issue a new statement endorsing the project.
But Victor Gilinsky, a former member of the Nuclear Regulatory Commission, said "recycling plutonium in civilian reactors is a particularly bad answer" to the problem of growing stocks of weapons grade plutonium.
Especially in Russia, the materials would be susceptible to theft and loss as they were moved from storage to the fabrication facilities and then to nuclear power reactors, he said.
He also expressed concern the United States would be subsidizing commercial interests and bureaucracies in both countries that would seek to make further profit by recycling surplus plutonium into an expanding nuclear power industry.
"The overall effect of this in my view is going to be to undermine long-standing U.S. nonproliferation policy," said Gilinsky of the Nonproliferation Policy Education Center.
Some critics have argued that it would be safer for the United States and Russia to mix the weapons-grade plutonium with radioactive waste and secure it where it is now stored.
But the senior U.S. official said this is not an option because Russia insisted on being able to recycle the plutonium so as to earn revenue from it. ((Reporting by Carol Giacomo, editing by Bette O'Connor; Reuters messaging: carol.giacomo.reuters.com@reuters.net)
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