At the March conference, Senator Pete Domenici (R-NM) outlined a proposalto expand funding of the U.S.-Russian Nuclear Cities Initiative (NCI) inexchange for Russian establishment of verifiable milestones in reducingits nuclear complex.  This proposal was subsequently passed as anamendment to the FY 2001 Defense Authorization Act and authorizes $30 millionin FY 2001 funding for the NCI.  This level of funding will send asignal that the U.S. is serious about working with Russia to stabilizeits nuclear cities, and will help stimulate Russian development of a transparent,milestone-based complex reduction plan.

On June 27-29 a workshop was held in Obninsk, Russia where more detailson Minatom’s restructuring and conversion plans were shared.  EightU.S. participants(1)  heard presentations from Minatomrepresentatives, Russian nuclear weapon facility scientists and managers,and local Russian government officials from six nuclear cities on theirplans.(2)

The following highlights from the June meetings supplement the enclosedMarch conference report, and are provided to inform congressional debatesabout the role of U.S. assistance in helping Russia transform its nuclearcomplex.  A more detailed report of the results from the June meetingsis being prepared.

The situation in at least six of the nuclear cities is still serious

• The three cities currently engaged by the Nuclear Cities Initiative donot have enough commercial income to facilitate their downsizing.
• Three warhead assembly/disassembly cities may be in the most desperatestraits, but conversion and downsizing work at these facilities is currentlylimited.
• Four cities are supported largely by providing uranium-enrichment or nuclearreprocessing services and by blending down excess weapons uranium for saleto the U.S. – services that could decrease in the future.

• 10 plutonium-production reactors are being dismantled, with the rest beingconverted or replaced.
• Half of the warhead and fissile component-production facilities are beingshut down.
• 500,000 square feet of former warhead-production space is being cleanedout for NCI projects in Sarov.
• Three buildings have been eliminated from the weapons roster in Snezhinsk;more are planned.
• Considerable downsizing has also occurred at nuclear weapons R&D andproduction facilities outside of the ten closed cities.  The Russiangovernment has decided to terminate nuclear weapons component productionat a large manufacturing complex in Novosibirsk and nuclear weapons workhas been greatly reduced at Minatom’s weapon design institute in Moscow. Other facilities, shops, and buildings that are no longer needed for defensework are being cleaned out and made available for civilian production.

• In 1999, a Minatom fund of $50 million supported 26 conversion projects,chosen by a newly established competitive process.  Most of this moneywas derived from payments to Russia for blended weapon uranium under the“HEU Deal.”
• The Russian government budget allocated a separate fund of $71 millionto support social infrastructure and economic conversion in the closedcities during 1999.
• Major successes include a factory that produces 10 million video and audiocassettesa year in a converted uranium-enrichment facility.
• In addition to the Russian government’s plans for defense conversion, citygovernments in the closed cities are playing an increasingly independentand constructive role in job creation and infrastructure development.

• The Open Computing Center in Sarov is producing software on a contractualbasis.
• Nonproliferation analysis centers in Sarov and Snezhinsk have been created.
• The European Bank for Reconstruction and Development (EBRD) has openedsmall-business loan offices in Sarov, Snezhinsk and Zheleznogorsk.
• International development centers are helping excess Russian weapon scientistsdevelop new business proposals in Zheleznogorsk and Snezhinsk.
• A rich menu of conversion proposals has been developed by the cities andtheir nuclear facilities, and some are under negotiation with commercialpartners.

(2) - Presentations were delivered bythe closed cities of Sarov (city government, the Institute of ExperimentalPhysics, and the Avangard warhead assembly/disassembly combine); Novouralsk(city government and uranium-enrichment combine); Zheleznogorsk (city governmentand plutonium-production combine); Zelenogorsk (city government and uranium-enrichmentcombine); Ozersk (city government); Snezhinsk (city government).