Kiev Drops Nuclear Deal With Iran

After months of diplomatic pressure from the United States, Ukraine on Friday announced that it will cancel plans to supply turbines for a nuclear reactor under construction in Iran.

“We decided to refrain from participation in the . . . project,” Ukrainian Foreign Minister Hennady Udovenko said. “It wasn’t an easy decision.”

The announcement, which came during a one-day visit by Secretary of State Madeleine Albright to the Ukrainian capital, constituted a victory in the U.S. campaign to isolate Iran and deprive it of access to sensitive weapons technology.

Ukraine also agreed to accept controls on exports of its nuclear and missile technology--including de facto American veto power--that will allow U.S. companies to compete for work in the large, potentially lucrative areas of nuclear and space technology.

Westinghouse Electric, for example, is reportedly interested in bidding on a $1.2-billion contract to complete two Soviet-era reactors in the country, but the firm had been blocked by U.S. government concerns over possible proliferation.

The agreements “represent a major stride forward in a strategic partnership between Ukraine and the United States,” Albright told reporters gathered to watch the accords initialed at the presidential palace here. She was on the first stop of a seven-nation tour.

Although its economy is stumbling badly, Ukraine has considerable potential as a political and commercial partner. It has the fifth-largest population in Europe, generates half its electricity with nuclear energy and, although it completed the transfer of its Soviet-era nuclear warheads to Russia three years ago, still has advanced SS-18 strategic missiles that can be used to launch satellites.

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The durability of Friday’s diplomatic success for the U.S. remained uncertain, however.

Russia, which has the overall contract for building the Iranian reactor, located at Bushehr, reacted with defiance: It vowed to find another turbine supplier and press on with the project, which is expected to earn Moscow as much as $1 billion.

“Ukraine is one of the subcontractors and, as such, can be easily replaced by another,” Russian Atomic Energy Ministry spokesman Vitaly Nasonov told the Itar-Tass news agency. “Machinery of this kind can be manufactured at Russian enterprises.”

But a prominent nuclear technology expert in Russia’s Duma, the lower house of parliament, said Ukraine’s retreat from the project could seriously delay, if not scuttle, the nuclear plant construction.

“Ukraine’s refusal to supply the turbines greatly jeopardizes the project and makes it almost impossible,” Sergei S. Mitrokhin said. “Today’s Russia is struggling through a very difficult period of economic dislocation and simply does not have the funds or the facilities to make these turbines in the foreseeable future.”

Senior U.S. officials traveling with Albright believed that the Ukrainian action will lead to substantial delays on a project initially conceived when Shah Mohammed Reza Pahlavi was still in power, begun by the German company Siemens, delayed after the 1979 Islamic Revolution, then taken over by Russia three years ago.

Responsibility for the turbines was eventually handed over to a Ukrainian company.

Ukrainian President Leonid D. Kuchma said Friday that the turbines--if produced--would have been worth $45 million, but he indicated that substantive work had not yet begun.

Whatever the outcome, the moves underscore the difficulty of isolating a nation like Iran in an increasingly interconnected world.

Friday’s accord marks the second time in six months that U.S. diplomatic pressure has deprived Iran of potentially important nuclear-related technology. In October, China pledged to refrain from providing further nuclear technology to Iran or entering new nuclear cooperative agreements with Tehran.

But Washington’s latest success in keeping Iran isolated is not just uncertain--it also comes at a price.

It has added new strains to U.S. relations with Moscow, which views the Bushehr project as part of a larger effort to reconstruct its image as an important player in the Middle East and as an international supplier of nuclear technology.

Igor Ignatiev, spokesman for Ivan P. Rybkin, the newly appointed deputy prime minister in charge of relations with former Soviet republics, described the U.S. government’s role in persuading Ukraine to drop its involvement in the Bushehr project as “one of many obvious steps by the American administration that have been dictated by its own economic interests.”

In an attempt to compensate Ukraine for the loss of a major export contract, the U.S. has agreed to dispatch an “expert mission” to explore opportunities for potential investment. Washington has also expressed readiness to contribute up to $6 million to finance the country’s Science and Technology Center--an amount more than Ukraine itself spends.

Ukraine is now the largest recipient of U.S. foreign aid outside the Middle East, although allegations by several American investors of serious local corruption have raised concern in Congress and questions about the level of future aid funding.

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Marshall reported from Kiev and Williams from Moscow.