# Emerging opportunities in Slavutych

 

By Michael B. Congdon & Michelle S. Dash

 

The Ukrainian Government’s plans to close the Chornobylnuclear power plant (ChNPP) next year will provide several commercialopportunities for U.S. firms to work in the region surrounding the plant. Thecity of Slavutych and the ChNPP, about 35 miles to the east of the city, occupya special niche in Ukraine, and the links between them are strong. Slavutychwas built immediately after the accident to house the displaced work force ofthe 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 drivefrom Chernihiv, a city of over 300,000.

 

Opportunities for U.S. firms will come from grant fundsadministered by the European Bank for Reconstruction and Development (ebrd) for work at Chornobyl and fromUkrainian Government incentives. 

 

The ebrd isadministering G-7, other country, and private donor-financed technical workrelated to the closure of Chornobyl. The contractors for this work are beingselected through a competitive process. In addition, the Ukrainian Government,recognizing the need to attract greater foreign investment into the region tooffset losses from the closure of Chornobyl, has designated Slavutych a specialeconomic zone and, along with the city administration, has targeted severalprojects for foreign investment. 

 

EBRD-Administered Projects

After the 1986 accident, Chornobyl workers hastilyconstructed a “shelter” to enclose the radioactive debris and fuel from thedestroyed Unit 4 reactor. The shelter structure has been deteriorating, and in1996, an international team of experts prepared a Shelter ImplementationProgram (sip) to place theshelter and its contents in an environmentally safe condition. The G-7 nationsselected the ebrd to administerthe estimated $760 million, 7.5 year project, and the Chornobyl Shelter Fundwas established to collect and manage funds for the project. To date, theinternational community has pledged nearly $400 million to the project. 

 

The contracts for the Chornobyl Shelter Fund and fordecommissioning work are open to U.S., European, Japanese, and other companies.Currently, several Western companies are working on the shelter, and athree-party consortium that includes the U.S. firms **Bechtel** and **BattelleMemorial Institute** was awarded the sipProject Management Unit (pmu)contract. **Morrison Knudsen** has beenawarded a contract to define structural stabilization alternatives for thedeteriorating shelter and **GeneralAtomics** (San Diego, CA) is the contractor performing fuel characterizationand studying technologies for removal. Contract commitments for shelteractivities are expected to grow to over $160 million by mid-2000. Additionalpledges are being sought to support the estimated project completion by 2007.

 

The Ukrainian national nuclear energy generating company **Energoatom**intends to use the proceedsof the Chornobyl Shelter Fund to purchase goods and work contracts during thenext 12 months.**These procurementsare directed at completing shelter roof stabilization work; completing earlybiddable projects, including conceptual design studies, waste managementstudies, and upgrades to safety and infrastructure; and launching the nextphase of the sip. These specificprocurements have been the subject of recent information meetings hosted by theebrd in Kyiv and London. Moreinformation on the procurements will be posted on the ebrd website at *www.ebrd.com*.The sip Project Management Unitwill conduct the tendering process.******

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Investment Opportunities in Slavutych

The Ukrainian Government hasdesignated the city of Slavutych as a special economic zone through January2010. The zone, to be administered by the Ministry of Energy, provides forexemptions 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 formerChornobyl workers, and business volume. The administrators of the Slavutychspecial economic zone also will assist in organizing training and retrainingprograms and in acquiring licenses and registrations. 

 

Companies interested in taking advantage of special zonestatus can choose from a variety of investment opportunities identified bySlavutych entrepreneurs and administrators. In addition, there is amultinational effort in Slavutych to develop science-based industry. Twospecialized labs have been created that provide U.S. firms with informationmanagement, scientific research and user facilities, and technology developmentservices. English language training has been provided to many potential workersand continues aggressively.

 

Slavutych is eager to attract foreign investment and mayoffer U.S. firms interesting opportunities in laser technology, high-technologyventures, construction, and transportation. The ebrd-administered Chornobyl projects will bring millions ofdollars into the region. 

 

*Michael B. Congdon is a program managerwith **Pacific Northwest NationalLaboratory (pnnl)**, which isoperated by Battelle for the U.S. Department of Energy.*

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*Michele S.Dash is a program administrator with **pnnl**and is stationed at theDepartment of Energy’s Office of International Nuclear Safety and Cooperation.*

 

KeyContacts 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: [email protected]**

* *

*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****

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*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**