Special Report No 25/98 concerning operations undertaken by the European Union in the field of nuclear safety in central and eastern Europe (CEEC) and in the new independent States (NIS) (1990 to 1997 period) together with the Commission's replies (submitted pursuant to Article 188c(4)(2) of the EC Treaty)
Date: 1998-11-12
Institutions: European Court of Auditors
Subjects: Central and Eastern European countries, Commonwealth of Independent States, EU programme, European Court of Auditors, activity report, nuclear safety

9.2.1999

EN

Official  Journal  of  the  European  Communities

C  35/1

I

(Information)

COURT  OF  AUDITORS

SPECIAL  REPORT  No  25/98

concerning  operations  undertaken  by  the  European  Union  in  the  field  of  nuclear  safety  in
central  and  eastern  Europe  (CEEC)  and  in  the  new  independent  States  (NIS)  (1990  to  1997
period)  together  with  the  Commission’s  replies

(submitted  pursuant  to  Article  188c(4)(2)  of  the  EC  Treaty)

(1999/C  35/01)

FOREWORD

After  the  completion  by  late  October  of  the  bilateral  discussion  procedure  relating  to  this  report,  on  10
November the Court then received new additions to the replies from the Commission, some of which seem
to  it  to  be  questionable.

However,  so  that  publication  of  its  report  is  not  held  up  indefinitely,  the  Court  decided  to  adopt  it
definitively at its meeting of 12 November 1998, regardless of the differences of opinion that still prevail on
certain  points.

C  35/2

EN

Official  Journal  of  the  European  Communities

9.2.1999

LIST  OF  ACRONYMS  AND  ABBREVIATIONS

ENEA —  The  European  Nuclear  Energy  Agency  belonging  to  the  OECD  (Organisation  for  Economic

Cooperation  and  Development)

IAEA

—  International Atomic Energy Agency (international organisation under the aegis of the United

Nations)

EBRD

—  European  Bank  for  Reconstruction  and  Development

DG  IA —  Commission  Directorate-General  responsible  for  external  relations  with  CEECs  and  the  NIS

Euratom —  European  Atomic  Energy  Community

ISTC

—  International  Science  and  Technology  Centre.  It  was  established  in  1992  and  became
operational in 1994. Its purpose is to prevent an outflow of engineers previously employed in
the  military  sector

NIS

—  new  independent  States  of  the  former  Soviet  Union

NSA

—  Nuclear  safety  account.  The  EBRD  opened  the  special  NSA  account  in  March  1993  for  a
period of three years. Its operation was subsequently extended for a further three-year period
in  April  1996

NUSAC —  G24  Nuclear  Safety  Assistance  Coordination.  Coordination  unit  set  up  by  the  Commission

CEECs —  Central  and  East  European  countries

PHARE —  action  plan  for  coordinated  aid  to  Poland  and  Hungary  (subsequently  extended  to  the
remainder  of  the  CEECs).  It  comprises  programmes  financed  by  the  EU  since  1990  to  assist
with  economic  restructuring  in  the  CEECs

RBMKs —  Soviet-designed,  graphite-moderated  boiling-water  reactors  with  no  secondary  circuit  or
containment building used to produce plutonium for military purposes. See also paragraph 14
of  Annex  1

TACIS —  technical  assistance  to  the  Commonwealth  of  Independent  States.  Programmes  financed  by
the  EU  since  1991  to  assist  the  NIS  with  their  transition  to  a  market  economy

TPEG

—  Twinning  Programme  Engineering  Group,  or  the  EEIG  (European  Economic  Interest
Grouping),  established  on  24  July  1992  in  response  to  the  Commission’s  desire  to  rely  on  a
single  cooperation  structure  set  up  by  EU  electricity-generating  companies  responsible  for
pressurised-water  nuclear  reactors.  The  TPEG  comprises  EDF  (France),  Tractebel  (Belgium),
Magnox  (United  Kingdom),  DTN  (Spain),  VGB  (representing  the  German  electricity
companies  RWE,  KKE  and  GKN  Gmbh),  ENEL  (Italy),  GKN  (Netherlands)  and  IVO/TVO
(Finland)

EU

—  European  Union

USTC

—  Ukrainian  equivalent  of  the  ISTC

VVERs —  Soviet-designed,  pressurised-water  nuclear  reactors  with  a  secondary  circuit  and  containment

building  (excluding  the  VVER  440-230  reactor).  See  also  paragraph  14  of  Annex  1

WANO —  World  Association  of  Nuclear  Operators

9.2.1999

EN

Official  Journal  of  the  European  Communities

C  35/3

CONTENTS

Paragraph
reference

Page

1.  INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.1 — 1.7

PHARE  and  TACIS  nuclear-safety  programmes . . . . . . . . . . . . . . . . . . . . . .

1.1 — 1.5

The  Court’s  audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.6 — 1.7

2.  SUMMARY  OF  THE  OBSERVATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.1 — 2.13

The  European  Union’s  approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.1 — 2.3

Management  of  the  operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.4 — 2.8

Mobilisation  of  aid  and  the  results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.9 — 2.13

3.  THE  EUROPEAN  UNION’S  APPROACH . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.1 — 3.20

European  integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.1

Objectives  and  resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.2 — 3.4

Decommissioning  and  dismantling  of  reactors . . . . . . . . . . . . . . . . . . . . . . .

3.5 — 3.7

Supply  of  equipment

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.8 — 3.9

Non-industrial  aspects  of  operational  safety . . . . . . . . . . . . . . . . . . . . . . . . .

Euratom  loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.10

3.11

Multilateral  coordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.12 — 3.20

4.  MANAGEMENT  OF  THE  OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.1 — 4.20

Invitations  to  tender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.1 — 4.2

Supply agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.3 — 4.11

The  Commission’s  monitoring  of  the  operations . . . . . . . . . . . . . . . . . . . . .

4.12 — 4.16

On-the-spot  monitoring  of  programmes . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.17 — 4.18

Cost  of  management

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.19 — 4.20

5.  MOBILISATION  OF  AID  AND  THE  RESULTS . . . . . . . . . . . . . . . . . . . . . .

5.1 — 5.23

Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5.1 — 5.5

Budgets  allocated  for  on-site  activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5.6 — 5.7

Delays  and  the  stage  reached  in  implementing  the  operations . . . . . . . . . .

5.8 — 5.14

Assistance  to  the  safety  authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5.15 — 5.17

Safety  studies  and  analyses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5.18 — 5.20

Actual  mobilisation  of  the  appropriations . . . . . . . . . . . . . . . . . . . . . . . . . .

5.21 — 5.23

6.  CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.1 — 6.10

Overall assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.1 — 6.2

Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.3

Efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.4 — 6.6

Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.7 — 6.9

Transparency  of  the  operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.10

Annex  1  —  Background  to  the  PHARE  and  TACIS  nuclear-safety  programmes . . . . . . . . . . .

Annex  2  —  Operations  audited  and  visits  carried  out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The  Commission’s  reply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4

4

8

8

8

9

9

10

10

10

10

11

11

11

11

12

12

12

13

14

14

15

15

16

17

20

20

21

22

22

22

23

23

23

25

31

39

C  35/4

EN

Official  Journal  of  the  European  Communities

9.2.1999

1.  INTRODUCTION

PHARE  and  TACIS  nuclear-safety  programmes

1.1. The  accident  at  unit  4  of  the  Chernobyl  nuclear
reactor  in  1986  drew  attention  to  the  importance  of
dealing  with  the  safety  problems  posed  by  the  stock  of
Soviet-designed nuclear reactors. Since 1990 international
aid  has  been  mobilised  under  the  auspices  of  the  G7 (1),
the  United  Nations  (IAEA),  the  OECD  (ENEA),  and  the
EU,  whose  Edinburgh  (1992)  and  Corfu  (1994)  summits
confirmed  the  guidelines  to  be  followed  in  restructuring
the nuclear sector in east European countries and closing
the  Chernobyl  power  plant.  All  of  these  measures  were
intended,  as  stated  by  the  Council  in  its  resolution  of
18  June  1992 (2),  to  help  the  east  European  countries  to
render  their  stock  of  reactors  as  safe  as  western  power
plants.  Throughout  this  period  several  initiatives  were
taken to coordinate international aid, whether by pooling
the  data  available  concerning  existing  aid  programmes
(creation  of  NUSAC  at  the  Commission  in  1992)  or  by
establishing  special  multilateral  financing  instruments
(creation of the NSA in 1993, management of which was
entrusted  to  the  EBRD).  While  the  Court  recognises,  as
the Commission points out in paragraph 5 of the general
comments  introducing  its  replies,  that  the  PHARE  and
TACIS  expenditure  could  not  by  itself  achieve  any  more
than  limited  results,  the  fact  is,  nevertheless,  that  the
prime  responsibility  for  coordinating  the  efforts  made  by
the  countries  of  the  OECD  and  the  other  international
organisations  to  assist  the  CEECs  and  the  NIS  in
the
restructuring 
Commission. This being so, the Court took the view that
it  was  part  of  its  remit  to  examine  how  the  Commission
had  discharged  this  responsibility  and  to  assess  the  scale
of  the  progress  actually  made  on  the  ground.

their  nuclear 

lay  with 

sector 

and 

first 

that 

studies 

technical 

neglected. 

concerning 

operational-safety 

1.2. The 
the
nuclear-powered  electricity-generating  sector  revealed
that the former Soviet system, driven by the nuclear needs
of  the  military  sector,  focused  on  meeting  production
and
requirements 
environmental  matters  were 
These
design-related  and  technical  problems  were  compounded
by  the  need  to  establish  powerful  safety  authorities  that
would be independent of the operators in these countries.
Such  authorities,  acting  as  a  counterweight  to  the
operators  are  considered  to  be  an  essential  precondition
for  safety 
in  all  western  countries.  Owing  to  the
economic  and  social  impact  of  the  remedies  envisaged
and,  in  particular,  the  decommissioning  of  the  most
dangerous  power  plants  (some  RBMK  and  VVER
440-230  reactors),  safety 
improvements  had  to  be
incorporated into an overall strategy for the energy sector
in  east  European  countries,  where  waste  treatment  posed
acute  difficulties,  and  the  nuclear  sector  was  socially  and
economically  important  and  had  therefore  previously
been  given  privileged  treatment  over  other  industrial
sectors.  All  of  these  compelling  factors,  coupled  with
western  economic  interests,  made  intervention  in  this
sector  a  particularly  delicate  matter.

PHARE 

through 

1.3. Against  this  difficult  multilateral  and  sectoral
background,  the  main  features  of  which  are  set  out  in
Annex  1,  since  1990  the  EU  has  allocated  almost
ECU  850  million (3)  to  improving  nuclear  security  and
safety (4)  in  the  CEECs  and  the  NIS,  and  this  resulted  in
payments  totalling  ECU  355  million  by  the  end  of  1997.
Most  Community  aid  has  been  implemented  by  the
Commission 
and  TACIS
its 
programmes,  under  which  a  total  of  ECU  786,1  million,
or  20 %  of  TACIS  commitments  and  2 %  of  PHARE
commitments,  have  been  allocated  to  nuclear  safety.
Table  1  provides  a  breakdown  of  these  commitments  by
recipient  country  and  according  to  the  main  fields  of
action  covered  by  the  related  Commission  decisions.
According  to  the  recipients,  this  financing  covers  only  a
limited  proportion  (a  few  per  cent)  of  the  modernisation
programmes undertaken. On the basis of the information
available, however, it is not possible to quantify the scale
of  these  programmes  or  how  far  they  have  been
implemented.

(1)  Canada, France, Germany, Italy, Japan, the United Kingdom

and  the  United  States  of  America.

(2)  Council  resolution  of  18  June  1992  on  the  technological
problems  of  nuclear  safety,  paragraph  5  (OJ  C  172,
8.7.1992,  p.  2).

(3)  See  Annex  1  —  Table  1.1.  As  a  comparison,  the  cost  of
constructing  a  new  power  plant  with  four  reactors  with  a
total  output  of  5 000  MW  of  electricity  is  of  the  order  of
ECU  5 000  million.

(4)  The  term  ‘safety’  means  all  of  the  security  measures  strictly
relating  to  the  operation  of  nuclear  power  plants.  The
broader  term  of  ‘nuclear  safety’  includes,  inter  alia,  the
protection  of  the  population  and  the  complete  nuclear-fuel
cycle.

9.2.1999

EN

Official  Journal  of  the  European  Communities

C  35/5

Breakdown  of  PHARE  and  TACIS  commitments  by  field  of  action  and  country  for  the  years  1990  to  the  end  of  1997

Table  1

U
C
E
n
o

i
l
l
i

m

U
C
E
n
o

i
l
l
i

m

300

300

250

250

200

200

150

150

100

100

50

50

0

0

350

350

300

300

250

250

200

200

150

150

100

100

50

50

0

0

Operational safety Generic studies and

Safety authorities

Fuel and waste

Chernobyl

l

a
n
o
i
t
a
r
e
p
O

y
t
e
f
a
s

Russia

i

a
s
s
u
R

design safety
d
n
a
s
e
d
u
t
s

y
t
e
f
a
s
n
g
s
e
d

c
i
r
e
n
e
G

i

i

y
t
e
f
a
S

s
e
i
t
i
r
o
h
t
u
a

d
n
a

l

e
u
F

e
t
s
a
w

l

y
b
o
n
r
e
h
C

Field of action

i

Ukraine,
excluding
Chernobyl
l
g
y
b
n
o
d
n
u
r
e
c
h
x
e
C

,
e
n
a
r
k
U

l

i

Chernobyl

Kazakhstan

Armenia

l

y
b
o
n
r
e
h
C

n
a
t
s
h
k
a
z
a
K

i

a
n
e
m
A

r

TACIS Regional
l
a
n
o
g
e
r

i

I

S
C
A
T

Country

Planning and
management

d
n
a
g
n
n
n
a
P

l

i

t
n
e
m
e
g
a
n
a
m

ITSC/USTC

C
T
S
U
C
T
S

/

I

Decisions
Contracts
Payments

Decisions
Decisions
Contracts
Contracts
Payments
Payments

Miscellaneous and
s
not allocated
u
o
e
n
a

d
e
t
a
c
o

t
o
n
d
n
a

l
l

e
c
s
M

i

l
l

a

Decisions
Contracts
Payments

Decisions
Decisions
Contracts
Contracts
Payments
Payments

Bulgaria

Czech and
Slovak Republic

Lithuania

PHARE
Regional

a
i
r
a
g
u
B

l

d
n
a
h
c
e
z
C

k
a
v
o
S

l

s
c

i
l

b
u
p
e
R

i

a
n
a
u
h
t
i
L

E
R
A
H
P

l

a
n
o
g
e
r

i

 
 
 
 
 
 
 
 
 
C  35/6

EN

Official  Journal  of  the  European  Communities

D = decisions
C = contracts
P = payments

l
a
n
o
i
t
a
r
e
p
O

,
y
t
e
f
a
s

e
t
i
s
-
n
o

d
n
a

e
c
n
a
t
s
i
s
s
a

s
t
c
e
j
o
r
p

d
e
t
a
i
c
o
s
s
a

s
e
i
d
u
t
s

c
i
r
e
n
e
G

d
n
a

n
g
i
s
e
d

y
t
e
f
a
s

d
n
a

e
t
s
a
w

,
l
e
u
F

-
n
o
i
s
s
i

m
m
o
c
e
d

g
n
i

o
t

e
c
n
a
t
s
i
s
s
A

y
t
e
f
a
s

s
e
i
t
i
r
o
h
t
u
a

C
T
S
U
C
T
S
I

/

,
g
n
i
n
n
a
l
P

t
n
e
m
e
g
a
n
a
m

n
o
i
t
a
u
l
a
v
e

d
n
a

s
u
o
e
n
a
l
l
e
c
s
i

M

d
e
t
a
c
o
l
l
a

t
o
n

d
n
a

l
a
t
o
T

l
a
t
o
t

e
h
t

f
o
%

Russia

D
C P

122,2

48,7

29,0

89,2 28,9 36,0 15,6 14,5

4,7 14,1

20,5

62,0
4,5 61,4 33,5

10,1
1,9

4,8

2,0

3,5
296
0,1 222,1 89,2

Ukraine,
excluding
Chernobyl

Chernobyl

Kazakhstan

Armenia

Regional

NIS  total

Bulgaria

Czech
and
Slovak
Republics

Lithuania

Regional

CEEC  total

D
C P

89,4
72,0 45,1 17,2

27,8
9,2

5,3
0,1 15,4

21,5
4,4

3,1

3,0

4,4

D
C P

D
C P

D
C P

5,7

5,6

50,5

1,7

9,6
1,0

7,9

1,4
0,0

0,0

59,0
4,8

2,0

0,9

0,2

D
C P

6,0

54,6
20,1 17,7 45,5 38,5

6,5
1,0

4,0

8,5

2,5
0,2

0,8

0,5

6,5
6,5

7,9
2,8

8,0

2,5

157,4
112,3 61,7

0,2

69,5
57,0 10,6

0,8

5,3

0,2

11,5
1,0

7,9

13,4
8,7

13,2

8,7
95,73
3,4 96,4 75,9

5,0

D

39,4
101,8
C P 194,9 98,3 98,7 63,4 72,1 10,7 39,1 15,7 61,4 33,5 22,5 13,3

228,9

132,5

65,0

52,3

D
C P

19,7
18,9 17,7 10,1

11,2
8,4

1,8

9,2
1,5

4,0

D

5,5

9,1

5,7
1,9

1,3

4,7

4,0
3,9

0,3

15,5

635,4
3,5 496,0 238,3

7,2

0,4
50,2
0,4 39,9 33,8

0,4

16,2

C P

1,4

1,3

4,6

4,4

0,5

0,5

0,2

0,2

0,3

0,3

6,9

6,8

D
C P

D
C P

D
C P

0,5

0,7
0,5

17,1

18,3

7,9 12,8

43,0

1,1

27,5
4,2

48,9

12,2

8,8

3,2 18,4

21,4

39,1 27,4 27,5 17,1 10,6

4,7 22,9

0,6

19,9
7,5

27,5
9,9

79,8

0,9

0,9

1,4

2,3
1,4

3,0
0,8

7,3
4,9

1,8

6,7

5,9

7,5

2,3
82
2,7 66,0 26,2

2,7
150,7
4,3 114,3 68,2

9.2.1999

(million  ECU)

n
o
i
t
a
t
n
e
m
e
l
p
m

i

%

s
n
o
i
s
i
c
e
d

e
h
t

f
o

75

30

71

39

82

15

4

69

8

38
29

20
20

9
3

1

1
0

12
25 101

79

81
78

6
11

2

2

0
0

10
9

19
22

78

38

80

67

43

42

62

61

82

33

76

45

36

18

9

0

1

16

81

7

1

0

11

19

Total

D

271,9

181,4

123,2

65,0

46,7

C P 234,0 125,6 126,1 80,4 82,8 15,4 62,0 25,6 61,4 33,5 29,2 18,3 14,7

18,2

786,1
7,8 610,2 306,6

100
100

100

78

39

%  of  the
total

%  of  the
decisions

D
C P

35
41

21

23
26

16
5

14

10
8

10

8
11

10

38

6
6

5

2
3

100

100
100

2

C P

86

46

70

44

67

12

78

32

95

52

62

39

81

43

78

39

Source:  Commission’s  revenue  and  expenditure  account  (De´sire´e)  as  at  31  December  1997.

regard 

1.4. The measures relating to fuels and radioactive waste
include  a  figure  of  ECU  20  million  allocated  to
to
fissile  materials.  With 
monitoring 
decommissioning,  the  programmes  concerned  Chernobyl
alone  and  were  for  a  maximum  of  just  ECU  59  million.
Various  other  measures  cover  safety-related  research
(ECU 2 million), 
loans
preparing 
(ECU  1,5  million),  radiation-detection  and  alert  systems
(ECU  6,5  million),  emergency  off-site  response  (ECU  5
million),  a  study  of  electricity  distribution  (ECU  0,4
million)  and  various  reserves  (ECU  2,8  million).

Euratom 

1.5. The programmes’ main priority comprises direct aid
to  nuclear  power  plants  for  operational  safety,  which
takes up 35 % of the funds, or ECU 272 million. Table 2
shows  the  scheduled  budget  appropriations  by  country
and  type  of  reactor  for  power  plants  in  east  European
countries.  Table  3  shows  the  geographical  location  of
Soviet-designed  power  plants  operating 
these
countries.

in 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9.2.1999

EN

Official  Journal  of  the  European  Communities

C  35/7

Breakdown  of  PHARE  and  TACIS  operational-safety  programmes  by  recipient  nuclear  power  plant

Table  2

)

W
M

(

y
t
i
c
a
p
a
c

l
a
t
o
T

19 843

Operator  responsible
for  on-site  assistance

Total
appro-
pria-
tions
allocated

119

1 900 Tractebel  (B)

3 800 RWE  (D)

3 700 Magnox  (UK)

2 775 Scottish  Nuclear  (UK)
1 644 KKE-Emsland  (D) (1)

560 Nersa  (F)

of  which

0
3
2
-
0
4
4

R
E
V
V

3
1
2
-
0
4
4

R
E
V
V

R
E
V
V

15

11

K
M
B
R

0
0
5
1
/
0
0
0
1

40

20

20

0
2
3
-
0
0
0
1

43

20

18

5

66

3

25

21

8

9

11

23

23

(million  ECU)

,
0
0
6
/
0
5
3
N
B

6
-
G
P
E

10

d
e
t
a
c
o
l
l
a

t
o
N

1

9

1

5

5

1

6

7

34

109

15

1

1

3

1

2

1

8

7

10

10

25

19

19

2

2

20

18

20

20

19

9

12

1

1

89

26

25

21

8

9

10

10

5

5

6

20

20

6

3

2

1

1

1

1

1

17

43

272

4

24

49

1

40

1

5

1

2

39

111

15

11

11

18

Russia

Kalinin  (2  ×  V320)

Balakovo  (4  ×  V320)

Sosnovy  Bor  (4  ×  RBMK  1000)

Smolensk  (3  ×  RBMK  1000)

Kola  (2  ×  V230  +  2  ×  V213)

Beloyarsk  (1  ×  BN  600)

Novovoronesh  (2  ×  V230  +  1  ×  V320)

1  720 RWE  (D)

Bilibino  (4  ×  EPG-6)

Kursk  (4  ×  RBMK  1000)

Appropriations  not  allocated

Ukraine

Rovno  (1  ×  V213  +  2  ×  V320)

Zaporozhe  (6  ×  V320)

South  Ukraine  (3  ×  V320)

Khmelnitsky  (1  ×  V320)

Chernobyl  (2  ×  RBMK  1000)

Not  allocated  to  a  specific  site

Armenia

44

3  700

13 045

1  695 EDF  (F)

5 700 GKN  (D)

2 850 DTN  (E)

950 DTN  (E)

1 850

752

Medzamor  (2  ×  V270-V230  variant)

752 ENEL  (I)

Kazakhstan

Aktau  (1  ×  BN  350)

Not  allocated  to  a  specific  country

150

150

Bulgaria

3 526

Kozloduy  (4  ×  V230  +  2  ×  V320)

3 526 EDF  (F)

Czech  and  Slovak  Republics

Bohunice  (2  ×  V230  +  2  ×  V213)

Dukovany  (4  ×  V213)

Mochovce  (4  ×  V213  under  construction)

Temelin  (2  ×  V320  under  construction)

Not  allocated  to  a  specific  site

Lithuania

Ignalina  (2  ×  RBMK  1500)

Hungary

Paks  (4  ×  V213)

Romania

Cernavoda  (1  ×  PHWR,  CANDU-Canada)

Slovenia

Krsko  (1  ×  PWR,  Westinghouse-USA)

Not  allocated  to  a  specific  country

3 192

1 632

1 560

2  600

2  600

1 730

1  730

620

620

620

620

Total  for  Central  and  Eastern  Europe

12 288

Grand  total  for  operational  safety

46 078

(1)  EDF  replaced  by  KKE.
Source:  Commission  decisions.

Total  for  the  newly  independent  States

33 790

229

40

 
 
 
C  35/8

EN

Official  Journal  of  the  European  Communities

9.2.1999

Location  of  Soviet-designed  nuclear  power  plants  operating  in  the  CEECs  and  NIS

Table  3

Source: http://atom.pnl.gov:2080/inspmedia/allmap98.gif — INSC database (ANL/United States Department of Energy).

The  Court’s  audit

to  evaluate 

1.6. The  Court’s  objective  was 
the
implementation of the resources deployed by the EU since
1990  for  the  purpose  of  improving  nuclear  safety  in  the
CEECs  and  the  NIS,  while  taking  account  of  the
multilateral  context  and  the  coordination  task  entrusted
to  the  Commission  by  the  international  community
within  the  scope  of  the  G7  and  the  G24 (5).

1.7. Audits  on  the  Commission’s  premises  focused  on
the  operations  of  the  PHARE  and  TACIS  programmes
and were supplemented by visits to the Ukraine, Bulgaria,
Lithuania  and  the  Russian  Federation,  and  to  several
specialist  organisations  within  the  EU.  (The  various
subjects  of  these  audits  are  set  out  in  Annex  2.)  The

(5)  See  Annex  1,  paragraph  8.

in 

its  work  by  an  expert  on
Court  was  assisted 
the  Ukraine,  some
nuclear-safety.  With  regard 
observations  regarding  the  nuclear-safety  programmes
have  been  published  by  the  Court  in  a  Special  Report
concerning  all  of 
this
country (6).

the  TACIS  operations 

to 

in 

2.  SUMMARY  OF  THE  OBSERVATIONS

The  European  Union’s  approach

2.1. The  intervention  strategy,  which  was  not  explicitly
stated  by  the  Commission  until  1996,  is  still  confused  as
regards  old-design 
reactors,  decommissioning  and
dismantling,  and  waste  treatment  (see  paragraphs  3.2  to

(6)  Special  Report  No  6/97  concerning  TACIS  subsidies

allocated  to  the  Ukraine  (OJ  C  171,  5.6.1997).

9.2.1999

EN

Official  Journal  of  the  European  Communities

C  35/9

3.6).  The  urgent  short-term  requirements  are  not  clearly
defined  (see  paragraphs  3.8  to  3.10).  There  has  been  a
delay  in  mobilising  the  financial  instruments  that  could
take  over  from  PHARE  and  TACIS  where  the  most
expensive  projects  are  involved  (see  paragraphs  3.7  and
3.11).

2.2. With  regard  to  coordination,  the  Commission,  in
the  context  of  the  mandate  conferred  on  it  by  the
international  community  (G24),  has  been  unable  to
achieve  more  than  an  exchange  of  information  between
donors,  the 
IAEA,  the  EBRD  and  recipients  (see
paragraphs  3.13  to  3.20).

2.3. The  Member  States’  lack  of  a  concerted  approach
towards  agreements  concerning  third-party  liability  (see
paragraph  5.18)  and  instituting  technical  standards  and
safety  regulations  (see  paragraph  3.1),  plus  the  lack  of  a
clear  contractual  framework  for  PHARE  and  TACIS
operations 
(see  paragraph  3.14),  compounded  by
difficulties  in  communicating  with  some  recipients  (see
paragraphs  4.3  to  4.4,  4.17  to  4.18,  5.1,  5.13  and  5.18
to  5.20),  have  stunted  the  development  of  relations  of
trust  and  partnership,  although  the  latter  is  of  strategic
interest  to  the  EU  and  its  nuclear  industry.

Management  of  the  operations

frequently  changing 

staff
2.4. The  disparate  and 
numbers  employed  by  the  unit  responsible  for  the
programmes,  the  inadequate  tools  for  managing  the
projects and monitoring the related accounts, and the lax
management  prevent  the  Commission  from  ensuring  that
the  operations  are  monitored  satisfactorily,  problems  are
dealt with swiftly and the quality of the services provided
by  contractors  is  checked  (see  paragraphs  4.12  to  4.16
and  5.14).

2.5. The  volume  of  contracts  concluded  without
invitations  to  tender  having  been  issued  accounted  for
almost  one  third  of  the  total  (ECU  192  million),  but
there  was  no  corresponding  increase  in  the  rate  of
implementation  (see  paragraphs  4.1  to  4.2  and  4.11).

2.6. The  use  of  supply  agencies  as 
intermediaries
between  recipients  and  the  managers  of  nuclear  power
plants in the EU that are responsible for on-site assistance
complicated  implementation,  contributed  to  the  delays,
created  tensions  and  enabled  over-high  advances  to  be
paid,  thus  enhancing  the  picture  of  the  mobilisation  of
appropriations  (see  paragraphs  4.3  to  4.10  and  5.9).

2.7. Some  of  the  external  bodies  which  the  Commission
used to assist it in planning work and in the appraisal of
contracts (see paragraphs 4.5 and 5.4 to 5.5) were set up
on  a  case-by-case  basis  by  creating  an  association  of
commercial companies which also held contracts financed
under  the  programmes.  The  Commission  delegated  too

many  of  its  responsibilities  in  the  planning  field,  thus
undermining  its  authority  and  independence.

2.8. The resources devoted to managing the programmes
are  not  shown  clearly  in  the  Commission’s  accounts  and
exceed the levels fixed by the Budget Authority, but have
not  remedied  the  weaknesses  detected  (see  paragraphs
4.19  to  4.20).

Mobilisation  of  aid  and  the  results

2.9. The  implementation  mechanism  selected  by  the
Commission proved particularly slow. Programmes at the
power plants which posed most safety problems were the
ones  that  made  least  headway  (see  paragraphs  5.8  to
5.12).  Supplying  equipment  was  often  favoured  over
other  aspects  of  the  development  of  a  safety  culture.  It
has  not  been  established  whether  the  division  of  the
budgets  between  power  plants  and  the  various  types  of
measure  was  appropriate  (see  paragraphs  5.6  and  5.7).

2.10. Once  decisions  had  been  taken,  the  content  of  the
programmes  underwent  many  changes.  The  lack  of
transparency  caused  misunderstandings  and  delays  and
enabled  the  most  dynamic  partners  to  reorient  the
programmes.  Some  projects  were 
cancelled  after
considerable  expenditure  had  been  incurred.  Some  useful
insufficient
projects  were  scaled  down,  owing 
budgetary  resources,  while  some  appropriations  also
remained  unutilised,  notably  because  of  amendments
made  to  programmes  that  were  already  under  way  (see
paragraphs  5.1  to  5.3).

to 

2.11. Account  was  not  taken  of  the  fact  that  the
granting  of  licences (7)  by  the  safety  authorities  in  the
recipient  countries  safeguards  satisfactory  completion  of
in  the  day,  and  the
equipment  projects  until 
procedure  was  not  coordinated  convincingly 
(see
paragraphs  5.15  to  5.17).

late 

2.12. Owing to the failure to communicate the results of
studies costing a total of nearly ECU 40 million that were
undertaken  as  part  of  the  1991  TACIS  programme,  their
usefulness  to  the  recipients  is  doubtful  (see  paragraph
5.18).  Moreover,  the  conditions  imposed  on  Russian
subcontractors  taking  part  in  the  studies  are  extremely
severe. There is a risk that the subcontracting procedures
will  allow  contractors  in  the  EU  to  make  sizeable  profits
that  cannot  be  verified  (see  paragraphs  5.19  and  5.20)

2.13. At the end of the financial year 1997 the contracts
entered  in  the  accounts  exceeded  the  value  of  actual
contracts by 20 %, the result being that only 63 % of the
decisions  were  covered  by  contracts  and  37 %  by

(7)  Authorisation  to  change  installations  and  then  to  start

operating  new  equipment.

C  35/10

EN

Official  Journal  of  the  European  Communities

9.2.1999

payments.  In  the  case  of  Chernobyl,  where  the  situation
is  particularly  difficult,  the  corresponding  rates  were
20 %  and  8 %  respectively.  The  lack  of  transparency  in
the  structure  of  the  budget  and  in  the  administration  of
the  accounts  deprives  the  managers  and  the  Budget
Authority  of  the  means  of  ensuring  and  maintaining
optimum allocation of the resources (see paragraphs 5.21
to  5.23).

agreement  has  been  concluded  between  the  Commission
and  the  recipients  as  to  which  reactors  are  to  be  closed
down  in  the  short  or  medium  term,  or  on  the  conditions
governing  their  continued  operation.  The  Commission
has  made  no  allowance  for  the  political,  social  and
economic realities in its programmes and has not acted in
a  transparent  manner,  which  has  caused  tension  among
the  recipients  (as  is  the  case  with  the  Kozloduy  power
plant).

3.  THE  EUROPEAN  UNION’S  APPROACH

European  integration

3.1. At  the  end  of  1997,  owing  to  the  absence  of  a
binding legal basis, there was still no formal consensus at
European level concerning technical standards in the area
of 
the  design  and  operational  safety  of  nuclear
installations (8).  The  25  basic  nuclear-safety  principles
in
published  by 
accordance  with  each  Member  State’s  own  technical
standards  and  regulations,  which  has  not  facilitated  the
action  the  EU  has  been  taking  with  regard  to  the  safety
authorities  in  the  CEECs  and  the  NIS.

IAEA  are  still 

implemented 

the 

Objectives  and  resources

3.2. Between  1990  and  1994  the  EU’s  nuclear-safety
programmes  were  decided  on  and  implemented  in  the
absence  of  an  explicitly  defined  overall  strategy.  During
this  period  PHARE 
focused  on  problems
funding 
concerning  the  VVER  440-230  reactors  in  Kozloduy,
Bulgaria, on the basis of the action programme drawn up
by  WANO  in  1991.  The  TACIS  programmes  first  of  all
comprised  studies  that  would  enable  the  EU  partners  to
gain  an  understanding  of  the  technology  involved  and
analyse  the  safety  problems  inherent  in  Soviet-designed
nuclear  power  plants.  They  were  then  directed  towards
providing on-site assistance and equipment, supplemented
by  assistance  to  the  safety  authorities.  It  was  only
following  repeated  requests  by  the  Council (9)  and  the
Parliament that the entire matter was scrutinised in 1995,
which  resulted  in  the  Commission  proposing  a  strategy
covering  all  of  the  fields  of  action  concerning  nuclear
safety  to  the  PHARE/TACIS  Committee  in  June  1996.

3.3. 54 %  of  Russia’s  nuclear  energy  was  still  being
generated by RBMK reactors as late as 1996. The RBMK
power  plant  in  Ignalina,  Lithuania,  and  the  VVER
440-230 reactors in Kozloduy, Bulgaria are of paramount
economic importance to both of the above countries. No

(8)  Paragraph  V.3  of  the  Communication  from  the  Commission
on  the  nuclear  industries  in  the  EU  (an  illustrative  nuclear
programme  according  to  Article  40  of  the  Euratom  Treaty),
COM(97)401  final,  25  september  1997.

(9)  Specific  request  made  at  the  meeting  of  the  PHARE/TACIS

Committee  on  27  July  1995.

3.4. The  Commission  has  made  no  distinction  in  its
programmes  between  the  objectives  and  the  resources  on
the basis of the age or recentness of the reactors from the
point  of  view  of  safety.  Improvements  that  would  allow
the life of the reactors to be extended beyond the normal
duration  and  those  contributing  solely  to  short-term
operational  safety  have  not  been  defined.  Given  the
uncertainties  as  to  when  old  plants  should  be  closed
down,  such  clarification  was  a  prerequisite  for  ensuring
consistency  in  the  planning  and  selection  of  projects.

Decommissioning  and  dismantling  of  reactors

3.5. Despite the importance of the decommissioning and
dismantling  of  reactors  that  cannot  be  modernised,  and
of waste-processing, the mobilisation of appropriations in
their regard has been very low. It is true that dismantling
operations  are  technically  arduous  and  very  costly;
despite  the  experience  gained  by  the  EU  in  dealing  with
some specific cases (10), it is also faced with economic and
practical  difficulties  in  this  area.

further  ECU  100  million 

3.6.
In  its  comments  on  the  1995,  1996  and  1997
budgets,  the  Budget  Authority  asked  the  Commission
to  devote  ECU  150  million  in  1995,  the  same  amount
to
in  1996  and  a 
environment-related  projects,  notably  in  connection  with
dismantling  RBMK  reactors.  Wording  of  this  sort  is  not
precise  enough  to  constitute  a  real  framework  and  to
encourage  monitoring  and  the  submission  of  detailed
reports  concerning  the  objective  of  dismantling  RBMK
reactors, which, other than in the case of Chernobyl, has
not  been  written  into  the  Commission’s  programmes.

3.7. The  TACIS  programmes  have  not  allowed
perceptible  results  to  be  achieved  in  dismantling  the
Chernobyl  power  plant.  Although  a  multilateral  account
was  set  up  at  the  EBRD  in  1997  later  than  planned,  it
constitutes  a  better  response  to  the  need  for  true
international  cooperation 
the  TACIS  bilateral
programmes,  which  were  given  limited  resources  and  did
not  place  sufficient  focus  on  cooperating  with  the  other
aid  donors.

than 

(10) Grundremmingen  A  and  Greifswald  in  Germany,  Chinon  A
and Saint-Laurent A in France, Windscale AGR and Berkeley
in  the  United  Kingdom  and  Vandellos  1  in  Spain.

9.2.1999

EN

Official  Journal  of  the  European  Communities

C  35/11

Supply  of  equipment

3.8.
It is the Commission’s view that equipment must be
supplied  to  cope  with  emergency  situations.  The  Court’s
examination of the time used for implementation revealed
that these urgent requirements have not always been met.
The  managers  responsible  for  the  Kola  and  Sosnovy  Bor
power  plants  confirmed  that  these  time  limits  made  it
impossible  to  finance  emergency  measures.

recipients 

than  TACIS.  The 

3.9. The supply of pilot equipment was also intended to
enable  technology  to  be  transferred  and  to  pave  the  way
for  larger-scale  industrial  projects  financed  from  sources
other 
recognise  and
appreciate  the  pilot  nature  of  the  projects.  However,
although  successes  such  as  that  achieved  in  Kalinin  in
respect  of  replacing  electrical-penetration  mechanisms
this  approach,
demonstrate 
industrial  cooperation,  which  is  needed  for  technology
transfer,  had  not  developed  very  far  by  the  end  of
1997.

the  appropriateness  of 

Non-industrial  aspects  of  operational  safety

Such 

involve 

activities,  which 

In  addition  to  piloting  industrial  projects,  on-site
3.10.
assistance  should  also  focus  on  improving  the  safety
culture. 
training,
organisation  and  procedures,  have  rarely  taken  the  form
of  projects,  but  have  instead  been  incorporated  into  the
general  specifications  governing  on-site  assistance.  These
tasks  have  therefore  continued  to  be  too  poorly  defined
and  have  not  been  sufficiently  supervised  by  the
Commission  to  allow  them  to  be  properly  developed,
monitored 
varies
evaluated.  The 
considerably  from  one  power  plant  to  another.  The
Balakovo  plant,  which  has  proved  most  active  in  this
area,  should  serve  as  a  reference.

situation 

and 

Euratom  loans

3.11. Although  it  has  only  been  possible  to  contract
Euratom  loans  since  March  1994,  no  borrowing  worthy
of  mention  had  taken  place  by  the  end  of  1997,  even
though  the  preparation  of  three  important  projects  had
started  in  1995  (see  paragraphs  4  and  5  of  Annex  1).

the  international  community  at  ECU  1 480  million.
Owing  to  the  fact  that  many  donors,  including  the
Commission  until  mid-1997,  have  not  provided  the
necessary  information,  NUSAC’s  data  comprise  only
approximate  figures.

Cooperation  with 
equipment

the  EBRD 

(NSA) 

in  supplying

it  was 

3.13. Even  though  the  Commission’s  and  the  EBRD’s
objectives  are  the  same  as  regards  the  supply  of
equipment, 
to  establish  close
impossible 
cooperation  between  these  two  institutions  at  the  power
plants  at  which  they  were  both  working  to  this  end
(Kozloduy,  Sosnovy  Bor,  Kola  and  Novovoronesh).  It  is
true  that  all  of  the  invitations  to  tender  financed  by  the
Nuclear Safety Account (NSA) managed by the EBRD are
open  to  all  of  the  donor  countries,  whereas  the
Commission’s  invitations  to  tender  are  restricted  to  EU
countries, but the fact that both institutions have separate
equipment  programmes  means 
that  any  efforts  at
cooperation  are  redundant.  For  example,  there  is  no
coordination of the programmes involving two projects at
the  Kola  power  plant  (safety  valves  and  leak  detection).

3.14. Furthermore, 
financing  agreements
the  NSA 
comprise a conventional framework that could be applied
to  Commission  supply  programmes,  given  that  financing
agreements in respect of the latter are either over-concise
or  simply  do  not  exist,  because  the  NSA  agreements  lay
down  the  conditions  concerning  the  future  cessation  of
the  operation  of  the  oldest  RBMK  and  VVER  440-230
units,  the  conduct  of  safety  analyses  at  each  power  plant
and  compliance  with  modernisation  programmes,  which
also  cover  the  equipment  supplied.

3.15. The  budgets  provided  for  in  the  NSA  financing
agreements  concerning  the  granting  of 
licences  for
equipment  supplied  fall  far  short  of  the  amounts  needed,
whereas  the  TACIS  programmes  make  a  far  greater
contribution  in  this  area.  The  complementary  nature  of
the  measures,  and  cooperation  between  the  Commission
and the NSA managers in assisting the safety authorities,
must  therefore  be  enhanced.

Multilateral  coordination

Cooperation  with  the  other  partners

Coordination  of  G24  (NUSAC)  assistance

3.12. The  G24  unit  for  ‘coordinating’  nuclear  safety  set
up  at  the  Commission  has  not  carried  out  genuine
coordination.  This  is  because  it  has  no  responsibility
within  the  assistance  programmes,  especially  those  of  the
Commission.  The  shortcomings  identified  by  this  unit
have  rarely  provided  the  basis  for  action  taken  by  the
donors.  NUSAC  has  estimated  the  funds  committed  by

its
3.16. The  Commission  makes  no  reference 
contracts  to  the  working  tools (11)  developed  by  the
IAEA.  Transparency  and  a  willingness  to  cooperate  with
the  IAEA  on  the  part  of  the  Commission  continue  to  be
inadequate.

in 

(11) Listing  and  classification  of  safety  problems,  ASCOT
guidelines  for  auto-evaluation  of  the  safety  culture,  ASSET
and  OSART  methods  of  assessing  operational  safety,  etc.

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3.17. Some  of  the  measures  financed  by  PHARE  and
TACIS  fall  within  the  framework  of  the  Member  States’
respective  commercial  strategies  and  action  programmes.
Owing  to  their  economic  importance,  these  bilateral
programmes  are  actually  linked  with  the  commercial
strategies  of  the  major  European  operators.  However,
given that the interconnection between these programmes
and  those  of  the  Commission  is  not  explained,  it  is
difficult  to  establish  the  degree  of  consistency  and
efficiency  of  the  operations  as  a  whole.

3.18. Whereas  reliance  on  WANO,  and  then  on  the
TPEG,  was  at  first  justified  on  the  basis  of  turning  to
account  the  expertise  of  the  western  operators,  WANO’s
methodologies and experience were not incorporated to a
sufficient  extent  by  the  Commission  into  its  contract
clauses.  Consequently,  practices 
as  using
indicators,  performing  peer  reviews  or
performance 
applying  best  practice  on  a  broad  scale  were  not
implemented  in  a  standardised  manner.

such 

3.19. The  contribution  to  the  ISTC  was  paid  out  of  the
TACIS  budgets  in  accordance  with  procedures  that  were
quite  inappropriate  to  the  manner  in  which  the  former
operates.  For  example,  in  1997,  although  the  availability
of  appropriations  was  not  a  cause  for  concern,  the
Commission’s  procedures  caused 
ISTC  serious
financing  difficulties,  forcing  it  to  ask  other  founding
members  to  cover  payments  which  the  Commission  was
late in making. With regard to the Ukraine, at the end of
1997  the  EU  had  still  not  taken  part  in  financing  the
Ukrainian  Science  and  Technology  Centre,  despite  the
relevant  provisions  made  under  the  1996  programme.

the 

3.20. The  OECD’s  Nuclear  Energy  Agency  (NEA)  has
recommended  that  a  strategic  safety-research  plan  be
drawn up in collaboration with the main partners and in
a  spirit  of  willingness  to  share  research  findings (12).  The
Commission’s  strategy  regarding  PHARE  and  TACIS
operations in the field of safety-related research makes no
mention of the ISTC’s activities and synergy is not sought
in  this  area.  And  yet  the  ISTC  has  financed  23  projects
(ECU  6,5  million)  in  the  field  of  nuclear-reactor  safety
and  41  others  in  the  area  of  environmental  safety  with
regard  to  nuclear  activities  (ECU  19,6  million).

4.  MANAGEMENT  OF  THE  OPERATIONS

Invitations  to  tender

4.1. Since  the  nuclear-safety  programmes  began,  the
Commission  has  made  extensive  use  of  Article  118(2)  of

(12) Report on the requirements regarding research into the safety
of  Soviet-designed  reactors,  published  by  the  NEA  at  the
beginning  of  1998.

the  Financial  Regulation (13)  to  conclude,  by  means  of
private treaty, service contracts involving large sums. Use
of such procedures accounted for ECU 192 million out of
operations  totalling  ECU  610  million,  i. e.  31 %.

4.2.
In  July  1994  the  Financial  Controller  approved  a
derogatory  framework  proposed  by  DG  IA  that  was
based  on  a  list  of  the  types  of  measures  and  reasons
justifying  derogation.  This  framework  did  not,  however,
specify  the  supporting  documents  that  were  to  be
provided, notably so as to ensure that, irrespective of the
procedure  applied,  the  economically  most  advantageous
tender  would  be  selected,  in  accordance  with  Article  117
of  the  Financial  Regulation.  Implementation  of  the
framework 
in
resulted 
appraising  contracts  (experts’  fees).

in  delays  and  difficulties 

Supply  agencies

Appraisal  of  supply  projects

4.3. The  Commission  decided  to  make  use  of  supply
agencies  in  1994  to  assist  it  in  administering  supply
contracts, since it doubted the impartiality and quality of
the  services  provided  by  the  managers  of  nuclear  power
plants  in  the  EU  responsible  for  on-site  assistance  in  this
particular area. This mechanism gave rise to tensions that
were  hardly  conducive  to  efficient  work  and  it  watered
down  responsibilities.

4.4. The  details  of  the  purchasing  procedures  that
involve 
intervention  by  supply  agencies  were  not
approved  by  the  Commission  until  October  1996.  They
involve  35  stages:  11  fall  under  the  terms  of  reference  of
on-site assistance, the supply agency is responsible for 20
and  the  Commission  for  two.  While  the  recipients  are
signatories  to  the  contracts,  they  are  responsible  for  only
two  stages:  incorporating  the  requirements  connected
with the granting of licences by the safety authorities into
the  specifications,  and  final  acceptance  of  the  supplies.
Contrary  to  the  provisions  of  the  TACIS  regulation,
recipients  do  not  always  participate  in  the  financial
evaluation  of  tenders.

(13) Service contracts may be awarded by private treaty when the
measures  involved  are  low  in  value  (ECU  0,3  million  and
subsequently  ECU  0,2  million,  according  to  the  successive
TACIS 
to
non-profit-making  bodies,  extensions  to  measures  already
under  way,  or  where  the  invitation  to  tender  has  been
unsuccessful.

regulations) 

short-term, 

entrusted 

or 

9.2.1999

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C  35/13

The  entry  in  the  accounts  and  the  reality  of  the
operations

4.5. The  Commission’s  management  accounts  show  an
amount  of  ECU  167  million  for  TACIS (14)  contracts
with  supply  agencies.  This  represents  an  estimated
purchase  volume  of  ECU  162,5  million,  and  agencies’
fees  and  remuneration  for  overseeing  these  purchases,
which,  on  the  basis  of  the  contracts,  are  estimated  at
ECU  4,5  million  (or  2,8 %  on  average).  This  practice
gives an inflated view of budget implementation as far as
the volume of contracts is concerned. In fact, the value of
the  supply  contracts  concluded  by  the  agencies  was  only
ECU 44,6 million at the end of 1997 and the expenditure
shown  in  the  management  account  should  be  reduced  by
ECU  118  million  to  reflect  the  actual  contracts.

4.6. Thus,  the  view  provided  by  the  statement  of  the
commitments  was  enhanced  to  show  ECU  65,8  million
for  Russia (15),  ECU  38,5  million 
for  operations
connected  with  Chernobyl (16)  and  ECU  13,7  million  for
the  other  power  plants  in  the  Ukraine  and  Armenia (17).
Furthermore,  most  of  the  contracts  with  the  supply
agencies were concluded at the end of the year, since the
manner  in  which  they  are  entered  in  the  accounts  allows
large volumes of commitments to be made available very
quickly  and,  in  so  doing,  improves  the  rate  of  utilisation
of  appropriations  at  the  year-end.

4.7. With  regard  to  payments,  advances  totalling  ECU
43  million  that  were  intended  to  cover  supply  contracts
and  paid  into  special  bank  accounts  held  by  the  agencies
are  recorded  as  final  payments  in  the  Commission’s
accounts.  At  the  end  of  1997  the  total  volume  of
payments  made  by  the  agencies  was  only  ECU  24,3
million.  The  Commission’s  management  accounts  should
therefore  be  revised  downwards  by  ECU  18,7  million,  if
an  accurate  view  of  these  transactions  is  to  be  gained.
The  payment  into  special  bank  accounts  of  sums  in
excess  of  those  actually  required  has  the  effect  of
increasing 
payment
the 
appropriations (18).

consumption 

of 

4.8. The  contracts  concluded  by  the  agencies  and  the
the
payments 
Commission’s  accounting  system  or  in  its  management
system.

they  make  are  not 

recorded 

in 

(14) See  Annex  2,  Table  2.4.  Only  one  PHARE  contract  was
concluded  at  the  end  of  1997  for  ECU  1  million  (reference
No  ZZ95280701  97-0779).

(15) Contracts  with  Italtrend  and  Crown  Agents.
(16) Contracts  with  GTZ 

(Gesellschaft 

für 

technische

Zusammenarbeit).

(17) Contracts  with  Europa  and  Fichtner.
(18) See  also  paragraph  5.8  of  the  Court’s  Annual  Report
(OJ  C  349,

financial  year  1997 

the 

concerning 
17.11.1998).

4.9. At  the  end  of  1997,  according  to  the  agencies,  the
bank interest generated on the special accounts amounted
to  ECU  2,2  million  and  had  not  been  entered  in  the
accounts  or  audited  by  the  Commission  since  the
programmes  had  begun.

4.10. All  these  practices  deprive  the  accounts  of  the
transparency  needed  to  allow  the  transactions  to  be
monitored  and  audited.

Contractual  procedures

4.11. Of  the  14  TACIS  contracts  concluded  with  five
supply  agencies  since  January  1994  (see  paragraph  4.5),
only the first two, concluded in January and February of
1994,  were  awarded  following  an  open  invitation  to
tender.  A  further  four  were  concluded  following  a
restricted  invitation  to  tender.  The  remaining  eight,
involving  a  purchasing  volume  of  ECU  82  million  and
fees  of  ECU  2,4  million,  were  concluded  by  private
treaty, despite the fact that the fees and, more especially,
the extent of the activities involved justified an invitation
to  tender  and  technical  evaluation.

The  Commission’s  monitoring  of  the  operations

4.12. DG  IA’s  administrative  unit  does  not  have  the
implementation  of  the
staff  needed  to  ensure  that 
programmes is monitored correctly. Since the unit was set
up in 1993, 25 persons have been appointed to it (five in
1994, six in 1995, 10 in 1996 and four in 1997) and 17
staff  have  left  (three  in  1995,  five  in  1996  and  nine  in
1997).  Of  the  22  staff  working  in  the  unit  at  the  end  of
1997, five were due to leave in the first half of 1998. Out
of  the  seven  Category  A  managers,  three  (a  seconded
national  expert  and  two  auxiliary  staff)  only  had  term
contracts,  two  of  which  expired  at  the  end  of  March
1998.  Three  of  the  seven  Category  B  managers  also  had
term  (auxiliary)  contracts,  one  of  which  expired  at  the
end  of  March  1998.  This  turnover  of  staff  and  the
precarious  nature  of  the  posts  resulted  in  piecemeal
management that has been directly prejudicial to working
discipline  and  to  the  monitoring  of  measures  in  the
past.

4.13. No  methodology  is  consistently  applied  by  the
Commission’s managers and they have no reliable tool to
assist  them  in  monitoring  and  managing  projects.  There
are  weaknesses  in  the  computerised  management  system
(De´sire´e).  The  administrative  organisation  is  improvised
and  does  not  provide  for  compiling  structured  files  that
are  kept  up  to  date  in  accordance  with  clear  guidelines.
The  monitoring  carried  out  by  Commission  departments
does  not  enable  them  to  control  the  development  of  the

C  35/14

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9.2.1999

operations  (see  paragraphs  5.2  and  5.3)  or  to  resolve
swiftly  any  problems  raised  with  them  by  recipients  or
providers  of  on-site  assistance  (see  paragraphs  5.12  and
5.13).

4.14. The  Commission  subcontracts 
follow-up  and
on-the-spot evaluation of measures to consultants. It was
not,  however,  until  September  1995  that  nuclear-safety
operations in Russia were made subject to this procedure
and monitoring did not begin until mid-1996. As a result
many  operations,  including  all  the  contracts  under  the
1991  programme  have  not  been  monitored,  or  were
monitored only belatedly. Moreover, the problems raised
by  consultants  in  their  evaluation  reports  were  not
resolved  promptly  by  the  Commission  (on-site  assistance
at Sosnovy Bor and assistance to the safety authorities in
the  Ukraine).

On-the-spot  monitoring  of  programmes

4.17. The  1992  TACIS  programme  provided  for  a
budget  of  ECU  1  million  for  the  management  and
coordination  of  projects  by  a  Joint  Management  Unit
(JMU) based in Moscow (21). The JMU comprises staff of
the  Ministry  of  Atomic  Energy  (Minatom),  the  safety
authority  (GAN),  the  body  managing  nuclear  power
plants  (REA),  some  other  Russian  organisations  involved
and  western  experts.  Its  purpose  is  to  ensure  that  TACIS
measures  are  implemented  properly  and  to  facilitate
relations  with  western  institutions.  The  need  for  a
structure of this nature was reiterated in the 1993 TACIS
programme,  in  which  it  was  pointed  out  that  this  matter
had  been  discussed  with  the  Russian  authorities  within
the  more  general  framework  of  a  draft  protocol  of
agreement specifically concerned with nuclear safety. The
protocol  was  signed  in  February  1995,  but  only  dealt
with  matters  concerning  third-party  liability.

the 

Interim 

invoices 

concerning 

services  which  were
for 
4.15.
adequately  backed  up  by  supporting  documents  have  on
several occasions been paid instead of being rejected, with
the  Commission  departments  merely  asking 
the
contractor  to  supply  the  proof  at  a  later  stage.  The
resolution  of  problems 
financial
settlement  of  contracts  that  arise  when  intermediate
payments are made is thus postponed, in some cases until
the  final-payment  stage (19),  when  it  is  too  late  for  the
contractor  to  be  able  to  take  the  corrective  action  that
sound  financial  management  of  the  contract  would  have
dictated  from  the  moment  the  first  intermediate  payment
had  been  made.  At  the  end  of  1997,  for  example,  there
were  a  large  number  of  invoices  that  had  still  not  been
paid  by  the  Commission.  Furthermore,  there  is  no
procedure or contractual provision requiring the contract
accounts  to  be  closed  within  a  specified  period  after  the
final  payment,  so  that  any  disputes  can  be  resolved,  the
project  accounts  reflect  the  reality  of  the  operations  and
the  allocation  of  any  residual  balances  can  be  decided  in
good  time (20).

by 

undertaken 

clearance  work 

4.16. The 
the
Commission  in  1997  in  connection  with  the  financial
settlement  of  PHARE  and  TACIS  contracts,  which  was
loss  of  background  knowledge
complicated  by  the 
resulting from the turnover of contract staff and the lack
of  sound  administrative  practices,  was  not  accompanied
by  a  single  measure  to  prevent  such  situations  from
recurring.

(19) Contract  Nos  94-0046,  93-0504,  94-1281  and  95-0242

provide  examples  of  this  situation.

(20) 15  of  the  43  contracts  audited  showed  outstanding  balances
totalling  ECU  5,9  million  on  31  December  1997,  even
though  the  contracts  had  expired  more  than  a  year  earlier
(93-0958,  94-1263,  93-0533,  94-0120,  94-0491,  94-0116,
93-0410,  94-0547,  95-0775,  95-0774,  94-1281,  93-0972,
95-0190,  93-0895  and  94-0028).

4.18. When  discussions  were  held  with  representatives
from  the  Russian  Ministry  of  Atomic  Energy  in  October
1997,  the  latter  stated  that  they  were  distressed  by  the
lack  of  progress  made  in  setting  up  the  JMU.  Two
contracts  were  eventually  concluded  in  November  1997,
so  that  it  could  be  funded  up  until  September  1999,
and  were  charged 
for  1994
(ECU  0,7  million)  and  1996  (ECU  0,3  million).  Given
that  the  Commission  Delegation  in  Moscow  did  not
monitor  the  nuclear-safety  programmes,  the  absence  of  a
JMU prevented any continuous on-the-spot monitoring of
the programmes in Russia from taking place until the end
of  1997.

the  programmes 

to 

Cost  of  management

4.19. Prior  to  1996  the  use  of  operating  appropriations
to  finance  technical  assistance  for  the  Commission  was
forbidden,  but  since  then  it  has  been  governed  by  the
notes  (remarks)  to  the  budget (22).  However,  the  report
submitted  by  the  Commission  at  the  beginning  of  1998
concerning  the  use  of  this  technical-support  ‘facility’
provides  no 
the  resources
information  concerning 
allocated  by  DG  IA  to  support  the  nuclear-safety
programmes.  The  figure  of  ECU  29,2  million  entered  in
the  accounts,  i. e.  5 %  of  the  total  value  of  contracts
concluded  since  1990 (23),  does  not  reflect  the  full
amount. For example, it does not include fees of ECU 1,8
million  paid  to  supply  agencies,  nor  the  resources
allocated  by  on-site  assistants  for  the  administration  and
technical  monitoring  of  operations,  which  are  difficult

(21) A  sum  of  ECU  1  million  was  also  set  aside  for  a  Joint

Management  Unit  based  at  Kiev  in  the  Ukraine.

(22) In  aggregate,  this  expenditure  must  not  exceed  2 %  of
TACIS

appropriations 

3,5 % 

and 

of 

PHARE 
appropriations.

(23) See  the  ‘Planning,  management  and  evaluation’  column  in

Table  1.

9.2.1999

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C  35/15

to 
identify  as  a  result  of  the  Commission’s  weak
accounting  requirements  as  regards  the  content  of
technical  assistants’  reports.

4.20. The  total  cost  of  managing  the  programmes  and
projects  (chargeable  to  administrative  and  operating
appropriations) is not evident (24) from the Commission’s
complex  mechanism.  The  5 %  entered  in  the  accounts
exceeds  the  standards  fixed  as  of  1996  by  the  Budgetary
Authority,  but  does  not  avert 
the  management
weaknesses  that  were  detected.

5.  MOBILISATION  OF  AID  AND  THE  RESULTS

Planning

5.1. Between  1990  and  1992,  during  the  initial  stages,
the  projects  selected  for  inclusion  in  programmes  were
proposed  by  western  experts  and  produced  results  that
were  of  limited  practical  use  to  the  recipients (25).  From
1993  onwards  cooperation  focused  on  projects  better
suited  to  the  requirements.  However,  the  drawing-up  of
annual  programmes  has  always  raised  difficulties  and
misunderstandings among recipients, especially in Russia,
owing  to  the  priorities  selected.  Not  one  project  was
mentioned,  even  on  an  indicative  basis,  under  the  1993
and,  subsequently,  1994  programmes  for  Sosnovy  Bor.
The  projects  were  finalised  a  posteriori.  With  regard  to
the  other  Russian  power  plants,  the  use  to  which  the
budgets  adopted  in  1993  would  be  put  could  only  be
determined  when  the  1994  programme  was  drawn  up.
of
revealed 
On-the-spot 
communication  and  explanations,  which  was  not  helped
by  the  Commission’s  rare  presence  on  site,  also  led  to
misunderstandings  that  were  detrimental  to  smooth
cooperation.

visits 

lack 

that 

the 

at  Sosnovy  Bor,  the  display  of  safety  parameters  and
then the management and control information system
of  the  maintenance  unit  at  Kalinin)  or  losing  control
over  elements  of  contracts  (evaluation  of  RBMK
reactor  safety).  Similar  risks  apply  to  the  project  for
modernising  the  control  room  in  Sosnovy  Bor  that  is
now  being  prepared;

(b) two  important  projects,  the  Nikiet  technical  centre
(ECU  2  million)  and  the  reactor  core  protection  at
Kola (ECU 4 million), were cancelled, but the budget
balances  (ECU  3,3  million)  were  not  reallocated.  The
latter project was cancelled after ECU 2,7 million had
been  paid  in  respect  of  studies  which  were  not
followed  up  with  the  investments  originally  planned;

imposed 

(c) several  useful  projects  (water  chemistry  in  Kola  and
fire-detection  sensors  and  the  monitoring  of  fuel
loading in Balakovo) were scaled down, owing to the
limits 
budget
appropriations allocated to the project or power plant
under  the  annual  programme  concerned.  In  such
cases,  the  Commission  should  evaluate  the  usefulness
of  maintaining  the  projects  by  proposing  the  transfer
to  them  of  funds  that  would  otherwise  not  be  used;

indicative 

the 

by 

(d) work  that  was  not  covered  by  the  terms  of  the
contracts  was  carried  out  because  the  Commission
did  not  react  when  developments  in  a  situation
revealed 
specifications  were
initial 
inappropriate  (assistance  to  the  safety  authorities  in
Lithuania).

that 

the 

5.3. For  this  reason  the  content  of  the  programmes  has
varied within the budget allocations to each power plant,
and  the  operations  have  often  moved  in  the  direction
sought by the most dynamic party. It has been difficult to
maintain  overall  consistency  because  of  the  number  of
parties  involved  and  the  diversity  of  the  operations.

5.2. After  the  Commission  had  decided  on  the  projects,
there  were  several  cases  where  those  that  had  been
included  in  the  programmes  were  cancelled,  amended  or
new  elements  had  been  added.  The  Commission  did  not,
therefore,  always  have  control  over  the  development  of
the  programmes’  content  and 
the  allocation  of
resources:

5.4. Since 1992 TPEG has become increasingly involved
in  discussing  and  drawing  up  Commission  programmes.
The  Commission  has  not,  however,  been  represented
during  many  of  the  visits  made  to  recipients  and  has
over-delegated  its  responsibilities  in  this  area (26).

(a)  in the case of operations  split  up  into  stages financed
by  successive  annual  programmes,  the  results  of  each
stage were not always evaluated before the next stage
was  finalised  and  launched.  In  several  cases  this
losing
shortcoming  resulted 
control  over  the  content  of  projects  (the  computer
network and then the operational management system

the  Commission 

in 

5.5. Little  use  was  made  of  the  Joint  Research  Centre’s
(JRC)  former  relations  with  the  nuclear  community  in
eastern  Europe  as 
in
consultation  with  recipients.  It  was  not  until  the  end  of

regards  planning  measures 

(24) See  also  paragraphs  5.37  to  5.39  of  the  Court’s  Annual
Report  concerning  the  financial  year  1997  (OJ  C  349,
17.11.1998).

(25) Minutes  of  the  Cooperation  Forum  for  VVER  Regulators

held  from  27  to  29  August  1997  in  Finland.

(26) The  Court  made  observations  concerning  the  conditions
governing 
its  public
the  Commission’s  delegation  of 
responsibilities  in  its  Special  Report  No  1/96  concerning  the
MED  programmes  (OJ  C  240,  19.8.1996,  paragraphs  39  to
57).

C  35/16

EN

Official  Journal  of  the  European  Communities

9.2.1999

the  financial  year  1997  that  the  Commission  decided  to
entrust the JRC with the task of drawing up the terms of
reference  governing  projects  included  in  the  TACIS
programmes,  which  had,  until  then,  been  the  task  of
is
TPEG.  This  manner  of  allocating  responsibilities 
more 
fulfilling
its 
decision-making
responsibilities  properly  than  the  former  practice  was.
Furthermore,  the  JRC  is  independent  of  operators  in  the
nuclear sector, whereas TPEG, irrespective of its ties with
the EU, is not in a position to distance itself totally from
its  members’  industrial  interests.

the  Commission 
and 

programme-preparation 

conducive 

to 

Budgets  allocated  for  on-site  activities

Russian  power  plants  involve  industrial  equipment.  Few
of  the  projects  concerned  other  aspects  of  improving
operational  safety,  despite  the  emphasis  placed  on  this
area  since  the  1992  TACIS  programme:

(a)  measures  concerning  organising  staff  and  taking  the
(improving
person/machine

consideration 
the 
and 

into 
training 

factor 

human 
procedures, 
interface);

(b) measures  accompanying  the  supply  of  equipment  to
improve 
its  utilisation
safety  aspects  of 
(documentation,  reporting  of  incidents  and  other
events,  inspection,  maintenance  and  training);

the 

5.6.
It  can be seen  from the  list in Table 4 that  most  of
the  projects  connected  with  on-site  assistance  at  four

(c)  technology  transfer  to  ensure  that  measures  can
continue  because  equipment  is  produced  locally.

Nature  of  the  projects  connected  with  on-site  assistance  at  four  power  plants  visited  in  the  Russian  Federation

Table  4

(million  ECU)

Projets

RBMK
Sosnovy  Bor

VVER  213/230
Kola

VVER  320

Total

Kalinin

Balakovo

Amount

Operational-monitoring  systems

Maintenance-management system

Subtotal  for  computer  systems

Control  and  safety  valves

Waste  treatment

Water  chemistry  and  leak  detection

Conduit  cleaning  and  filtering

Spare  parts

Modernisation  of  control  rooms

Fire  protection

Power  supply

Fuel loading

Turbine  vibration

Measurement  of  neutron  flows  in  the  reactor

4,29

4,29

3,00

0,20

3,00

0,20

0,90

Tools

Electric-penetration  mechanisms

Hydrogen  concentration

Radiation  protection  (ALARA)

Emergency  cooling  pumps

Steam  flowmeter

Corrosion  monitoring

Subtotal  for  industrial  equipment

Quality  control  and  organisation

Training

Probabilistic  safety  evaluations

Subtotal  for  other  projects

Budgets  not  allocated  or  cancelled

Total  set  aside  for  the  programmes

2,00

3,00

2,30

1,00

1,50

0,60

7,30

10,40

0,50

0,50

1,97

14,06

0,30

0,30

0,85

11,55

2,50

2,00

4,50

2,15

0,09

1,62

0,80

0,55

1,10

1,25

1,00

0,48

0,85

0,70

0,30

0,10

10,99

0,38

15,87

3,00

0,20

0,86

3,97

1,41

0,50

0,84

1,00

0,47

0,25

12,50

1,30

0,70

2,00

0,65

15,15

6,79

2,00

8,79

7,15

6,29

4,78

4,77

3,16

3,00

2,20

1,94

1,90

1,25

1,00

0,95

0,85

0,70

0,60

0,30

0,25

0,10

41,19

1,30

1,20

0,30

2,80

3,85

56,63

%

12,0

3,5

15,5

12,6

11,1

8,4

5,6

5,3

3,9

3,4

3,4

2,2

1,8

1,7

1,5

1,2

1,1

0,5

0,4

0,2

72,7

2,3

2,1

0,5

4,9

7

100

Source:  On-the-spot  visits  and  on-site  assistants’  reports.  The  amounts  relate  to  the  contracts  signed  or,  where  contracts  have  not  yet  been  signed,  the

estimated  budget.

9.2.1999

EN

Official  Journal  of  the  European  Communities

C  35/17

5.7. The  uniformity  of  the  TACIS  annual  budgets  for  operational  safety  that  are  allocated  to
each  power  plant  (around  ECU  4  million  per  annum  per  plant)  is  in  marked  contrast  to  the
widely  differing  situations  prevailing  among  them.  These  appropriations  are  also  divided
uniformly  between  on-site  assistance  and  projects.  It  has  not  been  established  whether  this
splitting-up  of  funds  in  the  case  of  equipment  purchases  is  efficient.

Delays  and  the  stage  reached  in  implementing  the  operations

Delays  in  preparing  contracts

5.8. Table 5 provides a breakdown of the time that elapsed between the Commission taking its
decision  and  the  contract  being  signed  for  the  operations  audited.  The  longest  delays  apply  to
assistance  provided  to  safety  authorities  (882  days  on  average),  and  to  supply  contracts  (an
average  of  705  days),  whose  administration  is  entrusted  to  the  supply  agencies.  This  delay  of
almost two years is additional to the time taken to prepare decisions, which actually resulted in
the  Commission  deciding  on  most  of  the  programmes  at  the  end  of  the  financial  year.

Time  lapses  between  the  Commission  taking  its  decision  and  contracts  being  signed  in  respect  of  the  operations  audited

Table  5

s
y
a
D

1 400

1.400

1 200

1.200

1 000

1.000

800

800

600

600

400

400

200

200

-

–

Bistand på stedet

e
t
i
s
-
n
O

e
c
n
a
t
s
s
s
a

i

Bistand til
sikkerhedsmyndighederne

Undersøgel-ser og
analyser af sikkerheden

Bistand til Kommissio-nen

Leveringer (direkte
kontrakter)

Mindste antal dage fra afgørelsen til undertegnelsen af kontrakten

i

Gennemsnitlige antal dage fra afgørelsen til undertegnelsen af kontrakten

l

Højeste antal dage fra afgørelsen til undertegnelsen af kontrakten

o
t

e
c
n
a
t
s
s
s
A

i

s
e
i
t
i
r
o
h
t
u
a
y
t
e
f
a
s

i

s
e
d
u
t
s

y
t
e
f
a
S

s
e
s
y
a
n
a

d
n
a

e
h
t
o
t

e
c
n
a
t
s
s
s
A

i

i

n
o
s
s
m
m
o
C

s
e

i
l

p
p
u
S

)
s
t
c
a
r
t
n
o
c

t
c
e
r
i
d
(

Leveringer (delegerede
kontrakter)

Alle kontrakttyper

s
e

i
l

p
p
u
S

d
e
t
a
g
e
e
d
(

l

)
s
t
c
a
r
t
n
o
c

f
o

s
e
p
y
t

l
l

A

s
t
c
a
r
t
n
o
c

Type of contract

Minimum time lapse between the decision and signature of the contract
Mindste antal dage fra afgørelsen til undertegnelsen af kontrakten

Gennemsnitlige antal dage fra afgørelsen til undertegnelsen af kontrakten

Average time lapse between the decision and signature of the contract

Højeste antal dage fra afgørelsen til undertegnelsen af kontrakten
Maximum time lapse between the decision and signature of the contract

Type  of  contract

On-site  assistance

Assistance  to  safety  authorities

Safety  studies  and  analyses

Assistance  to  the  Commission

Supplies  (direct  contracts)

Supplies  (delegated  contracts)

All  types  of  contracts

Minimum  time
lapse  between  the
decision  and
signature  of  the
contract

Average  time  lapse
between  the
decision  and
signature  of  the
contract

Maximum  time
lapse  between  the
decision  and
signature  of  the
contract

(in  days)

Number  of
contracts  audited

43

741

42

121

474

217

42

308

882

493

400

682

705

511

713

1 063

987

763

840

1 227

1 227

17

3

10

10

3

16

59

 
 
 
 
 
 
 
 
 
C  35/18

EN

Official  Journal  of  the  European  Communities

9.2.1999

(in  days)

Situation  regarding  other  supply  projects  (delegated  contracts)
still  under  preparation  on  31.12.1997

Average  time  lapse
between  the
decision  and
approval  of  the
specifications

Average  time  lapse
between  the
approval  of
the  specifications
and  31.12.1997

Total  time  lapse
between  the
decision  and
31.12.1997

Number  of
operations  audited

Specifications  being  drawn  up

Specifications  approved,  contract  yet  to  be  concluded

799

518

725

1 317

8

9

5.9. The  contracts  concluded  with  the  supply  agencies
are  nothing  more  than  intermediate  instruments  that
provide  no  indication  of  the  situation  regarding  supply
operations.  At  the  close  of  the  1997  financial  year,  only
16  of  the  38  operations  audited  were  covered  by
contracts,  which  had  been  signed  an  average  of  705
days (27)  after  the  date  on  which  the  Commission  had
taken  its  decision.  Five  had  been  cancelled  before  the
specifications had been approved. The preparation of the
remainder,  which  all  related  to  Russia,  also  took  an
abnormally 
long  time.  On  31  December  1997  the
specifications  concerning  eight  of  these  operations  had
still  not  been  approved  after  an  average  725  days
following  the  decision  date.  In  nine  other  cases  the
specifications  had  been  approved,  but  the  contracts  had
still  not  been  signed  an  average  of  1 317  days  after  the
Commission  had  taken  the  corresponding  decision.

Stage 
projects

reached 

in 

implementing  operational-safety

the 

stage 

reached 

summarises 

5.10. Table  6 
in
implementing  the  TACIS  operational-safety  programmes
for  the  years  from  1992  to  1997  in  respect  of  the
Sosnovy  Bor  (RBMK  1000),  Kola  (VVER  440-230  and
440-213),  Kalinin  and  Balakovo  (VVER  1000-320)
power  plants.  At  the  end  of  1997  only  14  of  the  52
projects connected with on-site assistance under the 1992
to 1995 programmes at the above-mentioned four power
implemented  (all  at  Kalinin  and
plants  had  been 
Balakovo).  Two  projects  were  in  the  course  of  being
implemented  and  11  had  been  cancelled.  The  remaining
projects,  including  those  under  the  1996  and  1997
programmes,  were  still  in  preparation.

TACIS  programmes  for  the  years  1992  to  1997  relating  to  on-site  assistance  and  improving  operational  safety  in  Kola,  Sosnovy  Bor,
Kalinin  and  Balakovo  (Russian  Federation)

Table  6

U
C
E
n
o

i
l
l
i

m

%

25

25

20

20

15

15

10

10

5

5

0

0

90%

80%

100%

100
90
80
70
60
50
40
30
20
10
0

70%

60%

50%

40%

30%

10%

20%

0%

Programmes 1992 to 1997

Programmes 1992 to
1997

Programmes 1992 to
1997

Contracts concluded

Contracts concluded

Contracts concluded

Payments made

Sosnovy Bor

Sosnovy
Bor

Kola

Kola

Kalinin

Kalinin

Balakovo

Balakovo

Power plants

Payments made

Payments made

Planned: proportion of the
Previsto: parte dei
projects allocated to the
progetti nella dotazione
power plant under the budget
destinata alla centrale

Previsto: parte dei
progetti nella dotazione
destinata alla centrale

Realizzato: parte dei
progetti nei contratti
conclusi

Implemented: proportion of
Realizzato: parte dei
the projects covered by the
progetti nei contratti
contracts concluded
conclusi

Sosnovy Bor

Sosnovy
Bor

Kola

Kola

Kalinin

Kalinin

Balakovo

Balakovo

Total

Total

Power plants

(27) 446  days  to  approve  the  specifications  and  259  days  to

conclude  the  contract.

 
9.2.1999

EN

Official  Journal  of  the  European  Communities

C  35/19

(million  ECU)

Sosnovy  Bor

of  which

On-site  assistance

Associated  projects

Kola

of  which

On-site  assistance

Associated  projects

Kalinin

of  which

Balakovo

of  which

On-site  assistance

Associated  projects

On-site  assistance

Associated  projects

Number
of
contracts

16

6

10

19

6

13

35

6

29

33

6

27

Total

103

of  which

On-site  assistance

Associated  projects

24

79

Programmes

Contracts  concluded

Payments

Budget

19,08

5,02

14,06

18,00

6,45

11,55

22,73

6,86

15,87

19,73

4,58

15,15

79,54

22,91

56,63

%
of  the
budget

Number
of
contracts

Amount

%
of  the
budget

%
of  the
contracts

Amount

%
of  the
contracts

%
of  the
budget

100

26

74

100

36

64

100

30

70

100

23

77

100

29

71

6

5

1

6

5

1

11

3

8

12

5

7

35

18

17

7,71

4,72

2,99

6,26

5,98

0,28

9,78

7,02

2,76

8,62

3,65

4,97

32,38

21,37

11,01

40

94

21

35

93

2

43

102

17

44

80

33

41

93

19

100

61

39

100

96

4

100

72

28

100

42

58

100

66

34

2,16

1,35

0,81

3,37

3,09

0,28

6,63

3,87

2,76

4,75

1,79

2,96

16,91

10,10

6,81

28

29

27

54

52

100

68

55

100

55

49

60

52

47

62

11

27

6

19

48

2

29

56

17

24

39

20

21

44

12

Source:  The  Commission’s  programmes  and  accounts  and  the  supply  agencies’  reports.

5.11. With  regard  to  the  same  four  power  plants,  while
93 %  of  the  indicative  budgets  earmarked  for  on-site
assistance  were  covered  by  contracts  at  the  end  of  1997,
the proportion was only 19 % in the case of the projects
related  specifically  to  on-site  assistance.  Even  though  the
project  contracts  were  to  be  concluded  shortly  after  the
on-site  assistance  contracts,  serious  delays  were  noted  at
most of the power plants. This being the case, in the end
the  duration  and  cost  of  the  on-site  assistance  contracts
were  disproportionate  to  the  actual  projects  they  were
supposed  to  accompany.  The  Commission  took  no
significant  steps  to  check  this  trend,  even  though  it
became  evident  when 
the  1992  programme  was
implemented.  In  the  two  oldest  power  plants,  where  the
needs  were  most  urgent  (Sosnovy  Bor  and  Kola),  the
results  achieved  account  for  exceptionally  low  sums,
despite  sizeable  investment  in  technical  assistance.  This
imbalance is striking in the case of Kola, where payments
account  for  just  2 %  of  the  budget  for  the  projects,
despite the fact that 48 % of the amounts earmarked for
on-site  assistance  were  disbursed.

5.12. The  main  reasons  for  projects  being  delayed
were:

(a)  the 

extreme 

slowness  with  which  purchasing
procedures  and,  in  particular,  matters  concerning  the
origin  of  equipment  are  dealt  with,  which 
is
compounded  by  the  Commission  departments’  failure
or  tardiness  in  reacting  to  problems  referred  to  them

(water  analysers  and  computer  equipment  at  Kalinin
and  spare  parts  at  Kola  and  Balakovo);

(b) administrative 

tends 

inertia 

to  give 

the
that 
impression  that  tendering  procedures  are  in  progress
in  situations  where  a 
technical  or  commercial
monopoly  exists  (waste  incineration  at  Kola),  instead
of  regulating  these  situations  by  applying  alternative
procedures (28)  that  will  ensure  that  supplies  are
obtained  at  a  reasonable  price;

(c)  the  granting  of 

licences  by  the  Russian  safety
authorities 
concentrations,
water chemistry and monitoring the bituminisation of
waste  in  Kalinin);

(combating  hydrogen 

(d) late  recognition  of  the  scope  for  synergy  between  the
programmes at the various power plants (safety valves
at  Balakovo  and  Kalinin);

(e)  the  unsatisfactory  standard  of  the  specifications  and
technical  evaluations  (vibration  analysis  at  Kalinin,
water  chemistry  at  Balakovo  and  safety  valves  at
Kozloduy);

(f)  the  lack  of  satisfactory  procedures  governing  the
preparation  and  monitoring  of  mixed  projects
combining  supplies  and  computer  developments
(computer  network  at  Sosnovy  Bor,  simulators  at
Kola  and  maintenance  management  at  Kalinin).

(28) Western  operators  faced  with  the  same  problem  use
substitute  procedures,  such  as  itemising  and  analysing  prices
or  concluding  framework  contracts.

C  35/20

EN

Official  Journal  of  the  European  Communities

9.2.1999

5.13. Both  recipients  and  on-site  assistants  highlight  the
failure  to  respect  the  timetables  set  out  in  the  initial
action  plans,  and  the  unforeseeable  nature  of  the  actual
timing  of  the  delivery  of  supplies,  which  is  particularly
important  when  equipment  can  only  be  installed  during
the  power  plants’  annual  shut-down  periods.  The  main
grievances  concern  the  slowness  in  preparing  calls  for
tenders and contracts, the complexity and sluggishness of
the  Commission’s  procedures,  the  fact  that  there  are  no
timetables that are binding on the various parties, the low
level of awareness concerning the state of progress of the
files  and  the  inferior  role  accorded  to  recipients  in  terms
of project management, particularly as regards evaluating
tenders  and  issuing  acceptances.

likely  that  these 

increase in the powers of the safety authorities. In Russia
it  appears 
latter  procedures  will
increasingly slow down the execution of the programmes,
because of slowness in understanding and taking account
of  the  existing  regulations,  albeit  in  an  uncoordinated
manner. The same is also true of the tasks and resources
needed  to  apply  them.  The  role  of  on-site  assistance  as  a
catalyst  in  relations  between  the  partners  is  also  a
determinant  of  success  in  this  area.  The  Commission
should  therefore  ensure  that  the  experience  acquired  in
connection  with  the  new  procedures  at  each  power  plant
is  promptly  shared  with  the  other  sites.

in 

given 

since, 

the  quality  of 

implementing  projects
5.14. The  progress  made 
the  on-site
depends  primarily  on 
assistance-providers 
the  method  of
organisation  chosen,  they  are,  realistically  speaking,  the
only  ones  who  can  take  charge  of  the  operations.  The
Commission’s  supervision  has  lagged  too  far  behind  to
enable  services  to  be  brought  into  line  with  optimum
practice,  which  has 
led  to  widely  differing  results
depending on the types of measures and the power plants
involved.

Assistance  to  the  safety  authorities

in 

the  European 

licences,  despite 

5.15. Significant  progress  has  been  made 
the
assistance  provided  to  the  safety  authorities  in  respect  of
granting 
to
harmonise standards and regulations (see paragraph 3.1).
In Russia, EU assistance has helped the safety authorities
to establish legislative instruments and general procedures
enabling them to set up a framework for implementation
of  the  modernisation  programmes.  These  authorities’
activities  are,  however,  hindered  by  the  limited  financial
resources  available  to  them.

failure 

5.16. The  Commission’s  approach  towards  granting
licences  for  the  equipment 
it  finances,  termed  the
‘two-plus-two  approach’,  consists  of  providing,  for  each
project, assistance to the operators within the framework
of on-site assistance, on the one hand, and, on the other,
assistance  to  the  safety  authorities  in  respect  of  granting
licences.  As  in  the  case  of  the  assistance  given  to  the
operators,  the  east  European  safety  authorities  are
assisted  by  their  west  European  counterparts,  who
thereby  transfer  know-how  to  them.  The  problem  with
this  approach 
in  achieving
coordination  and  cooperation  between  four  partners.

the  difficulty 

lies 

in 

5.17. The  problems  connected  with  the  granting  of
licences  came  to  light  at  a  late  stage  as  far  as  the
equipment  financed  by  TACIS  is  concerned,  owing  to
delays  in  carrying  out  programmes  and  the  gradual

Safety  studies  and  analyses

5.18.
In  June  1997  the  Russian  authorities  had  received
only one final report concerning the studies that had been
provided for at a cost of some ECU 40 million, of which
some  ECU  34  million  was  paid,  under  the  1991  TACIS
programme. Several large contractors pointed to Russia’s
non-ratification  of  the  Vienna  Convention  and  doubts
concerning  the  civil-liability  arrangements  as  reasons  for
refusing  to  forward  the  results  of  the  studies  to  the
recipients,  despite  the  further  clarifications  provided  in
the  Protocol  to  the  Agreement  signed  between  the
Commission  and  the  Russian  Federation  in  February
1995.  Under  these  conditions,  the  usefulness  of  these
studies  to  the  recipients  and  their 
impact  on  the
substance  of  the  Russian  modernisation  programmes  can
only  be  diminished.

the  contractor  and 

5.19. The  study  contracts  concerning  design  safety  are
awarded  mainly  to  Russian  design  institutes  by  means  of
subcontracts.  The  specifications  in  the  subcontracts  are
often  identical  to  those  in  the  main  contract,  which
makes  it  extremely  difficult  to  evaluate  the  respective
workloads  of  the  EU  contractors  and  their  Russian
subcontractors.  The  way  in  which  the  work  is  divided
between 
is,
however, essential as far as the transparency of the prices
is  concerned,  because,  according  to  the  contracts,  the
western experts’ fees are 10 to 15 times higher than those
paid 
equivalent
qualifications. In one of the cases examined (study of the
embrittlement  of  the  reactor  vessels  at  Kola  and
Novovoronesh),  the  value  of  the  subcontract  which  the
Commission  imposed  on  the  tenderers  without  making
an  adequate  prior  analysis  had  to  be  renegotiated
upwards  after  the  main  contract  had  been  awarded.

the  subcontractor 

east  European 

experts  with 

to 

5.20. The  subcontracts  contain  a  very  one-sided  clause
which  stipulates  that  the  payments  to  the  subcontractor
may  only  be  made  after  the  Commission  has  paid  the
invoices issued by the main contractor. In three cases (29)
the  Russian  subcontractors  did  not  receive  a  large

(29) Contract  Nos  93-0490,  93-0502  and  95-0844.

9.2.1999

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Official  Journal  of  the  European  Communities

C  35/21

proportion  of  the  amounts  owing  to  them  from  the  Commission’s  contractors,  even  though  all
the work stipulated in the subcontracts had been carried out. The slowness with which both the
contractors  and  the  Commission  settle  the  financial  aspects  of  contracts  is  damaging  to  the
subcontractors  and  to  the  partnership  with  the  EU.

Actual  mobilisation  of  the  appropriations

5.21. Table  7  provides  an  overview  of  the  Commission  decisions  actually  implemented  via
contracts  as  at  31  December  1997.  The  volume  of  the  contracts  and  payments  recorded  in  the
management accounts has been corrected in the table to remove the main anomalies detected in
connection  with  the  description  of  the  1991  TACIS  programme  allocations 
in  the
abovementioned  accounts  and  especially  the  contracts  with  the  supply  agencies.

PHARE  and  TACIS  decisions  covered  by  actual  contracts  as  at  31  December  1997

Table  7

(million ECU)

300,0

300,0

250,0

250,0

200,0

200,0

150,0

150,0

100,0

100,0

50,0

50,0

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Beschlüssexxxxxx
Decisions

Beschlüssexxxxxx

Tatsächlich vergebene Verträge
Actual contracts

Tatsächlich vergebene Verträge

Tatsächliche Zahlungen

Tatsächliche Zahlungen
Actual payments

Field of action

 
 
 
 
 
 
 
 
 
 
 
 
 
C  35/22

EN

Official  Journal  of  the  European  Communities

d
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Operational  safety

Generic  studies  and  design

Safety  authorities

Fuel  and  waste

Chernobyl

Planning  and  management

ISTC/USTC

Miscellaneous  and  not  allocated

9.2.1999

(million  ECU)

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106,9

80,4

25,6

10,5

4,8

18,3

33,5

7,8

Source:  Audit  of  the  Commission’s  revenue  and  expenditure  account  (De´sire´e)  as  at  31  December  1997.

Total

786,1

610,2

— −118,0

492,2

306,6

— −18,7

287,9

In  total,  63 %  of  the  appropriations  allocated
5.22.
under  the  decisions  result  in  contracts  and  37 %  in
payments.  This  actual 
level  of  mobilisation  of
appropriations  is  especially  poor  in  the  case  of  the
operations  concerning  Chernobyl  (20 %  in  the  case  of
contracts  and  8 %  in  that  of  payments)  and  fuel  and
radioactive  waste  (16 %  for  payments).

5.23. The  appropriations  for  which  contracts  still  have
to be concluded amount to ECU 294 million, rather than
the ECU 176 million shown in the management accounts.
This volume of appropriations results from decisions that
are,  on  occasion,  old  and  does  not  always  correspond  to
interests  of  sound
the  actual  requirements.  In  the 
management  with  due  regard  to  the  proper  use  of  public
funds these allocations should be examined carefully and,
with  the  recipients’  agreement,  the  programmes  should
either  be  closed  or  there  should  be  a  reallocation,  taking
account  of  the  updated  requirements.

6.  CONCLUSION

Overall  assessment

6.1. The  EU’s  intervention  in  the  field  of  nuclear  safety
in east European countries was motivated by the desire to
protect  their  populations  from  the  consequences  of  a
Chernobyl-type  accident  and  also,  within  the  framework
of  the  PHARE  and  TACIS  programmes,  to  set  up  a
partnership  between  the  nuclear-sector  industries  of  both
the  EU  and  eastern  Europe  and  to  integrate  it  into  a
market  economy.  It  was  with  this  twofold  prospect
in  mind 
the  Commission  allocated  almost
ECU  850  million (30)  for  programmes  to  support  nuclear
safety  in  the  CEECs  and  the  NIS  between  1990  and

that 

1997,  ECU  786  million (31)  of  which  was  committed
under  the  PHARE  and  TACIS  programmes,  resulting  in
payments  worth  ECU  307  million (32).

6.2. Although  progress  has  been  achieved  in  a  field  of
intervention  that  was  new  to  the  EU  and  in  which  there
had  previously  been  little  opportunity  for  international
cooperation,  the  audit  of  the  operations  showed  that  the
results  have  been  achieved  too  slowly  and  that  the
programmes’ short-term objectives had not been achieved
by  the  end  of  1997,  owing  to  both  ambiguities  at  the
strategic  level  and  implementation  procedures  that  were
not  really  appropriate  to  this  specialised  and  very
complex  environment.  Moreover,  at  the  end  of  1997
there was no methodology to enable an overall evaluation
of the progress of the safety arrangements at each power
plant.  The 
international
conference  in  1999,  where  the  intention  will  be  to
evaluate  the  progress  made,  and  it  is  also  working  on
establishing  the  safety 
indicators  that  are  currently
lacking.  Under  these  conditions  it  is  not  at  this  time
possible  to  produce  an  objective  report  on  the  progress
that  has  been  made.  Consideration  must  therefore  be
given  to  concrete  measures  that  will 
increase  the
effectiveness,  efficiency,  economy  and  transparency  of
Community  action.

to  organise  an 

IAEA 

is 

Effectiveness

6.3. The  lack  of  clarity  and  realism  in  the  strategy  (see
paragraphs  3.1  to  3.11),  the  closed-circuit  development
of  the  PHARE  and  TACIS  programmes  (see  paragraphs
3.12  to  3.20)  and  the  Commission’s  excessive  transfer  of
responsibility  to  third  parties  (see  paragraphs  4.3,  5.4  to

(31) See  Table  1.  This  amount  includes  the  contribution  to  the

ISTC  and  USTC  totalling  ECU  65  million.

(30) See  Table  1.1  in  Annex  1.

(32) See  Table  1.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9.2.1999

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Official  Journal  of  the  European  Communities

C  35/23

5.5)  resulted  in  prevarication  and  procrastination  as
regards  the  action  to  be  taken,  a  lack  of  consistency  in
the allocation of resources (see paragraphs 5.1 to 5.3 and
5.6  and  5.7)  and  delays  which  undermined  the  value  of
EU  action  (see  paragraphs  5.8  to  5.14).  Better  account
should be taken of the economic circumstances prevailing
in  the  recipient  countries  when  the  strategy  is  revised,
especially  as  regards  the  future  of  older-design  power
plants.  Cooperation  with  other  partners,  especially  the
IAEA and the EBRD, as well as with the recipient States,
should  be 
increased.  The  strategic  and  contractual
frameworks  need  to  be  clarified  in  order  to  promote
mutual  trust  and  cooperation  and,  in  addition,  the
targeted objectives must be defined jointly beforehand by
the EU and the recipients. Furthermore, priority attention
should  be  paid  to  developing  and  using  indicators,  in
collaboration  with  the  IAEA,  that  will  enable  the
effectiveness  of  the  programmes  and  safety  developments
at  each  power  plant  to  be  measured.

Efficiency

6.4. The  departments  responsible  for  executing  the
programmes  should  be  merged  and  equipped  with
managerial  and  staff  resources  that  are  equal  to  the
complexity and scale of the task and able to act with the
necessary  speed  of  action  which,  since  1990,  has  never
been  the  case  (see  paragraphs  4.12  to  4.16).  The
Commission  should  consider  redeploying  its  managerial
staff 
a
Directorate-General  whose  area  of  specialisation  is  more
suited  to  managing  technically  complex  projects  than  is
the case at present. A reorganisation of this nature would
reduce  the  effort  of  interdepartmental  coordination,  the
efficiency  of  which  has  yet  to  be  proven.  It  would  allow
the  highly  specialised  skills  that  are  available  to  the
Commission  to  be  put  to  better  use.

programmes 

allocating 

and 

the 

to 

6.5. These  departments  should  be  in  a  position  to
guarantee control of cooperation and permanent relations
with 
the  recipients,  without  excessive  reliance  on
intermediaries.  Within  the  framework  of  on-the-spot
monitoring,  the  functions  of  planning,  implementing  and
evaluating  projects 
strengthened.  The
should  be 
departments  responsible  for  them  should  be  given  the
authority  and  resources  to  enable  them  to  identify
problems  promptly  and  resolve  them  in  good  time.

6.6. Lastly,  the  procedures  that  were  at  the  root  of
many  of  the  delays  must  be  reexamined  and  adapted  to
the  particular  technological  constraints  in  this  sector  in
accordance with best practice (see paragraphs 4.3 and 4.4
and  5.12).

Economy

6.7. The transparency of account entries (see paragraphs
4.5  to  4.10  and  4.19  and  4.20)  should  make  it  possible
for  the  accounts  to  become  genuine  management  tools
that  can  serve  as  indicators  of  the  performance  obtained
and  prevent  the  counter-productive  freezing  of  funds
where  measures  have  not  been  defined  or  have  already
allocation  of
been  overtaken  by 
appropriations that have not been mobilised via contracts
(ECU  294  million,  see  paragraphs  5.21  to  5.23)  should
be  examined 
light  of
requirements  and  results.

fully  and  updated 

events.  The 

the 

in 

6.8. The  matter  of  subcontracting  certain  measures  to
institutions  or  enterprises 
in  the  recipient  countries
should  be  reviewed,  as  there  is  a  risk  that  western
contractors  will  be  in  a  position  to  obtain  profits  in
excess  of  the  commercial  margins  normally  applicable  to
their sector of activity (see paragraph 5.19), to the cost of
the  Community  budget,  by  having  some  of  the  work
entrusted  to  them  carried  out  by  subcontractors  in  east
European  countries.  Furthermore,  direct  cooperation
between  the  EU  and  some  of  these  institutions  or
companies  in  the  recipient  countries  would  establish  the
confidence  that  is  necessary  to  both  parties  and  is  still
often  lacking  (see  paragraphs  4.17  and  4.18,  5.1  and
5.18  to  5.20).

6.9. There  are  no  tendering  procedures  for  contracts
with  on-site  assistants  and  they  are  rare  in  the  case  of
supply  agencies,  which  results  in  fees  being  high  (see
paragraphs  4.1  to  4.2  and  4.11).  They  are,  by  contrast,
excessively  cumbersome  where  supply  contracts  are
involved,  which  results  in  implementation  being  delayed
(see  paragraphs  4.4  and  5.12).  The  Commission  should
be  guided  in  this  area  by  the  best  practice  of  other
donors,  so  as  to  ensure  that  the  prices  obtained  are
reasonable, that rules of origin are not applied at the cost
of promptness or the measures’ consistency with those of
other  donors,  and  that  the  recipients  are  more  fully
involved in the main stages of the procedure. In any case,
the  rules  concerning  the  use  of  the  derogation  system
need  to  be  defined  so  that  a  sudden  loss  of  control  does
not have adverse repercussions on the Community budget
(see  paragraph  4.2).

Transparency  of  the  operations

6.10. Owing  to  the  specialised  nature  of  the  operations
in  support  of  increased  nuclear  safety  in  east  European
countries,  they  should  be  shown  separately  from  the
amounts  for  PHARE  and  TACIS  programmes  in  the  EU
budget.  Clear  identification  of  measures  in  the  nuclear
field  would  thus  enable  the  budgetary  authority  to
monitor  the  measures  in  a  more  transparent  way,  by
requiring  the  Commission  to  submit  regular,  detailed
reports  on  the  conduct  of  the  programmes  and  progress
recorded  (see  paragraph  3.6).

C  35/24

EN

Official  Journal  of  the  European  Communities

9.2.1999

This  report  was  adopted  by  the  Court  of  Auditors  in  Luxembourg  at  its  meeting  of
12  November  1998.

For  the  Court  of  Auditors

Bernhard  FRIEDMANN

President

9.2.1999

EN

Official  Journal  of  the  European  Communities

C  35/25

ANNEX  1

Background  to  the  PHARE  and  TACIS  nuclear-safety  programmes

Community  background

In  1975  the  Council  adopted  a  resolution (1)  defining  the  Commission’s  role  with  regard  to  the
1.
technological problems of nuclear safety. Since these problems extend beyond the Community’s borders, the
Commission  was  to  act  as  a  catalyst  for  Member  States’  initiatives,  seek  a  common  position  within
international organisations, promote the progressive harmonisation of safety requirements and criteria and,
on  these  bases,  submit  to  the  Council  the  optimum  draft  Community  provisions.

2. The  Chernobyl  accident  in  1986  revealed  the  extent  of  the  safety  problems  posed  by  existing
Soviet-designed  nuclear  reactors.  Under  the  mandate  laid  down  in  the  Euratom  Treaty (2),  Community
action  was  at  first  restricted  to  protecting  the  public  from  radiation  in  the  event  of  a  nuclear  accident (3).

In  June  1992  the  Council  adopted  a  new  resolution  concerning  nuclear  safety (4)  which  replaced  the
3.
1975  resolution  in  the  light  of  the  cooperation  with  the  CEECs  and  the  NIS  and  called  on  the  Member
States  and  the  Commission:

(a)  to  increase  their  joint  measures  with  these  countries;

(b) to  seek  to  raise  nuclear  installations  in  east  European  countries  to  safety  levels  comparable  with  those

applied  in  the  Community;

(c)  to  act  in  a  coordinated  manner,  within  the  IAEA,  to  define  a  system  of  internationally  accepted

nuclear-safety  criteria  and  requirements.

Euratom  loans

4. Euratom  loans  are  limited  to  50 %  of  project  costs.  Where  EBRD  co-financing  is  involved,  the
cumulative total with the Euratom financing may not exceed 70 % of a project’s total cost. The loans must
be  guaranteed  by  the  recipient  State.  The  projects  must  form  part  of  the  global  energy  plan  and  be  proven
to  be  economically  viable.  These  various  factors  make  the  consideration  of  loan  applications  a  complex
matter.  As  of  31  December  1997  no  loan  had  yet  been  granted,  but  three  projects  were  under
consideration:

(a)  a  loan  of  ECU  100  million,  applied  for  in  August  1995,  which  was  to  be  supplemented  by  French,
German  and  Russian  export  credits  and  a  national  loan,  to  finance  a  ECU  220  million  project  to
modernise  units  5  and  6  of  the  Kozloduy  power  plant  in  Bulgaria.  If  the  loan  agreement  can  be  signed
before  the  end  of  1998,  the  application  will  have  been  under  consideration  for  three  and  a  half  years;

(b) a loan of ECU 623 million, applied for in July 1995, which was to be supplemented by a loan from the
EBRD  and  by  the  State’s  own  funds  to  finance  a  ECU  1 265  million  project  to  modernise  unit  2  at
Khmelnitsky and unit 4 at Rovno in the Ukraine. If the loan agreement can be signed in July 1998, the
application  will  have  been  under  consideration  for  three  years;

(c)  a loan of ECU 335 million, applied for in December 1995, which was to be supplemented by the State’s
own funds, for a project to complete and modernise Kalinin unit 3 in Russia, the provisional estimated
cost of which was ECU 670 million. In February 1998 consideration of the project was slowed down by
the  Russian  party’s  failure  to  communicate  financial  information  needed  for  the  project  evaluation.

(1)  Council  resolution  of  22  July  1975  on  the  technological  problems  of  nuclear  safety  (OJ  C  185,  14.8.1975,  p.1).
(2)  The  Euratom  Treaty  does  not  relate  directly  to  the  safety  of  nuclear  power  plants.  However,  the  obligations  arising
from  Chapter  3,  concerning  radiological  protection,  and  the  safeguarding  of  fissile  materials  entrusted  to  the
Commission  under  Chapter  7,  are  in  practice  connected  with  the  safety  measures  taken  at  power-plant  level.

(3)  Council  Directive  89/618/Euratom  of  27  November  1989  on  informing  the  general  public  about  health-protection

measures  to  be  applied  and  steps  to  be  taken  in  the  event  of  a  radiological  emergency.

(4)  Council  resolution  of  18  June  1992  on  the  technological  problems  of  nuclear  safety  (OJ  C  172,  8.7.1992,  p.2).

C  35/26

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Official  Journal  of  the  European  Communities

9.2.1999

5. While recourse to Euratom as regards large-scale operations has increased little, borrowing from banks
in the EU, particularly in Germany, have been used to finance smaller-scale projects by the power plants at
Sosnovy  Bor  (simulator)  and  Balakovo  (waste-processing  installations).

Multilateral background

6.
In  response  to  the  international  community’s  expectations,  the  operators  of  144  nuclear  power  plants
worldwide  met  in  Moscow  on  15  May  1989  and  founded  the  WANO  association  to  promote  the
improvement  of  nuclear  power  plant  safety  and  performance.  In  July  1990  WANO  decided  to  draw  up  a
programme  for  improving  the  safety  of  VVER  440/230  reactors.  This  programme  was  submitted  in  July
1991  and  endorsed  by  the  IAEA’s  Nuclear  Safety  Committee  (INSAG).  Implementation  of  this  programme
began in Bulgaria with measures financed under the PHARE programme. In order to extend its activities to
other power plants, WANO set up a VVER Steering Group comprising the operators of the Novovoronesh,
Kola,  Bohunice  and  Kozloduy  power  plants  and  western  operators.  When  the  TACIS  on-site  assistance
programmes  were  launched  in  1993,  the  EU  asked  WANO  to  perform  the  coordination  and  advisory
functions.  The  VVER  Steering  Group  has  extended  its  activities  to  all  types  of  reactor  of  Soviet  origin  and
took  the  name  ‘WANO  Advisory  Committee  Paris  and  Moscow’.

In  parallel,  in  1990,  the  IAEA  began  working  with  the  east  European  countries  to  set  up  safety
7.
programmes agreed at international level. Furthermore, in 1994 the IAEA took the initiative of promoting a
Convention  on  Nuclear  Safety,  which  was  signed  by  66  countries  at  the  end  of  1997.

8.
In  view  of  the  volume  of  finance  that  needed  to  be  mobilised  for  the  east  European  countries,  in
1992 (5) the members of G7 asked the member countries of G24 to supplement their bilateral programmes
with a multilateral fund and to strengthen the coordination mechanisms. The multilateral fund was set up at
the EBRD in March 1993 and called the NSA (Nuclear Safety Account). In order to strengthen international
coordination, a structure called NUSAC was set up within the Commission which had already been given a
general  mandate  to  coordinate  G24  aid  to  east  European  countries  at  the  G7  Paris  summit  in  1989 (6).

9. With  regard  to  Chernobyl,  in  1994 (7)  the  G7  and  the  EU  agreed  on  an  additional  action  plan  and  the
related Protocol to the Agreement was signed with the Ukraine in December 1995. This plan was to lead up
to the closing of Chernobyl by the year 2000 and, in consideration of that, to assist with the completion of
three  reactors  that  were  under  construction  on  the  sites  of  the  Zaporozhe,  Rovno  and  Khmelnitsky  power
plants.  In  the  case  of  unit  4  at  Chernobyl,  a  plan  to  construct  a  protective  mantle  (SIP)  was  added  to  the
1995 Protocol with the Ukraine in 1997. Following the G7 Denver summit in June 1997, a new multilateral
fund  was  set  up  at  the  EBRD  to  finance  this  protective  mantle.  In  September  1997  the  Commission
proposed to the Council that a maximum contribution of ECU 100 million be allocated to this fund out of
the  TACIS  appropriations  for  1998  and  1999.

10. Table  1.2  gives  an  idea  (the  database  set  up  by  NUSAC  is  incomplete)  of  the  volume  of  the
international  community’s  contributions  towards  nuclear  safety  in  the  CEECs  and  NIS.

11. This  aid  was  provided  at  a  time  when  the  situation  for  the  nuclear-energy  sector  was  unfavourable  in
economic terms and commercially difficult. The traditional markets of the nuclear industries in EU countries
and North America are shrinking. Although investment programmes to replace and modernise power plants
currently in operation exist, the prospects that new units will be constructed are very limited. The prospects
are greater in Japan and the Far East and very close links have been created between the nuclear industries
of  Japan  and  the  United  States  in  order  to  foster  cooperation  and  take  advantage  of  these  opportunities.

(5)  Conclusions  of  the  G7  Munich  summit  (Group  of  7  most  developed  countries)  of  10  July  1992.
(6)  The  G7  Paris  summit  in  July  1989  entrusted  the  Commission  with  the  task  of  coordinating  aid  provided  by  the  24
most developed countries (G24) for Poland and Hungary, which was subsequently extended to cover the other CEECs.
The  G7  London  summit  (July  1991)  called  for  specific  aid  and  coordination  to  be  developed  in  the  field  of  nuclear
safety. The G7 Munich summit (July 1992) extended this aid in the nuclear field to the NIS. The general coordination
mandate  given  to  the  Commission  remained  in  force  during  these  successive  extensions.

(7)  G7  Naples  summit  in  July  1994.

9.2.1999

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C  35/27

12. Possible  commercial  outlets  in  east  European  markets,  which  were  closed  in  the  past,  and  the
development  of  industrial  cooperation  with  the  nuclear  industries  in  these  countries  are  of  strategic
importance  for  the  EU’s  nuclear  sector.

13. Table  1.3  details  the  financing  agreements  concluded  by  the  EBRD  under  the  NSA.

Background  in  the  recipient  countries

14. The  majority  of  the  reactors  in  the  CEECs  and  NIS  are  Soviet-designed  RBMK  or  VVER  reactors.
There have been three generations of RBMK technology. The first of these reactors was put into service in
1973 (Sosnovy Bor 1) and the most recent in 1990 (Smolensk 3). VVER technology has also passed through
three  main  generations.  The  VVER  440-230  technology,  which  was  put  into  service  between  1972
(Novovoronesh  3)  and  1982  (Kozloduy  4),  is  the  oldest.  It  was  followed  by  VVER  440-213  technology,
which  went  into  service  between  1982  (Paks  1  and  Kola  3)  and  1988  (Dukovany  4).  The  most  modern
generation,  the  VVER  1000-320  class,  which  went  into  service  between  1981  (Novovoronesh  5)  and  1995
(Zaporozhe 6), is still being used for the units under construction (Rovno 4, Khmelnitsky 2 and Kalinin 3).
The  stock  of  Soviet-designed  reactors  is,  on  average,  no  older  than  that  in  western  countries.  The  age  or
modernity of a reactor is relevant in terms of the extent to which safety was taken into account when it was
designed, rather than the year in which it went into operation. From the point of view of safety, the VVER
1000-320  reactors  are  closest  to  western  designs.

15. The  difficult  economic  situation  in  the  CEECs  (particularly  Bulgaria),  and  especially  in  the  NIS,  is
impeding the implementation of these countries’ modernisation programmes, which include the western aid
programmes  and  substantial  calls  on  borrowed  funds,  including  Euratom  loans.

C  35/28

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Official  Journal  of  the  European  Communities

9.2.1999

Table 1.1

Appropriations  allocated  to  nuclear  safety  in  the  CEECs  and  NIS  by  the  European  Union  between  1990
and  1997

Budget  headings  and  managing  departments

Appropria-
tions
allocated

(million  ECU)

of  which

1990

1991

1992

1993

1994

1995

1996

1997

PHARE  and  TACIS  programmes

786,1

3,5

73,6

109,3

113,2

119,0

133,0

132,5

102,0

of
which

PHARE  —  aid  for  economic  restructuring  in
the  CEECs  (B7-500,  DGIA)

150,7

3,5

16,7

29,3

25,2

31,0

27,0

6,0

12,0

TACIS  —  technical  cooperation  with  the  NIS
(B7-520,  DGIA)

Other  budget  headings

of
which

Training  and  exchange  of  nuclear-safety
experts in the CEECs and NIS; introduction of
a  system  of  accounting  for  fissile  materials  in
Russia  (B4-2001,  DG  XI)

Cooperation  with  the  Soviet  Union  and,
subsequently, the CEECs and NIS (as of 1993)
in  the  field  of  nuclear  safety  (B6-8201,
DGXII)

Cooperation  with  the  CEECs  and  NIS  in  the
field  of  nuclear  safety  (B/534,  DGIA)

Community  contribution 
Nuclear  Safety  Account 
DGIA)

to 
(NSA) 

the  EBRD’s
(B7-630,

635,4

62,4

6,9

28,0

7,5

20,0

56,9

80,0

88,0

88,0

106,0

126,5

(cid:77)

90,0

3,0

7,0

8,0

32,0

5,4

7,0

1,0

1,0

1,8

3,1

3,0

7,0

7,0

11,0

(cid:239)(cid:78)

3,6

3,9

20,0

Source:  Commission  Decisions  concerning  nuclear  safety  under  the  PHARE  and  TACIS  programmes  (where  there  is  no  specific  budget  heading)  and

commitment  appropriations  in  the  case  of  other  budget  headings.

Grand  total

848,5

3,5

76,6

116,3

121,2

151,0

138,4

139,5

102,0

(cid:239)
(cid:239)
(cid:239)
(cid:239)
(cid:239)
(cid:239)
(cid:239)
(cid:239)
(cid:239)
(cid:239)
(cid:239)
(cid:239)
(cid:239)
9.2.1999

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C  35/29

Breakdown  by  recipient  and  source  of  finance  of  funds  received  and  committed  from  the  international
community

(million  ECU)

Table 1.2

Recipients

Russian  Federation

Ukraine

Regional  or  not  allocated

Bulgaria

Lithuania

Slovakia

Czech  Republic

Hungary

Armenia

Romania

Belarus

Kazakhstan

Slovenia

Poland

Latvia

Estonia

Uzbekistan

Kirgizstan

Moldovia, Georgia, Azerbaidjan

%

n
a
e
p
o
r
u
E

n
o
i
n
U

243,6

213,9

16,1

51,1

9,2

27,5

24,4

22,2

11,2

1,4

2,4

5,1

2,5

1,0

1,0

0,9

0,4

0,4

0,0

r
e
h
t
O

f
o

s
e
c
r
u
o
s

e
c
n
a
n
i
f

301,5

124,2

202,6

60,8

82,1

17,4

17,1

14,2

6,3

9,5

4,9

1,9

0,7

1,5

0,5

0,4

0,4

0,2

0,6

l
a
t
o
T

545,1

338,0

218,7

111,8

91,3

44,9

41,5

36,4

17,5

10,9

7,3

6,9

3,2

2,5

1,5

1,3

0,8

0,6

0,6

%

37

23

15

8

6

3

3

2

1,2

0,7

0,5

0,5

0,2

0,2

0,1

0,1

0,1

0,0

0,0

Total

634,4

846,4

1 480,2

100

43

57

100

Source:  NUSAC  —  updated  data  as  at  31  December  1997.
NB: Reconciliation  of  the  Commission’s  accounting  commitments  (ECU  786,1  million)  for  PHARE  and  TACIS
programmes  alone  and  those  recorded  by  NUSAC  (ECU  634,4  million)  reveals  the  highly  approximate  nature  of
NUSAC’s database.

Sources  of  finance

European  Union

Nuclear  Safety  Account

United  States’  bilateral  aid

European  bilateral  aid

Japanese bilateral aid

IAEA

Canadian  bilateral  aid

Miscellaneous

l
a
t
o
T

634,4

257,4

219,5

206,2

103,8

27,9

19,1

11,9

Total

1 480,2

(million  ECU)

%

43

17

15

14

7

2

1

1

100

 
C  35/30

EN

Official  Journal  of  the  European  Communities

9.2.1999

Financing  agreements  under  the  NSA  concluded  by  the  EBRD  as  at  31  December  1997

Table 1.3

Financing agreements

Implementation  as  at  31  December  1997

Date  of  conclusion

Amount

Contracts
concluded

Balance  to  be
contracted

Payments  made

Outstanding
balance payable

(million  ECU)

Bulgaria

Kozloduy  1-4

Lithuania

Ignalina  1-2

June  1993

February  1994

Ignalina safety analysis

April  1994

Russian  Federation

Sosnovy  Bor  1-4

Kola  1-2

Novovoronesh  3-4

Gozatomnadzor  (GAN)

June  1995

Ukraine

Chernobyl  1-3

Source:  EBRD.

November  1996

Total  for  financing  agreements

24,0

24,0

43,1

34,8

8,3

76,4

30,4

21,9

23,3

0,9

118,0

118,0

261,5

23,5

23,5

41,2

33,3

7,9

29,1

21,3

4,0

2,9

0,9

9,8

9,8

103,6

0,5

0,5

1,9

1,5

0,4

47,3

9,1

17,9

20,4

—

108,2

108,2

157,9

22,1

22,1

38,1

32,1

6,0

6,5

3,9

1,2

1,0

0,4

2,8

2,8

69,5

1,9

1,9

5,0

2,7

2,3

69,9

26,5

20,7

22,3

0,5

115,2

115,2

192,0

9.2.1999

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Official  Journal  of  the  European  Communities

C  35/31

ANNEX  2

Operations  audited  and  visits  carried  out

Table 2.1

—  PHARE  and  TACIS  decisions  on  nuclear  safety  taken  by  the  Commission  since  1990

Table 2.2

—  List  of  the  contracts  audited

Table 2.3

—  Supplies  operations  audited  in  connection  with  contracts  with  supply  agencies

Table 2.4

—  Stage  reached  in  implementing  TACIS  contracts  with  supply  agencies

Table 2.5

—  Nuclear  authorities  and  power  plants  visited

C  35/32

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Official  Journal  of  the  European  Communities

9.2.1999

PHARE  and  TACIS  decisions  on  nuclear  safety  taken  by  the  Commission  since  1990

(million ECU)

Table 2.1

U
C
E
n
o

i
l
l
i

m

200

200

150

150

100

100

50

50

0

0

1990

1990

1991

1991

1992

1992

1993

1993

1994

1994

1995

1995

1996

1996

1997

1997

Programmes

Betalinger 

Payments
Betalinger 

Decisions
Afgørelser

Afgørelser

Kontrakter

Kontrakter
Contracts

Programme

Title

Total
amount  under
the  decision

of  which  allocated  to  nuclear  safety

Decision

Contracts

Payments

(million  ECU)

TACIS
WW9103
WW9204
WW9206
WW9306
WW9406
WW9507
WW9508
WW9606
WW9608
WW9707
WW9708
WW9711
WW9715
UK9402
UK9502
UR9601
PHARE
ZZ9112
ZZ9217
ZZ9317
ZZ9423
ZZ9528
ZZ9720
BG9107
BG9110
BG9202
BG9207
BG9311
BG9402
BG9407
BG9512
BG9608
CS9002
LI9101
LI9302

Energy
Regional  nuclear  safety
ISTC  nuclear  safety
Nuclear safety
Nuclear  safety  programme
Financing  proposal  for  ISTC
Nuclear  safety  programme
Financing  proposal  for  ISTC
Nuclear  safety  programme
ISTC  1997
USTC
Nuclear safeguards
Nuclear  safety  1997
Energy  sector  1994 
Energy  sector  Chernobyl
Action  plan  energy  in  Ukraine

Nuclear safety
Nuclear  safety  improvement
Nuclear safety
Regional  nuclear  safety
Regional  nuclear  safety
Nuclear  safety  1997
Energy
Safety  nuclear  power  plants
Nuclear safety
Energy  emergency  winter
Nuclear safety
Cross-border  cooperation
Nuclear safety
Nuclear safety
Nuclear safety
Environment  programme
Agriculture/energy Lithuania
General  technical  assistance  facility

Total

702,5
115
60
20
88
67,5
10
58,5
15
80
17
3
2
68
23,5
37,5
37,5
240,6
3,5

20
20
20
20
12
10
11,5
8,3
10
3,8

25
5
7
6
30
6
22,5
943,1

635,4
56,9
60
20
88
67,5
10
58,5
15
80
17
3
2
68
20,5
37,5
31,5
150,7
3,5

20
20
20
20
12
1,2
11,5
8,3
1
3,8
6
5
7
6
3,5
0,5
1,4
786,1

496
56,7
59,6
20,0
84,2
64,7
10
47,6
14,5
49,3
17

19,87
37,12
15,46
114,3
3,5
19,7
19,8
19,9
12,1

1,2
11,4
8,1
1
3,1
0,6
4,8
3,5
0,7
3,4
0,5
0,9
610,3

238,3
48,6
51,0
20,0
49,3
23,5
9,6
10,6
2,1
2,1
1,9

13,23
4,93
1,51
68,2
3,5
15,4
12
3
1,2

1,2
11,4
8,1
1
2,7
0,3
2,3
1,4

3,3
0,5
0,9
306,51

Source:  Commission’s  decisions  and  revenue  and  expenditure  account  (De´sire´e)  as  at  31  December  1997.

 
9.2.1999

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C  35/33

Table 2.2

List  of  contracts  audited

(million  ECU)

Decision

Project

Contract

Contractor

Recipient  countries Power  plants  involved

Amount

%

25

TACIS

On-site  technical  assistance

WW9204

WW9204

WW9406

WW9204

WW9204

WW9406

WW9204

WW9204

WW9406

WW9204

WW9204

WW9406

WW9204

WW9306

01.01

01.01

01.01

01.01

01.01

01.01

01.01

01.01

01.01

01.01

01.01

01.01

01.01

02.01

93-0958

94-1263

95-0964

93-0533

94-0120

95-1211

93-0411

94-0491

95-0933

93-0412

94-0116

95-2151

93-0410

94-0547

Nuclear  Electric  (=Magnox)

Nuclear  Electric  (=Magnox)

Nuclear  Electric  (=Magnox)

EDF

EDF

Kernkraftwerke  (KKE)

RWE-Biblis

RWE-Biblis

RWE-Biblis

Tractebel

Tractebel

Tractebel

EDF

EDF

Assistance  to  safety  authorities

WW9204

WW9306

03.01

03.01

94-1342

96-5287

Risk  audit

Risk  audit

Other  safety  studies  and  analyses

WW9103

WW9306

WW9306

WW9306

WW9103

UK9402

03.01

02.02

02.02

01.02

03.01

03.01

Direct  supply  contracts

WW9406

WW9204

WW9306

01.04

02.01

01.02

93-0504

95-0775

95-0774

95-0190

93-0972

95-1295

96-5580

94-1281

95-0242

EDF  (training  centre)

EDF  (training)

Tecnatom
(training  centre)

Siemens  (RVE  study)

EDF

Nukem

Corys  (simulators)

Sema  Group
(SPDS  prototype)

Contracts  with  supply  agencies

WW9306

WW9204

WW9306

WW9306

WW9508

02.01

01.01

02.01

01.01

01.01

94-1351

94-0046

94-1165

94-1355

96-5455

Fichtner

Crown  Agents

Crown  Agents

Italtrend

Italtrend

Other  technical  assitance  to  the  Commission

WW9204

WW9306

04.01

02.06

93-0895

95-2329

TPEG

TPEG

International  Science  and  Technology  Centre

Russia

Russia

Russia

Zaporozhe

Russia

Russia

Russia

Russia

Russia

Russia

Russia

Ukraine

Ukraine

Russia

Russia

Russia

Ukraine

Ukraine

Phare/Tacis

Ukraine

Sosnovy  Bor

Sosnovy  Bor

Sosnovy  Bor

Kola

Kola

Kola

Balakovo

Balakovo

Balakovo

Kalinin

Kalinin

Kalinin

Rovno

Rovno

General

General

General

General

General

RBMK

VVER  230

VVER  320

Russia

Kola

Phare/Tacis

VVER  230/213

Russia

Kalinin

Ukraine

Tacis

Tacis

Tacis

Tacis

Phare/Tacis

Phare/Tacis

General

General

General

General

General

General

General

AEA-T  (safety  assessment)

Russia

WW9206

01.01

95-1265

ISTC

Russia

General

161,88

22,11

0,27

0,94

1,32

0,40

2,26

1,81

0,14

0,95

2,19

0,50

1,95

4,58

0,58

4,22

3,58

3,09

0,49

23,54

5,40

1,20

1,10

2,98

4,67

8,18

6,39

0,28

4,12

1,99

83,62

24,67

12,05

3,96

28,44

14,50

10,43

4,36

6,07

12,22

12,22

C  35/34

EN

Official  Journal  of  the  European  Communities

9.2.1999

(million  ECU)

Decision

Project

Contract

Contractor

Recipient  countries Power  plants  involved

Amount

%

PHARE

On-site  technical  assistance

BG9202

BG9311

BG9407

05.01

02.01

02.01

x

x

95-0838

EDF

EDF

EDF

Assistance  to  safety  authorities

Bulgaria

Bulgaria

Bulgaria

Kozloduy

Kozloduy

Kozloduy

ZZ9217

01.01

94-0028

ANPA

Lithuania

Ignalina

Other  measures

LI9101

LI9302

LI9302

02.01

09.05

09.05

93-0195

93-0189

94-0359

Corys  (simulator)

Corys  (simulator)

Corys  (simulator)

Technical  assistance  to  the  Commission

BG9202

BG9311

BG9407

07.01

01.01

04.01

x

x

Nuclear  Electric  (PIU)

Nuclear  Electric  (PIU)

96-0445

DTN  (PIU)

Total

43

Source:  DG  IA’s  revenue  and  expenditure  account  (De´sire´e).

Lithuania

Lithuania

Lithuania

Bulgaria

Bulgaria

Bulgaria

Ignalina

Ignalina

Ignalina

Kozloduy

Kozloduy

Kozloduy

11,97

8

7,83

3,84

2,00

1,99

0,79

0,79

1,17

0,49

0,37

0,31

2,18

1,00

0,63

0,54

173,86

22

9.2.1999

EN

Official  Journal  of  the  European  Communities

C  35/35

Supplies  operations  audited  in  connection  with  contracts  with  supply  agencies

Table 2.3

Description  of  the  projects  and
contracts  with  the  supply  agencies
concerned

Project

Contractor

Power  plant  involved

(million  ECU)

Budget
(contract  not
signed)

Contract
(contract  signed)

Fichtner

WW9306

02.01

94-1351

5

5

Computer  information  system

U1.01/94A

Syseca

Spare  parts

Spare  parts

Spare  parts

R1.02/92D

Siemens

R1.02/92D

Bopp & Reuther

Balakovo

U1.03/93A

Limitorque

Rovno

Balakovo

Zaporozhe

Zaporozhe

Fire  protection  equipment

U1.03/94A

SVT

Crown  Agents

WW9204
WW9306

01.01
02.01

94-0046
94-1165

7

7

Water  chemistry

Laboratory analysis

Laboratory analysis

R1.03/92A

CITA

R1.03/92A

Millipore

R1.03/92A

Maihak

Kalinin

Kalinin

Kalinin

All  station  computer  network

R1.04/92A

Marex

Sosnovy  Bor

Condenser  cleaning

R1.02/92A

Taprogge

Repair  of  floor  coating
(fire  risk)

U1.01/92A

GEHOLIT

Balakovo

Rovno

Equipment  for  SG  control

U1.01/93A

intercontrole

Rovno

Italtrend

WW9306

01.01

94-1355

Water  chemistry  (secondary
side)

Capillary electrophoresis
analyser

26

21

R1.03/94A1

CITA

R1.03/94A2

Primary  circuit  water  quality

R1.03/94B

Automated  system  for
maintenance

Safety valves

Diagnosis system

Thermal  H2  recombiner

R1.03/94E

R1.03/94G

R1.03/94H

R1.03/94J

Water  chemistry  (sides  1  &  2)

R1.02/94A

Balduf

Safety  relevant  spare  parts

Safety valves

R1.02/94C

R1.02/94E

Equipment  for  fire  fighting

R1.02/94G

Bosch

Accumulator cells

R1.02/94X

VARTA

Reactor  control  system

Reliable  power  supply

Safety valves

Leak  detection  system

Equipment  for  diagnostic
system

R1.01/94A

R1.01/94B

R1.01/94C

R1.01/94D

R1.01/94F

Liquid  waste  removal  system

R1.01/94G

Incineration facility

Solidification facility

R4.03/94

R1.04/93D

Emergency  fire  alarm  system

R1.04/93F

Kalinin

Kalinin

Kalinin

Kalinin

Kalinin

Kalinin

Kalinin

Balakovo

Balakovo

Balakovo

Balakovo

Balakovo

Kola

Kola

Kola

Kola

Kola

Kola

Kola

Sosnovy  Bor

Sosnovy  Bor

—

—

—

—

—

—

—

—

—

—

—

—

—

—

23,13

16,68

—

0,18

0,50

0,75

0,65

0,70

0,70

—

0,50

1,00

—

—

2,00

0,50

2,00

1,00

1,00

1,50

0,20

3,00

0,50

8,50

8,50

4,99

0,04

0,28

0,25

2,95

5,05

5,05

0,31

0,06

0,04

2,99

1,65

0,96

1,48

1,24

1,24

0,32

—

—

—

—

—

—

0,46

—

—

0,03

0,44

—

—

—

—

—

—

—

—

—

C  35/36

EN

Official  Journal  of  the  European  Communities

9.2.1999

(million  ECU)

Description  of  the  projects  and
contracts  with  the  supply  agencies
concerned

Project

Contractor

Power  plant  involved

Budget
(contract  not
signed)

Contract
(contract  signed)

WW9508

01.01

96-5455

2

Automated  system  for
maintenance

R1.03/95A

Safety  panel  display  system

R1.03/95D

Not  allocated 
contract

to  a  specific

3

Completion  of  maintenance
project

Waste  treatment  systems

Upgrading  of  control  room
panels

R1.03/96C

R1.01/96C

R1.04/96A

Kalinin

Kalinin

Kalinin

Kola

Sosnovy  Bor

1,75

0,75

1,00

4,70

0,50

1,20

3,00

—

—

—

—

—

—

—

Total  for  the  operations  audited

38

Source:  Reports  from  the  supply  agencies  and  on-site  assitants.

23,13

14,79

9.2.1999

EN

Official  Journal  of  the  European  Communities

C  35/37

Stage  reached  in  implementing  TACIS  contracts  with  supply  agencies

Table 2.4

Implementation  by  the  Commission

Implementation  by  the  agency

Contracts

Payments

(million  ECU)

e
r
u
d
e
c
o
r
P

IC

RT

DA
DA

DA

RT

RT

t
c
a
r
t
n
o
C

Italtrend

94-1355

96-5455

97-0518
97-0586

97-0779

GTZ

97-0573

97-0577

Fichtner

94-0013 OT

94-1351

IC

Crown  Agent

94-0046 OT

94-1165

96-5449
Europa (1)

97-0585

97-0561

IC

RT

DA

IC

d
n
a

n
o
i
s
s
i

m
m
o
C

l
a
u
t
c
a
r
t
n
o
c

r
e
h
t
o

s
e
e
f

a

s
a

s
e
e
f

n
o
i
s
s
i

m
m
o
C

d
e
t
a
m

i
t
s
e

f
o
%

s
e
s
a
h
c
r
u
p

1,54

0,80

0,48

0,03
0,20

0,03

0,73

0,19

0,54

1,01

0,23

0,78

0,92

0,45

0,26

0,21

0,27

0,18

0,09

4,48

2,8

2,6

2,9

2,8

3,3
1,5

3,5

1,9

1,9

1,9

3,6

5,2

3,3

3,7

3,9

7,0

2,3

2,2

2,2

2,2

2,8

t
r
a
t
S

d
n
E

12.94

12.96

12.97
11.97

01.98

12.99

12.98

12.99
10.00

02.00

11.97

11.97

11.00

11.00

02.94

12.94

09.95

06.98

01.94

12.94

12.96

01.97

01.98

12.98

11.97

10.97

11.00

10.00

Grand  total

%

%

e
h
t

m
o
r
f

s
e
c
n
a
v
d
A

d
n
u
f

l
a
i
c
e
p
s

d
e
d
u
l
c
n
o
c

s
t
a
r
t
n
o
C

s
t
n
e
m
y
a
P

e
d
a
m

d
e
v
i
e
c
e
r

t
s
e
r
e
t
n
I

e
c
n
a
l
a
b

h
s
a
C

e
h
t

n
i

d
n
u
f

l
a
i
c
e
p
s

11,00

11,00

1,47

1,47

1,09

1,09

1,19

1,19

11,10

11,10

16,95

26,58

12,81

0,25

4,46

12,49

15,00

10,00

4,31

22,27

16,52

15,30

4,31

8,50

10,42

10,42

0,25

0,72

0,72

5,00

1,22

4,39

0,15

4,24

5,30

0,30

5,00

s
e
s
a
h
c
r
u
p

d
e
t
a
m

i
t
s
E

)
d
n
u
f

l
a
i
c
e
p
s
(

59,25

27,64

16,82

0,82
13,00

0,97

38,50

10,00

28,50

28,34

4,46

23,88

24,60

11,60

3,70

9,30

n
i

d
e
r
e
t
n
e

t
n
u
o
m
A

s
t
n
u
o
c
c
a

e
h
t

60,79

28,44

17,30

0,85
13,20

1,00

39,23

10,19

29,04

29,36

4,69

24,67

25,52

12,05

3,96

9,51

d
n
a

n
o

s
e
c
n
a
v
d
A

f
o

s
t
n
e
m
y
a
p

s
e
e
f

n
o
i
s
s
i

m
m
o
c

0,44

0,30

0,14

0,77

0,17

0,60

0,73

0,41

0,25

0,07

11,92

12,19

7,92

4,00

8,10

4,09

162,62

167,09

1,94

42,95

44,56

24,32

2,16

20,79

100

26

100

27

104

15

57

5

48

(1)  Subsidiary  of  Crown  Agents.
Source:  DG  IA’s  revenue  and  expenditure  account  (De´sire´e)  and  supply  agencies’  reports.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
C  35/38

EN

Official  Journal  of  the  European  Communities

9.2.1999

Table 2.5

Nuclear  authorities  and  power  plants  visited

Country

Russia

Ukraine

Bulgaria

Authorities

Gozatomnadzor  safety  authority  (GAN)
Ministry  for  Atomic  Energy  (Minatom)
The  operator  Rosenergoatom  (REA)
MOHT  (important  sub-contractor)

Ministry  of  the  Environment
Ministry  responsible  for  Chernobyl
Nuclear  Regulatory  Administration  (NRA)
The  operator  Goskomatom
Energoproekt  (Ukranian  Engineering  Institute)

Ministry  of  Energy  and  Energy  Resources  (MEER)
The  Operator  National  Electric  Company  (NEK)
Bulgarian  Nuclear  Safety  Authority  (BNSA)
Energoproekt  (Bulgarian  Engineering  Institute)

Lithuania

Safety  authority  (VATESI)
Ministry  of  Energy

Groupings  of  companies  and  internal  organisations

TPEG  in  Brussels  (Twinning  Programme  Engineering  Group)
Riskaudit  in  Paris
OECD/NEA  in  Paris  (Atomic  Energy  Agency)
WANO/PC  in  Paris  (World  Association  of  Nuclear  Operators,
Paris  Centre)
ISTC  in  Moscow  (Institute  for  Scientific  and  Technical
Cooperation)
AIEA  in  Vienna  (International  Atomic  Energy  Agency)

Power  plants

Sosnovy  Bor
Kola
Kalinin
Balakovo

Rovno
Zaporozhe

Kozloduy

Ignalina

9.2.1999

EN

Official  Journal  of  the  European  Communities

C  35/39

THE  COMMISSION’S  REPLY

GENERAL  REMARKS

The  draft  Special  Report  is  a  well-researched  document  that  makes  a  number  of  pertinent
criticisms. In many cases the Commission has already taken corrective measures. In other cases,
the  issues  highlighted  by  the  Court  will  be  addressed  in  the  Commission’s  proposals  for  a  new
Tacis  Regulation  and  for  the  updating  of  the  Financial  Regulation.  However,  in  a  number  of
cases  identified  below,  the  Commission  does  not  agree  with  the  Court’s  remarks.

The  Phare  and  Tacis  nuclear  safety  programmes  have  been  implemented  in  a  context,  that,  as
the  Court  acknowledges,  is  particularly  complex.  Therefore,  without  denying  the  need  to
improve  its  assistance,  the  Commission  takes  satisfaction  in  the  progress  that  it  has  achieved,
notably  in  developing  with  the  programme  partners  a  climate  of  trust  and  cooperation,  in
raising their awareness and know-how concerning nuclear safety issues, and in strengthening the
National  Nuclear  Regulatory  Authorities  of  the  partner  countries.  Safety  culture  is  no  longer
unknown  but  still  needs  further  strengthening.

Strategy

In the NIS there are at present 29 nuclear reactors in operation in Russia, 14 in Ukraine, one in
Armenia,  and  one  in  Kazakhstan.  In  the  central  and  eastern  European  countries  there  are  20
Soviet-designed  units:  six  in  Bulgaria,  four  in  Hungary,  four  in  the  Czech  Republic,  four  in
Slovakia, and two in Lithuania. Not all of these are of a type that can be upgraded to western
safety  levels.  The  cost  of  upgrading  those  reactors  that  are  deemed  to  be  upgradeable  is  high,
perhaps  ECU  100-200  million  per  unit,  and  dwarfs  the  Tacis  allocations  to  the  nuclear  safety
sector.

The  strategy  pursued  by  Commission  through  the  Nuclear  Safety  programmes  takes  this
situation into account. In particular, for those partner countries that are not candidates for EU
accession  the  Commission  seeks  to  support  and  accelerate  domestic  safety  upgrading
programmes,  principally  through  an  extensive  programme  of  on-site  assistance,  which  includes
equipment supplies but also aims at instilling a ‘safety culture’ among the programme partners,
and  through  the  promotion  of  independent  nuclear  regulatory  authorities.

The reasoning in the special report is flawed. The report claims that the objective of external aid
in  the  field  of  nuclear  safety  —  including  the  aid  given  by  the  Phare  and  Tacis  programmes  —
was  to  bring  the  stock  of  Soviet-designed  reactors  up  to  a  level  of  safety  in  line  with
international  standards.  However,  the  donors  have  never  accepted  this  responsibility  and  their
objective has always been confined to helping the recipients to meet their own responsibilities in
the  field.  Furthermore,  the  Commission  was  never  going  to  be  able  to  provide  the  ECU  50
billion  to  60  billion  required  to  close  down  or  modernise  the  65  nuclear  reactors  in  eastern
Europe  and  the  former  Soviet  Union  with  ‘donations’  of  around  ECU  100  million  a  year,
essentially  in  the  form  of  technical  assistance  (since  the  Phare  and  Tacis  rules  strictly  limit
investment  funding).

This  is  not  to  say,  however,  that  the  Commission  does  not  endeavour  to  improve  its  strategic
approach or to adapt it in the light of political developments. In Agenda 2000, for example, the
Commission  clearly  defined  its  approach  to  nuclear  safety  in  the  context  of  EU  enlargement.

Where  the  safety  of  Soviet-designed  nuclear  power  stations,  which  are  in  operation  or  under
construction,  can  be  upgraded  to  meet 
international  safety  standards,  modernisation
programmes  should  be  fully  implemented  over  a  period  of  seven  to  ten  years.  (This  applies  to
Dukovany and Temelin in the Czech Republic, Paks in Hungary, and certain units at Bohunice

C  35/40

EN

Official  Journal  of  the  European  Communities

9.2.1999

and  Mochovce  in  Slovakia  and  at  Kozloduy  in  Bulgaria.)  The  timetables  agreed  by  the
governments  concerned,  subject  to  certain  conditions,  for  the  closure  of  non-upgradeable  units
must be respected. (This applies to Bohunice in Slovakia, Ignalina in Lithuania and certain units
at  Kozloduy  in  Bulgaria.) (1)

New orientations for the Phare and Tacis programmes are also outlined in the Communication
from  the  Commission  to  the  Council  and  the  European  Parliament  on  nuclear  sector  related
activities  for  the  applicant  countries  of  central  and  eastern  Europe  and  the  new  independent
States.

Finally, a panel of high level advisers was established at the beginning of 1998 to make further
recommendations regarding the Commission’s activities in this sector. Its report, Nuclear Safety
in  Central  and  Eastern  Europe  and  in  the  New  Independent  States,  A  Strategic  View  for  the
Future of the European Union’s Phare and Tacis Programmes, has recently been published. The
Commission will examine the recommendations and assess to what extent they can be included
in  its  future  activities  in  this  field.

Programming

The Commission accepts that there have been shortcomings in the manner in which its strategy
has been translated into concrete projects. These shortcomings in the programming process can
be  attributed  largely  to  the  urgency  with  which  the  initial  programmes  were  launched,  the
differences  of  perception  between  eastern  and  western  experts,  and  the  inadequate  staff
resources  that  were  allocated  for  the  implementation  of  the  programmes  (point  2.4).  This  has
led  the  Commission  to  rely  extensively  on  external  consultants  to  draw  up  the  nuclear  safety
programmes  and  their  component  projects.

However, the Commission fully agrees with the Court in that there is a need for more suitable
arrangements. Therefore the Commission undertook to circumscribe the role of consultants such
as  the  Twinning  Programme  Engineering  Group,  and  Directorate-General  IA  has  established  a
Framework  Agreement  with  the  Joint  Research  Centre  in  order  to  avail  itself  in-house  of  the
requisite technical support. Nevertheless, it is clear that the Joint Research Centre cannot cover
all  the  needs  for  nuclear  expertise  that  arise  in  the  course  of  implementation  of  the
programme.

Implementation

The  Commission  acknowledges  that  the  programmes  have  suffered  from  delays  and
management  deficiencies,  and  it  has  adopted  a  number  of  measures  to  redress  this  state  of
affairs:

—  reduction  of  the  number  of  projects  selected  for  financing,

—  cancellation  of  projects  whose  launch  is  unduly  delayed,

—  commitment  of  funds  only  once  projects  have  been  sufficiently  developed  to  permit  a  rapid

launch  after  the  financing  decision,

—  establishment  of  better  lines  of  communication  with  the  beneficiaries,  for  example  through

the  Moscow-based  Joint  Management  Unit.

It  should  be  noted  that,  given  the  typical  duration  of  the  project  cycle,  it  will  take  some  years
before  the  full  benefit  of  these  measures  is  reaped.  The  high  rate  of  staff  turnover  in  the
Commission  departments  concerned  remains  worrying.

Finally,  the  Commission  acknowledges  that  its  general  procedures  are  not  always  well  adapted
to  the  specific  constraints  of  the  nuclear  safety  programmes,  and  that  they  have  contributed  to
delays  in  their  implementation.  However,  it  would  stress  that  these  procedures  have,  in  some
cases,  been  imposed  on  the  Commission  by  the  Council.

(1)  Agenda  2000,  Chapter  6,  p.  53.

9.2.1999

EN

Official  Journal  of  the  European  Communities

C  35/41

1.  INTRODUCTION

Phare  and  Tacis  nuclear  safety  programmes

In  the  context  summarised  by  the  Court,  the
1.1.  -  1.2.
European  Commission  was  mandated  by  the  Council  to
take  action  to  improve  nuclear  safety  both  for  the
countries  of  central  and  eastern  Europe  and  for  the
former  Soviet  Union.  This  mandate  was  a  real  challenge
because  the  constraints  in  this  sector  were  much  greater
than for all the other activities financed by the Phare and
Tacis  programmes.  There  are  four  such  constraints:

1.  The  technical  constraint  was  greater  than  for  any
other  activity,  not  only  because  of  the  very  complex
scientific and technical content of this sector, but also
because  of  the  restricted  information  available  in
Europe at the start of the 1990s on the Soviet nuclear
sector, which was very secretive and closely linked to
the military.

In order to overcome this constraint, the Commission
turned  to  operators  in  this  sector  in  Europe  (power
station  operators,  industrialists,  safety  authorities)  to
acquire  the  necessary  knowledge  and  attempt  to
define  a  strategy.  This  collaboration  has  reached  a
level  of  dependency  that  is  criticised  by  the  Court.

2.  The  political  constraint  was  also  greater  than  for
other 
sectors.  The  principle  of  demand-driven
programmes  adopted  by  the  Council  regulations  for
both  Phare  and  Tacis  was  much  more  binding  in  the
nuclear  sector  for  two  reasons.  This  sector 
is
dominated  by  very  powerful  bodies,  sometimes  by
virtual  states  within  a  state,  or  by  power  station
directors  who  have  a  very  great  influence  on  whole
regions  because  of  a  lack  of  any  alternative  energy
sources  (as  was  the  case  at  Chernobyl).  As  a  rule,
these  powers  refuse  any  debate  on  their  strategy  and
reject 
as
‘exaggerated’.

conception  of 

the  western 

safety 

While  the  Commission  has  gradually  overcome  this
constraint  in  applicant  countries  such  as  Bulgaria  or
Lithuania,  bringing  pressure  to  bear  within  the
a
context  of 
pre-accession  strategy,  the  situation  remains  more
difficult 
its  own
conditions for potential cooperation in a sector which
generally  does  not  recognise  the  need  for  it.

in  Russia,  which 

enlargement  by 

implementing 

imposing 

is 

3.  The financial constraint was also more sensitive in the
sense  that  improving  the  safety  of  a  nuclear  stock
made  up  of  around  fifty  power  stations  required
budgets  out  of  all  proportion  with  the  Phare  and
Tacis programme funds. This constraint is particularly
tough  and  prevents  the  Commission  from  applying
any  real  leverage  to  the  process  of  solving  the
problems,  in  particular  by  closing  power  stations.

4.  The legal constraint was also greater in the sense that
the  Phare  and  Tacis  regulations  imposed  the  same
rules for invitations to tender in the  nuclear sector as
in 
somewhat
inappropriate  in  view  of  how  few,  and  what  type,  of
operators  were 
the
Commission  was  thus  asked  to  make  the  Member
States’  safety  authorities  compete  with  each  other.

sectors,  which  was 

the  other 

competent 

field: 

this 

in 

The  Commission  has  overcome  this  constraint  by  a
broad  use  of  the  derogations  permitted  by  the
Financial  Regulation  for  concluding  contracts  by
private  treaty;  the  Court  criticises  the  scale  of  this
practice.

2.  SUMMARY  OF  THE  OBSERVATIONS

The  European  Union’s  approach

2.1. The  strategy  which  has  been  the  basis  for  defining
the  Commission’s  programmes  was  first  that  adopted  by
the  G7  in  1992  at  the  Munich  Summit.  The  action
programme  adopted  by  the  G7  was  based  on  the
following  measures:

—  improvements  in  operational  safety,

—  technical  improvements  based  on  safety  assessments,

—  strengthening  the  safety  authorities.

This action plan also had a longer-term goal of replacing
the  least  safe  reactors  and  improving  those  of  more
recent  design.

The  Commission’s  strategy  was  reiterated  in  the  initial
the  countries  concerned,
funding  agreements  with 
formulated  more  explicitly  in  1995  and  adopted  by  the
management  committee  in  1996.  The  main  thrust  of  this
strategy for the applicant countries was clearly defined in
Agenda  2000.

As  regards  decommissioning,  dismantling  and  waste
processing, these were not secondary objectives but rather
objectives which have thus far not received the same level
of  funding  as  the  safety  of  working  reactors.

The  report  also  stresses  how  difficult  it  is  for  the
countries  concerned  to  envisage  closing  their  nuclear
reactors.

However,  it  should  be  stressed  that:

—  on  the  one  hand,  it  is  the  Tacis  programme  which
prepared the plan for decommissioning the Chernobyl
nuclear  reactors,  and  it  was  almost  entirely  Tacis
funds which financed the investigation of the case for

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the  completion  of 

funding 
Khmelnitsky  2 
Chernobyl  to  be  definitively  closed,

reactors,  which 

the  Rovno  4  and
should  allow

—  on  the  other  hand,  a  clear  strategy  was  set  out  in
Agenda  2000  to  lead  to  the  least  safe  reactors  in  the
applicant  countries  being  closed.

The  fact  noted  by  the  Court,  that  the  financial
instruments  which  could  take  over  from  Phare  and  Tacis
for  the  costliest  projects  are  taking  a  long  time  to  be
mobilised,  shows  the  technical,  economic  and  financial
complexity  of  projects  in  the  nuclear  sector.

2.2. When setting up G-24 NUSAC, the mechanism was
primarily  a  focus  point  for 
information  exchange,
enabling  the  various  actors  to  coordinate  amongst
themselves.  The  participating  parties  never  considered
giving  NUSAC  a  mandate  to  direct  funds.

Finally,  it  needs  to  be  stated  that  G-24  NUSAC  enjoys
excellent relations with the IAEA and EBRD, with which
there  is  frequent  contact.

Cooperation with the NSA to buy certain equipment was
difficult  because  of  the  different  procedures  that  exist,
particularly  as  regards  the  firms  that  are  eligible  to  take
part  in  the  invitations  to  tender.

2.3. Relations  with  the  beneficiaries  in  the  partner
countries  have  been  governed  by  rules  which  normally
apply  to  the  beneficiaries  of  the  Tacis  programme.  They
have  been  associated  with  all  the  programming  and
evaluations  received  in  connection  with  invitations  to
tender.

the 

complain 

recipients 

sometimes 

While 
of
communication  problems,  this  can  be  because  they
challenge  the  results  of  the  evaluations  of  the  invitations
to  tender.  The  recipients  normally  participate  in  the
evaluations.  In  some  cases  the  recipient  may  not  have
been  asked  to  travel  for  the  evaluation  of  the  price  bids,
since this evaluation was confined to choosing the lowest
bid.

Management  of  the  operations

2.4. The  Commission  notes  that  its  replies  show  that
while  there  has  occasionally  been  a  lack  of  rigour  (often
due  to  constraints  on  human  resources,  which  are  too
variable and too limited for the large number of projects)
this  is  certainly  not  the  case  across  the  board.  More
efficient  management  tools  were  put  in  place  after  the
start  of  the  programme.

2.5. The  complex  and  specific  nature  of  the  field  of
action, nuclear safety, meant that private treaty contracts
were  used  more  than  in  other  fields.

Derogations  from  the  competitive  bidding  procedures
mainly  concerned  projects  to  assist  the  safety  authorities
and  the  contracts  with  the  Union  electricians  for  on-site
assistance.

2.6.
It was decided to interpose supply agencies in order
to  increase  the  transparency  of  the  process  of  purchasing
equipment,  to  balance  out  the  very  great  involvement  of
the  Union’s  electricians.

As  regards  advances,  the  Commission  would  draw
attention  to  the  fact  that  it  must  choose  between  a  few
large advances (which are covered by bank guarantee) or
many  small  advances.  In  the  light  of  the  staff  constraints
highlighted  by  the  Court,  the  second  choice  is  not  really
an  option  for  the  Commission  departments.

2.7. The  shortcomings  in  the  programming  process  can
be attributed largely to the urgency with which the initial
programmes  were  launched  and  the  inadequate  staff
resources  that  were  allocated  for  the  implementation  of
the  programmes  (paragraph  2.4).  This  has  led  the
Commission  to  involve  external  consultants  to  draw  up
the  nuclear  safety  programmes  and  their  component
projects. However, the Commission has meanwhile put in
place more suitable arrangements. The role of consultants
such  as  the  Twinning  Programme  Engineering  Group
(TPEG) 
and
carefully 
Directorate-General  IA  has  established  a  Framework
Agreement  with  the  Joint  Research  Centre  in  order  to
avail  itself  in-house  of  the  requisite  technical  support.

circumscribed 

been 

has 

The  fact  remains  that  the  nuclear  sector  is  so  complex
that the Commission, and in particular its Joint Research
Centre,  cannot  claim  to  have  sufficient  resources  to  meet
all  its  needs  in  programming  and  drawing  up  terms  of
reference.

Finally,  it  should  be  noted  that  the  use  of  consortia  is
also  linked  to  the  limited  number  of  players  in  the
nuclear  sector.

2.8. The  levels  set  by  the  budgetary  authority  have  not
been  exceeded.  The  management  expenditure  mentioned
by  the  Court  as  excessive  expenditure  does  not  come
under  the  ceiling  entered  in  the  budget  remarks.

Mobilisation  of  aid  and  the  results

2.9. The  Commission  does  not  deny 
the
implementation  of  some  actions  has  been  slow.  The
choice  of  implementing  arrangements  has  been  dictated
above all by a concern for transparency and control. It is
for  this  reason  above  all  that  supply  agencies  have  been
selected  for  equipment  purchasing  projects.

that 

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As regards the priority given to supplying equipment, the
point  should  be  made  that  there  is  no  contradiction
between  supplying  equipment  and  the  development  of  a
safety  culture.  Equipment  supply  projects  must  largely
serve  to  implement  appropriate  procedures,  reflecting  an
acceptable  safety  culture.

It  is  this  same  approach  which  led  the  Commission  to
spread  the  budgets  across  many  power  stations.

2.10. As  the  requirements  in  any  case  exceeded  the
available resources, the choice of the best projects had to
be based on several criteria. For these projects, the active
participation  of  the  partners  could  be  considered  as  a
positive  sign  for  its  implementation.

Changes  had  to  be  made  following  problems  such  as:
excessive  delays  in  preparing  the  specifications  (Nikiet
technical  centre),  underestimation  of  budgets,  stricter
criteria imposed late by the safety authorities, a change of
direction  by  the  authorities  in  the  recipient  country
(abandonment  of  an  investment  project  with  a  Euratom
loan  at  the  Kola  power  station  at  the  end  of  the
preparatory  phase  financed  by  Tacis).

from  them.  For  some  of  these  projects,  the  results  have
also  been  used  in  subsequent  related  projects.  The  terms
between  contractors  and  sub-contractors  are  not  the
direct  responsibility  of  the  Commission.

2.13. The  contracts  are  correctly  accounted  for  and  not
overestimated.  However,  the  amounts  entered  in  the
accounts  for  supply  contracts  should  not  be  used  as  an
indicator  of  progress  on  purchases.

For  Chernobyl,  the  low  rate  of  mobilisation  can  be
explained  above  all  by  the  link  established  between  the
in  1994)  and  the  political
Tacis  projects  (decided 
negotiation  between  the  G7  and  the  EBRD  with  Ukraine
for  the  MoU  and  the  NSA  agreement  which  were
completed  only  in  1995  and  1996  respectively.  Before
then,  it  would  not  have  been  appropriate  to  unilaterally
start  implementing  projects  on  decommissioning  the
power  station.

3.  THE  EUROPEAN  UNION’S  APPROACH

Objectives  and  resources

2.11.
In certain cases, the Commission received a formal
declaration from the recipients that they had obtained the
agreement  of  the  safety  authorities  for  the  necessary
licences. It subsequently transpired that this had not been
the  case.

3.2. The  strategy  which  has  been  the  basis  for  defining
the  Commission’s  programmes  was  first  that  adopted  by
the  G7  in  1992  at  the  Munich  Summit.  The  action
programme  adopted  by  the  G7  was  based  on  the
following  measures:

The Court’s comments in paragraph 2.3 on relations with
the  recipients  should  be  read  in  this  light.

—  technical  improvements  based  on  safety  assessments,

—  improvements  in  operational  safety,

2.12. Because  of  the  lack  of  appropriate  cover  for  the
EU’s  contractors  in  the  event  of  a  nuclear  accident,  the
results  of 
the
contracts 
Memorandum  of  Understanding  (MoU)  was  signed  in
1995  could  not  be  made  freely  available  to  the
recipients.

signed  before 

certain 

Under  the  MoU  protection  is  provided  by  the  Russian
Federation, thereby obviating the need for this restriction
for  the  contracts  signed  subsequently.

An interim solution has been found for the contracts that
were concluded before the Memorandum was signed, and
the  results  of  the  projects  in  question  have  been  made
formally  available  to  the  recipients.

—  strengthening  the  safety  authorities.

This  action  plan  also  had  the  longer-term  goal  of
replacing the least safe reactors and improving those of a
more  recent  design.

Reference  to  this  strategy  was  clearly  made  in  the
proposals  and  agreements  on 
first
programmes  adopted  (nuclear  safety  programmes  for  the
Russian  Federation  and  Ukraine  1992  —  93).

funding 

the 

strategy  was  more 

The  Commission’s 
explicitly
formulated  in  1995  and  adopted  by  the  management
committee  in  1996.  The  main  priorities  of  this  strategy
have been pursued since the beginning of the programme.
Finally, the strategy for the central and eastern European
countries  was  clearly  defined  in  Agenda  2000.

It  should  also  be  noted  that,  from  the  start,  the  Russian
institutes  have  closely  collaborated  in  drawing  up  the
studies  concerned  and  have  therefore  gained  direct  use

It  should  be  borne  in  mind  that  the  characteristics  and
technical deficiencies of the Soviet-designed reactors were
relatively  unknown  at  the  beginning  of  the  programmes.
It  was  therefore  necessary  to  address  the  problem  by

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conducting  studies.  These  also  made  it  possible  to
establish  links  between  European  industrialists  and  their
counterparts,  particularly  in  Russia.  Subsequently,  more
concrete  action  was  taken.  It  was  backed  up  by  two
additional  elements:  support  for  the  regulators  (safety
authorities)  and 
station
operators.

the  power 

support 

for 

It  is  therefore  not  true  to  say  that  the  programmes
between  1990  and  1994  were  decided  upon  without  an
overall strategy.

3.3. The  Commission  placed  the  question  of  closing  the
least  safe  reactors  within  the  more  general  framework  of
the  G7  and  the  Nuclear  Safety  Account  (NSA),  judging
that  only  concerted  action  by  all  the  donor  countries
could lead to a positive result. Under the NSA there does
indeed  exist  an  agreement  with  Lithuania,  Bulgaria  and
Russia.  The  case  of  Ukraine  is  covered  by  the  G7  MoU.

3.4. All  the  strategy  documents  which  were  used  for
programming  clearly  indicate  that  the  Commission’s
action may not contribute to extending the lifespan of the
reactors  planned  for  closure  in  the  short  term.  This  is
looked  at  when  the  annual  programmes  are  assessed.

Decommissioning  and  dismantling  of  reactors

3.5.  to  3.7. The  Commission  has  always  considered
decommissioning  the  least  safe  power  stations  as  a
paramount political objective. This is clearly confirmed in
Agenda  2000,  and  is  demonstrated  by  the  Commission’s
actions  in  Ukraine  and  in  the  context  of  the  accession
partnerships and its support, both technical and political,
for  the  NSA’s  and  the  G7’s  efforts.

It  should  also  be  noted  that,  when  the  context  allowed,
the  necessary  resources  were  allocated  to  deal  with  this
question.  The  Tacis 
the
decommissioning  plan  for  the  Chernobyl  power  station.
Invitations  to  tender  for  the  construction  of  three  waste
processing  plants 
the
for  waste 
decommissioning  of  Chernobyl,  to  be  financed  by  the
Tacis  programme  (ECU  40  million),  are  in  preparation.

programme 

prepared 

resulting 

from 

The  multilateral  account  set  up  in  1997  with  the  EBRD
does  not  affect  the  decommissioning  of  the  Chernobyl
reactors  but  the  sarcophagus  surrounding  Unit  4,  where
the  1986  accident  took  place.

As  regards  the  closure  of  Chernobyl  it  is  important  to
stress  the  link  with  completion  of  two  new  reactors.

The  difficulties  encountered  in  mobilising  appropriations
for  this  action  do  not  come  from  the  Commission,  but
from  other  institutions,  particularly  the  EBRD.

Supply  of  equipment

3.8. Given  the  very  considerable  amounts  required  to
modernise the reactors in relation to the limited resources
which  the  Commission  has  at  its  disposal,  it  considers
that  the  first  purpose  in  supplying  equipment  is  to
transfer the safety culture, basing it on practical examples
which  involve  the  recipients  directly,  rather  than  on
studies  alone.  In  view  of  the  state  of  the  power  stations
concerned  and  the  perceived  needs,  it  would  have  been
impossible  to  ensure  that  the  recipients  cooperated  if  the
Commission  had  arrived  empty-handed.

It  should  also  be  mentioned  that  it  has  been  possible  to
deal with urgent problems, particularly in Ukraine, where
significant quantities of spare parts have been supplied to
the  nuclear  power  stations  at  Rovno,  southern  Ukraine
and  Zaporozhe.

The  supply  of  equipment  was  also  a  response  to  a
repeated  criticism  that  the  programmes  contained  too
many studies with no real impact on the safety of power
stations.  The  actions  that  have  already  been  concluded
have  brought  real  improvements  to  the  power  stations
concerned.  For  example,  the  supply  of  non-destructive
control  equipment  (Balakovo,  Smolensk),  treatment  of
water  chemistry 
fire
prevention  (Zaporozhe)  or  computerised  maintenance
systems  (Beloyarsk,  Smolensk).

(Kalinin),  welding 

(Kalinin), 

In  this  context,  it  should  be  stressed  that  there  is  still  a
need  for  studies  in  all  circumstances.  The  Commission
has  tried  to  find  a  better  balance  between  studies  and
equipment.

Lastly,  the  investigation  of  the  case  for  financing  the
Rovno 4 and Khmelnitsky 2 reactors which would enable
Chernobyl  to  be  definitively  closed  down  was  financed
almost  entirely  out  of  Tacis  funds.  Furthermore,  the
abovementioned  projects  have  been  scrutinised  in  detail
by  various  international  bodies,  and  the  quality  of  the
results  has  never  been  called  into  question.

3.9. The  Commission  had  proposed  cooperation  as  one
of the (secondary) objectives of its strategy. This objective
is  not  unanimously  supported  by  the  Member  States.
Some  of  them  consider  that  this  must  be  left  to  the
industrial players.

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Furthermore,  a  proactive  policy  in  this  field  in  many
cases  requires  derogations  from  the  rules  on  competitive
tendering,  in  view  of  the  existing  industrial  relations.

programme has undertaken to provide this service for the
plants  financed  by  the  NSA  too.

This question should be addressed in depth when the new
regulation  is  being  drawn  up.

Cooperation  with  the  other  partners

Non-industrial  aspects  of  operational  safety

3.10. The  inadequate  definition  of  on-site  assistance
tasks  is  partly  due  to  the  very  nature  of  these  activities,
which  must  meet  more  short-term  demands,  but  is  also
partly  a  direct  consequence  of  the  lack  of  Commission
staff.

Multilateral  coordination

Coordination  of  G-24  (NUSAC)  assistance

3.12. The  NUSAC  had  no  decision-making  power;  its
role  was  one  of  information  exchange.

Cooperation  with 
equipment

the  EBRD 

(NSA) 

in  supplying

3.13. Discussions  have 
the
Commission  and  the  EBRD  in  order  to  put  together  a
common  project  for  the  delivery  and  installation  of  the
safety  relief  valves  for  the  Steam  Generator  main  lines.

taken  place  between 

The criteria for eligibility of potential suppliers and origin
of goods, the requirements for the tender implementation
process  and  the  evaluation  of  the  received  tenders  were
compared.  Regrettably,  it  became  clear  that  it  was
impossible  to  reconcile  the  differences  without  creating
undue  delays.

3.16. The  Commission  actively  participates  in  IAEA
meetings  and  presents 
there.  The
categorisation  of  the  failings  of  Soviet-designed  reactors
drawn  up  by  the  IAEA 
in  the
programming  (choice  of  projects).

is  therefore  used 

its  programmes 

3.18. The  on-site  assistance  arrangements  implemented
by  the  Commission  has  drawn  upon  the  programme  of
the  World  Association  of  Nuclear  Operators  (WANO).
The  same  actors  are  broadly  involved.

3.19. The  Court’s  observation  that  payments  to  ISTC
were  blocked  in  1997  is  correct.  This  was  due  to  a  lack
of  a  legal  base  at  that  time.  The  payments  were
suspended pending the signature of the Bilateral Financial
Agreements  between  DG  IA  and  the  ISTC.  These
agreements were signed, with a delay attributable to staff
rotation,  on  15  September  1997  and  since  then  there
have  been  no  delays  in  payments  to  the  ISTC.

3.20. The  Tacis  programme  concentrates  on  the  most
serious  safety  issues,  and  for  these  the  scientific  basis  of
the solutions has already been worked out for some time.
Thus the activities financed under ISTC are generally too
far  upstream  in  the  R&  D  cycle  to  have  a  direct  impact
on  the  Tacis  programme.  The  Commission’s  strategy  in
research  on  safety  was  defined  in  the  EU’s  specific
framework  programme  and  under  Tacis,  and  research
projects have been very limited in number and voluntarily
separated  from  the  ISTC.

It 

3.14.
specify 
conventional  framework  for  the  supply  programme.

that  Tacis 

should 

true 

is 

4.  MANAGEMENT  OF  THE  OPERATIONS

the

Invitations  to  tender

However,  as  regards  the  aspect  of  the  Nuclear  Safety
Account  (NSA)  agreements  on  the  conditions  for  the
future  cessation  of  certain  reactors,  it  must  be  conceded
that the success of these agreements is far from clear: the
NSA  money  is  being  spent  without  the  conventional
consideration  being  obtained.  This  demonstrates  the
difficulty  in  imposing  a  strong  conditionality  on  the
subsidies  given  by  the  technical  assistance  programmes.

example  of 

3.15. An 
cooperation
recommended  by  the  Court  concerns  the  granting  of
licences  for  dismantling  plants  in  Chernobyl.  The  Tacis

type  of 

the 

4.1.  and  4.2. Given  the  specific  nature  of  the  nuclear
safety  projects,  the  operational  services  and  the  financial
controller  have  specified  the  framework  in  which  the
conclusion  of  contracts  by  private  treaty,  authorised  by
the  Financial  Regulation,  could  operate.  Recourse  to
exceptional  procedures 
the
exceptional  nature  of  the  field  of  intervention.

justified  by 

is  entirely 

The  same  goes 
the
Commission wanted both to call only on the operators of
the  Union’s  nuclear  power  stations  and  also  to  cover  a

for  on-site  assistance  where 

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9.2.1999

large number of sites in the recipient countries. It was not
possible  to  organise  an  invitation  to  tender  and  act
within  both  of  these  constraints.

instruments necessary to guarantee that this responsibility
is discharged.

on 

the 

depend 

improvements 

Many 
technical
characteristics  of  the  technology  in  place  and  can  be
identified  only  by  a  single  contractor  familiar  with  the
technology  or  producing 
that  equipment.  National
regulatory  authorities  have,  for  the  sake  of  effectiveness,
pooled  their  knowledge  in  one  forum,  with  which  a
direct  agreement 
form
available.

the  sole  contract 

then 

is 

Use of a direct agreement has not led to a lack of rigour,
particularly  as  regards  the  fees.  In  the  mutually  agreed
contracts,  the  Commission  has  chosen  fees  in  line  with
the fees determined in invitations to tender from the same
time,  for  experts  of  the  same  standing  and  in  similar
working  conditions.

In  spite  of  repeated  requests  for  adjustment,  these  initial
rates  have  not  been  revised  upwards,  as  the  Commission
has  argued  that  the  working  conditions,  having  been
improved  in  the  meantime,  compensate  for  rises  in  the
cost  of  living  for  which  the  standard  contracts  normally
provide  for  an  adjustment.

Supply  agencies

Appraisal  of  supply  projects

4.3. Without  the  introduction  of  a  procurement  agent,
the  EU  utilities  participating  in  the  On-Site  Assistance
(OSA)  programme  would  have  responsibility  for  all
stages  of  the  project  cycle:  project  definition,  drafting  of
technical 
tendering,  contracting  and
implementation.  In  the  Commission’s  view,  this  would
not  be  conducive  to  transparency  and  would  not  allow
public  expenditure  to  be  correctly  monitored.

specifications, 

4.4. While  it  is  true  that  in  1996  the  Commission
published  a  more  detailed  version  of  the  procedure
applicable  to  purchases  of  equipment,  the  main  elements
of  the  procedure  were  established  and  brought  to  the
attention  of  those  concerned  right  from  the  start  of  this
programme.

throughout 

the  purchase
The  recipients  participate 
procedure,  for  example 
in  the  preparation  of  the
specifications and the technical evaluation of the bids, the
signature of the supply contract and the (provisional and
final)  acceptance  of 
the
the 
Commission  makes  the  recipients  responsible  only  for  a
limited  number  of  stages  in  the  procedure,  this  is  partly
due  to  the  fact  that  it  does  not  have  the  contractual

equipment.  While 

It  should  be  noted  that  the  procedure  for  evaluating
tenders is divided into two parts: the financial evaluation
is carried out only after the Commission has accepted the
report  on  the  technical  evaluation,  with  the  aim  of
ensuring  the  quality  and  objectivity  of  the  technical
evaluation before opening the price bids. It has happened
that  the  recipients  have  not  taken  part  in  the  financial
evaluations,  whenever  it  was  the  lowest  bid  that  had  to
be  selected,  so  as  to  avoid  travel  and  additional  costs.

The  entry  in  the  accounts  and  the  reality  of  the
operations

4.5.  and  4.6. Contracts  concluded  with  supply  agencies
include  the  budget  itself  provided  for  purchases  and  the
fees  and  costs  for  the  agency.  The  full  amount  of  these
contracts  must,  of  course,  be  entered  in  the  accounts.
Clearly,  the  purchases  by  the  supply  agencies  are  made
some  time  after  the  conclusion  of  the  parent  contract,
hence  the  divergences  mentioned  by  the  Court.

Without  questioning  the  issues  raised  by  the  Court,  it
should  be  emphasised  that  payments  are  made 
in
accordance with the established contracts. Nonetheless, in
view  of  the  Court’s  remarks,  the  Commission  services
have  decided  to  review  the  financial  structure  of
contracts.

The internal database De´sire´e, to which the Court refers,
the  Commission’s  accounting  system.  The
is  not 
accounting  system  of  the  Commission  is  Sincom,  where
all  commitments  and  payments  are  properly  registered.

4.7. The advance payments made by the Commission in
accordance  with  the  established  contracts  are  properly
registered.  (See  also  paragraph  4.6.)

4.8. The  information  mentioned  by  the  Court  is  indeed
is  required  by  the
information  additional  to  what 
accounting 
this
receives 
system.  The  Commission 
management  information  via  the  procurement  agents’
regular  reports.  (See  also  paragraph  4.6.)

4.9.
In  accordance  with  the  established  contracts,  the
interest  accruing  on  the  amounts  under  the  special  funds
has  only  to  be  credited  by  the  contractor  or  the
guarantor  to  the  Commission  at  the  end  of  the  contract.
(See  also  paragraph  4.6.)

4.10. The  Commission  is  making  efforts,  particularly  in
the  Phare  and  Tacis  annual  reports,  to  give  as  much
additional  information  as  possible  to  the  accounting
reports,  increasing  the  transparency  of  the  operations.

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Contractual  procedures

4.11. The contracts with the supply agencies are service
contracts  for  which  the  ‘restricted  invitation  to  tender’  is
the  standard  procedure  laid  down  in  the  Financial
Regulation.

As  regards  the  eight  contracts  (amendments)  concluded
by  negotiation:

—  the  clear  advantage  of  maintaining  continuity  of  the
services  must  be  highlighted  (cf.  Article  118  of  the
Financial Regulation),

—  for  several  of  these  contracts  the  fees  are  below  the

ceiling  for  the  award  of  negotiated  contracts.

some  time  for  all  the  necessary  consultations  and  to  find
a  solution  —  which  often  is  the  responsibility  of  the
partner  state  authorities.

4.15. The  Commission  acknowledges  that  such  an
adjournment  happened  in  certain  cases  in  the  past.
However,  this  is  no  longer  the  case.

On-the-spot  monitoring  of  programmes

It  should  be  noted  that  the  Joint
4.17.  and  4.18.
Management Unit (JMU) has been established to help the
Russian  authorities  coordinate  their  participation  in  the
nuclear  safety  programmes,  particularly  in  drawing  up
these  programmes,  and  to  act  as  a  clearing  house  for
information.

The  Commission’s  monitoring  of  the  operations

Cost  of  management

4.13. De´sire´e  is  an  internal  database,  providing  a  tool
for contractual and financial management of projects. As
such, certain aspects of the De´sire´e database could indeed
be  improved.

formal  work  methodology  exists  and 

4.14. A 
is
described in several documents, such as the guidelines for
task  managers  and  the  handbook  on  project  cycle
management.  Training  on  management  rules  is  provided
regularly  to  task  managers  at  the  Commission  and
Delegations.  Tools  for  the  follow-up  and  management  of
projects  also  exist,  for  example:

—  the  monitoring 

provides
fundamental  information  to  the  management  during
the  life  of  the  project,

programme  which 

—  the  Tableau  de  Bord,  which  is  a  project  forecast

tool,

—  De´sire´e,  which  gives  detailed  information  of  the

financial  life  of  contracts  and  programmes,

—  monthly  reports  from  the  procurement  agents,

—  a  database  on  projects  in  progress  maintained  by  the

Joint  Management  Unit  (Moscow),

in 

the 

allowed 

operating, 

the  preparation, 

4.19.  and  4.20. The  Commission  does  not  agree  with
the  Court’s  statements.  The  respective  legal  bases  have
always 
preparation,
implementation  and  other  costs  to  be  financed,  without
which  it  would  not  be  possible  to  involve  the  partner
country 
implementation  and
monitoring  of  the  programme.  The  budget  remark
introduced  in  1996  limited  a  clearly  defined  part  of  this
assistance to a ceiling which the Commission has adhered
to  completely.  The  administrative  expenditure  incurred
by the contractors — under service, equipment or supply
contracts — in managing the activity for which they were
contracted  is  an  integral  part  of  the  programme  and
constitutes  eligible  expenditure.  The  Court’s  statement
that  the  expenditure  entered  in  the  accounts  exceeds  the
limits  set  by  the  budgetary  authority  is  incorrect  and  the
result  of  a  unilateral  interpretation  of  the  budgetary
remark 
in  question.  The  Commission  has  already
answered  this  criticism  by  the  Court  on  many  occasions,
taking  the  same  position;  the  Court’s  criticism  is  in  no
way  specific  to  the  nuclear  safety  programme  but  is  a
general  criticism  applied 
the  Phare  and  Tacis
programmes  in  their  entirety.

to 

5.  MOBILISATION  OF  AID  AND  THE  RESULTS

—  notes  on  projects  and  programme  issues  produced  by

the  EC  Delegations.

Planning

Starting  up  of  monitoring  activity  of  nuclear  safety
projects took more time than for other Tacis projects due
to  the  complexity  and  confidentiality  of  this  particular
area.

It  was  appropriate  to  start  the  programmes  with  a
5.1.
number  of  general  studies  before  undertaking  more
concrete,  detailed  actions.

The  Court  notes  that  problems  raised  by  monitors’
reports  on  nuclear  safety  projects  are  not  always  quickly
solved  by  the  Commission.  The  complexity  and  the
number  of  actors  in  this  kind  of  project  often  require

The position of certain recipient countries, which did not
fully  share  the  Commission’s  concerns  as  regards  the
safety of their nuclear plants and for which the supply of
equipment  was  the  only  need,  must  certainly  be  seen  in
relative  terms.

C  35/48

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regards 

the  origin  of  on-site  assistance, 

As 
the
Commission  has  drawn  the  management  committee’s
attention  to  the  necessarily  general  character  of  the
proposals  contained  in  its  initial  proposal.  The  group  of
experts  and  the  management  committee  for  the  Tacis
programme have, however, been informed of the progress
of  the  programmes.

The  Commission  has  redoubled  its  efforts  to  improve
communication  with  the  recipients.  Furthermore,  the
permanent  presence  of  European  experts  on  the  sites  of
nuclear  power  stations 
is  a  unique  feature  of  the
programme,  as  well  as  being  a  considerable  expense.  In
order  to  explain  the  misunderstandings  which  the
programme  has  suffered,  the  following  must  be  taken
into  consideration:

1.  the  quality  of  the  services  provided  by  these  experts,

and

2.  the  differences  between  the  points  of  view  of  the
lender  and  the  recipients,  which  are  much  more
marked  in  the  nuclear  safety  sector  than  in  the  other
sectors  to  which  the  programmes  apply.

(a)

In  the  case  of  complex  projects,  the  technical
5.2.
choices  which  could  arise, 
including,  potentially,
abandoning  the  project,  cannot  be  known  in  advance.  A
sufficiently  detailed  definition  of  the  tasks  which  the
contractor  must  undertake  over  the  whole  duration  of
the  project  is  therefore  not  possible.  In  any  case,  a
phase-by-phase  approach  is  imperative  for  the  proper
management  of  public  funds.  Like  the  Court,  the
Commission  considers  that  a  phased  approach  generally
leads  to  better  monitoring  of  the  content  and  the
organisation  of  the  contracts.  The  obvious  disadvantage
of  this  approach  is  that  it  tends  to  complicate  and  slow
down  the  implementation  of  the  projects.

5.2.
(b) Reallocation of the budgets to other projects is
desirable only if it is compatible with the duration of the
budgetary  commitment  and  if  it  does  not  involve  an
increase  in  the  workload  which  would  prejudice  the
execution  of  projects  that  have  already  been  selected.

The  ECU  2,7  million  project,  subsequently  cancelled,
concerns  a  study  for  a  new  system  of  protection  for  the
Kola  VVER  440/213  reactors.  The  Russians  were  very
keen  to  obtain  this  investment  preparation  project,  and
they  had  decided  to  request  a  Euratom  loan  to  finance
the  corresponding  investment.  It  was  only  at  the  end  of
the  Tacis  project’s  lifespan  that  the  loan  request  was
abandoned. This project, designed to prepare for a major
investment,  was  therefore  a  fully  justified  project  for
Tacis.

identified (normally during the financial evaluation of the
invitation  to  tender).

5.2.
(d) The  difficult  staff  situation  under  which  the
programme  unit  had  to  operate,  as  recognised  by  the
Court  in  paragraph  4.12  of  its  report,  must  be  borne  in
mind.

in  any  case  exceed  the
5.3. As  the  requirements 
resources available, the choice of the best projects should
be based on several criteria. For these projects, the active
participation  of  the  partners  could  be  regarded  as  a
positive  sign  for  its  implementation.

The  number  of  partners  is  indeed  high,  but  it  is  justified
by  the  desire  to  ensure  a  high  level  of  transparency  and
to ensure an implementation which respects the objectives
of  our  programme.  This  primarily  concerns  the  technical
preparation, the method of awarding the contract and the
involvement  of  the  safety  authorities.

5.4. The  role  of  the  TPEG  is  set  within  a  contractual
framework.  In  this  context,  it  is  not  unusual  that
Commission  contractors  visit  the  recipients  without  the
participation  of  the  Commission.

However,  important  or  final  discussions  have  always
been  carried  out  by  the  Commission.

The  difficult  staff  situation 
in  the  unit  concerned,
acknowledged by the Court in paragraph 4.12, must also
be  borne  in  mind.

5.5.
It  should  be  noted  that  the  status  of  the  Joint
Research Centre, which has allowed it to participate as a
contractor  in  the  implementation  of  the  programmes,  is
possible  only  in  the  light  of  an  amendment  to  the
Financial  Regulation  which  was  made  in  May  1995.
Furthermore,  while  the  JRC  has  considerable  advantages
as  a  result  of  its  independence,  it  is  not  in  a  position  to
meet all the needs for expertise required to implement the
implementation  must
programmes.  Consequently, 
continue  to  rely  partly  on  the  Union’s  nuclear  industry.

As  regards  the  TPEG,  its  formation  was  investigated  by
(‘negative
the  Directorate-General 
clearance’  was  granted).  Moreover,  the  obstacles  to  its
participation  in  the  preparation  of  the  programmes
appeared  only  with  the  adoption  of  the  third  Tacis
regulation  (1996).

for  Competition 

Budgets  allocated  for  on-site  activities

5.2.
(c) This  is  already  the  practice.  However,  an
increase  in  the  budget  allocated  to  a  project  can  be
effected  only  if  the  budget  balances  or  reserve  funds  are
available  when  the  need  to  increase  the  budget  is

5.6.
It  should  not  be  concluded  that  an  action  is  less
important because it has been allocated a smaller budget.
Other  factors  such  as  the  intrinsic  cost  of  the  services  or

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supplies  concerned  or 
absorption  must  be  taken  into  account.

the  recipient’s  capacity 

for

In  this  context,  the  difficult  staff  situation  in  the  unit
concerned,  acknowledged  by  the  Court  in  paragraph
4.12,  must  be  borne  in  mind.

It  should  be  borne  in  mind  that,  at  the  outset,  the
presence  of  EU  experts  at  nuclear  power  plants  in  the
NIS  and  in  the  CEECs  was  looked  upon  with  suspicion
by  the  plant  operators.  They  were  often  of  the  opinion
that  the  West  had  little  to  teach  them  and  that  only
equipment  supplies  were  of  real  interest.  Advice  and
training  on  operational  and  organisational  issues  was  at
best  to  be  tolerated.

On  the  sites  where  the  contractor’s  contribution  to
operational  safety  was  not  appreciated  by  the  recipient,
the transfer of the safety culture mainly took the form of
training  activities  created  around  equipment  supply
projects,  which  were  therefore  not  identified  as  complete
projects  so  that  they  would  not  be  refused  by  the
recipient.  For  the  sites  which  have  shown  a  greater
capacity for absorption, it has been possible to implement
activities that are more targeted to operational safety and
are  independent  of  equipment  supplies.

5.7. The Commission is aware that the budgets allocated
to  nuclear  safety  are  considerably 
less  than  actual
requirements and is counting on its actions to serve as an
example and guide. The budgets are therefore determined
mainly  by  considerations  of  lending  and  absorption
capacity.

Delays  and  the  stage  reached  in  implementing  the
operations

Delays  in  preparing  contracts

5.8. Since  1997,  the  Commission  has  put  in  place
several 
programme
to 
implementation, especially:

accelerate 

measures 

1.  a  reduction  in  the  number  of  projects  financed,

2.  cancellation  of  projects  which  cannot  be  contracted

quickly  enough,

3.  commitment  of  budgets  only  for  projects  that  are
sufficiently  developed  to  be  implemented  immediately
after  the  financing  decision.

5.9. As  far  as  equipment  supply  projects  are  concerned,
the  stages  where  the  delays  occur  are  mainly:

reached 

Stage 
projects

in 

implementing  operational 

safety

It  is  easier  to  implement  technical  assistance
5.11.
is  therefore  not
projects  than  concrete  projects.  It 
it  should  be  quicker.  Furthermore,
surprising  that 
technical  assistance  has  a  raison  d’eˆtre  independent  of
equipment  supplies.

Having  said  that,  the  Commission  does  accept  that
neither  its  contractors’  services  (on-site  operators)  nor  its
own  supervision  of  these  contractors  has  been  of  the
standard  required.  In  this  context,  the  difficult  staff
situation  in  the  unit  concerned,  acknowledged  by  the
Court  in  paragraph  4.12,  must  be  borne  in  mind.

5.12.
(a)  and  (b) The  Commission  accepts  that  its
procedures  have  contributed  to  the  slow  implementation
of  the  programmes.  The  question  of  how  to  adapt  them
will  be  considered  as  part  of  the  process  of  drawing  up
the  Commission’s  proposal 
the  new  Tacis
Regulation.

for 

5.12.
(b) As  regards  the  tendering  procedures  more
particularly,  it  should  be  mentioned  that  several  projects
were delayed by the refusal of the recipient bodies in the
partner countries to accept or cooperate with the opening
of  the  contracts  to  competition,  even  when  this  was
objectively justified.

The  Commission  on  several  occasions  consulted  the
operators  involved  to  see  if  competitive  bidding  could  be
applied to the programme. Their response was to confirm
that  invitations  to  tender  should  indeed  be  the  basis  on
which  equipment  supply  contracts  should  be  awarded.

5.13.
It  is  natural  that  the  recipients  should  wish  that
the  assistance  promised  them  should  be  provided  as
quickly  as  possible,  by  giving  them  as  much  authority  as
possible  in  defining  and  implementing  the  programmes,
and that they should not concern themselves greatly with
the  procedures  followed:

Timetables

1.  definition  and  approval  of  specifications,  which  are
the  responsibility  of  the  on-site  assistance  operators
and  the  recipients,  and

2.  evaluation  and  approval  of  the  tenders,  which  are
principally  the  responsibility  of  the  on-site  assistance
operators  and  the  Commission.

At  the  outset,  the  only  timetables  possible  were  those
based  on  European  parameters.  It  rapidly  became  clear
that  the  local  situations  encountered  by  the  partners  and
the application of new procedures for all the participants
rendered  these  timetables  irrelevant,  in  spite  of  the  fact
that  they  were  supposed  to  be  binding,  and  each  partner
laid  responsibility  at  the  other’s  door.

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Procedures

The  Commission  has  recently  revised  the  procedure  for
awarding  contracts  in  on-site  assistance,  so  as  to  clarify
who  is  responsible  for  what  and  reduce  the  number  of
stages  where  Commission  approval  is  necessary.

It  remains  the  case,  however,  that  the  procedures  put  in
place to ensure rigorous management of public funds are
sometimes  too  complex  for  the  operational  requirements
of  the  Tacis  programme.  These  procedures  are  not  very
different from those which govern the use of public funds
in  the  Member  States.

Participation  of  the  recipients

As  in  the  other  sectors  of  the  Tacis  programme,  the
recipient  has  a  vote  in  the  evaluation  committees.

Communication  with  the  Russian  recipients  has  been
considerably  improved  with  the  creation  of  the  Joint
Management  Unit  in  Moscow,  and  has  compensated  to
some  extent  for  the  Commission’s  lack  of  internal
resources.

Assistance  to  the  safety  authorities

5.16. The  Commission  recognises  the  truth 
in  the
Court’s analysis of the assistance to the safety authorities.
This component of the Tacis programme is a key element
in  promoting  nuclear  safety  in  the  recipient  countries.  It
should  be  stressed  that  the  Commission’s  approach,  even
though  it  may  appear  unwieldy  in  its  implementation,  is
based  on  respect  of  a  basic  code  of  ethics  intended  to
strengthen  the  safety  authorities’  independence:

1.  as  a  general  rule,  the  participation  of  the  formal
recipients in the Tacis programme cannot be financed
by  the  Commission,

2.  the  granting  of  licences  was  not  financed  by  the
Commission,  so  as  to  avoid  creating  a  conflict  of
interests  for  the  safety  authority,

3.  services  for  the  safety  authority  must  be  provided  by
its  European  counterparts  so  as  to  avoid  a  situation
where 
industrial  players  are  advising  the  safety
authority.

Safety  studies  and  analyses

5.18. So  as  not  to  hold  up  the  implementation  of  the
Tacis  programme,  the  Commission  concluded  contracts
under  the  1991  programme  which,  because  of  doubts
about  the  current  system  of  civil  liability,  included
restrictive  clauses  on  sending  the  results  of  studies  to  the
recipients.  However,  the  Commission  did  at  the  same
time  try  to  find  an  interim  solution  to  this  problem,

pending  Russia’s  ratification  of  the  Vienna  Convention.
These  efforts  led  to  a  Memorandum  of  Understanding
being signed with the Russian Federation in 1995, which
includes  a  provision  on  nuclear  civil  liability.

Since the Memorandum was signed, all restrictive clauses
proposed  by  the  contractors  have  been  systematically
rejected. In the course of 1997 a solution was also found
for  contracts  concluded  before  the  Memorandum  was
signed.  There  was  an  exchange  of  correspondence
between  the  contractors  concerned  and  the  Minister  for
Atomic  Energy  of  the  Russian  Federation  (Minatom),
since  when  the  respective  reports  have  been  sent  to  the
recipients.  It  should  be  noted  that  the  complaints  made
on  this  subject  are  not  entirely  justified:  the  Russian
technical  institutes  did  in  fact  collaborate  closely  on  the
studies  concerned.

5.19. The  Commission  agrees  with  the  Court  about  the
importance  of  proper  management  of  sub-contracts  with
the  Russian  institutes.  These  Russian  institutes  often
provide input for our projects in more than one capacity,
as  design  institute,  preferred  industrial  partner  of  the
final  recipient  and  main  instrument  of  cooperation  and
technology  transfer  from  the  Union  to  the  recipient.

The approach chosen, particularly for the study contracts
under  the  1991  Tacis  programme,  consisted  of  imposing
the  same  amount  for  the  subcontract  on  the  tenderers.
This  amount  was  set  at  a  flat  rate  in  advance  by  the
Commission  on  the  basis  of  a  technical  opinion  by
European  Union  experts.  In  all  cases  except  one,  this
the  Russian
amount  was 
subcontractors.

fact  accepted  by 

in 

Furthermore,  the  fees  paid  to  European  experts  have  for
the last few years been between 7 and 9 times those paid
to Russian experts. This difference takes account of many
factors  such  as  purchasing  power  parities,  wage  costs,
and  working  tools  and  methods.

5.20. As  has  already  been  said,  the  Commission  avoids
interfering  in  questions  of  subcontracting.  However,  it
does  encourage:

a)  local  subcontractors  not  to  accept  clauses  linking
their  payment  to  the  main  contractor’s  payment;

b)  tenderers  to  specify  the  subcontracting  terms,  which
would allow the subcontractors to be paid an advance
on  their  services.

In  certain  cases,  in  order  to  avoid  a  dispute  between  the
contractor  and  the  local  subcontractor  prejudicing  the
programme  as  a  whole,  the  Commission  has  tried  to

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resolve  the  points  at  issue.  It  has  also  happened  that  a
subcontractor  has  complained  of  not  being  paid,  while
the  contractor  has  been  able  to  prove  that  he  has  made
the  payments.

development of nuclear safety in the countries concerned,
of  the  particularly  difficult  economic  conditions  that  the
players  involved  have  to  face.  This  goes  as  much  for  the
safety  authorities  as  for  the  operators  of  nuclear  plants.

Actual  mobilisation  of  the  appropriations

Effectiveness

5.21. and 5.22. Since 1997, the Commission has made a
number  of  changes  to  the  programme  that  will  lead  to
more  rapid  implementation  in  the  future.  These  include:

—  reduction  of  the  number  of  projects  selected  for

financing,

—  cancellation  of  projects  whose  launch  is  unduly

delayed,

—  commitment  of  funds  only  when  projects  have  been
sufficiently  developed  to  permit  an  immediate  launch
after  the  financing  decision,

—  establishment  of  better  lines  of  communication  with
the

the 
Moscow-based  Joint  Management  Unit.

beneficiaries, 

example 

through 

for 

5.23. As  a  general  rule  the  recipients  confirm  their
interest  in  these  projects  which  have  not  yet  been
launched and deplore the possibility of cancelling projects
for  which  considerable  preparatory  work  has  often  been
done.

6.  CONCLUSION

Overall  evaluation

6.2. The Commission is pleased to note that the Court’s
findings  confirm  the  progress  that  has  been  made  in
developing,  together  with  the  beneficiaries,  a  common
understanding  of  the  objectives  of  the  programme  and  a
climate  of  trust  and  cooperation.

The  Commission  also  accepts  that  the  programme  has
suffered  from  excessive  delays  and,  to  a  lesser  degree,
distortions  of  the  original  objectives.  This 
is  not
surprising  in  view  of  the  difficulties  associated  with  a
dialogue  between  two  very  different  safety  cultures.

While  stressing  the  fundamental  difficulty  that  exists  in
measuring  the  results  of  an  action  which  is  limited  in
terms  of  needs  and  which  in  large  measure  concerns  the
safety culture, it should be mentioned that several sources
have  confirmed  that  positive  results  have  been  achieved.
Clearly  account  must  be  taken,  when  assessing  the

6.3. As  indicated  in  points  2.1,  3.2,  3.5  to  3.7  and  5.1,
the  Commission  has  acted  within  the  framework  of  a
well-defined strategy. As far as the applicant countries are
concerned,  this  strategy  is  clearly  indicated  in  Agenda
2000  and  in  the  communication  to  the  Council  and
Parliament  of  31  March  1998  (COM  (1998)  134).

the  strategic  priorities  with 

The  Commission  is  making  a  considerable  effort  to
discuss 
the  countries
concerned.  This  is  the  case  for  the  applicant  countries
under  the  accession  partnerships  and  for  the  new
independent  States.  As  far  as  the  latter  in  particular  are
concerned,  the  Commission  is  having  regular  discussions
with  Ukraine,  both  bilaterally  and  in  the  context  of  the
G7.  As  for  Russia,  a  new  initiative  has  been  undertaken
to  redefine  the  priorities  for  the  future.

The  Court  recommends  that  better  account  should  be
taken  of  the  economic  reality  of  the  recipient  countries.
The  Commission  considers  that  it  is  necessary  to  find  a
way  of  cooperating  with  these  countries  so  that  they  can
give sufficient priority to nuclear safety and reach realistic
solutions for their energy problems, while taking account
of  the  need  to  develop  alternative  energy  sources  and
increase  energy  efficiency.

Efficiency

6.4. to 6.6. The Commission has taken concrete steps to
improve  the  implementation  of  the  programmes.

—  In  March  1998, 

the  Commission  set  up  an
interdepartmental  group  responsible  for  improving
the  coordination  of  its  activities  in  the  nuclear  sector
in  the  East  and  making  better  use  of 
internal
resources.

—  Since  September  1997  the  resources  available  at  the
Joint  Research  Centre  have  been  fully  used  at  all
stages  of  the  programme.

—  Generally  speaking, 

the
technical  assistance  programmes  will  be  improved  as
a  result  of  the  creation  of  the  Joint  Relex  Service
(SCR)  in  1998.

implementation  of 

the 

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9.2.1999

—  A Joint Management Unit was set up at the beginning
improve

of  1998 
transparency  for  the  Russian  recipients.

in  Moscow,  which 

should 

The  Commission  will  consider  an  update  of 
procedures  under  the  new  Tacis  regulation.

the

Economy

6.7. See  paragraph  4.6.

6.8.  and  6.9. The  Commission  pays  particular  attention
to  whether 
the
European  contractors  and  the  partners  in  the  recipient
countries  are  in  order.

the  contractual  relations  between 

Cooperation between the EU companies and the recipient
organisations  does  exist.  The  Commission  agrees  that  it
must  be  strengthened  and  that  the  problems  and
misunderstandings  of  the  past  must  be  avoided.  In  this
context,  it  is  important  to  assess  the  real  costs  of  the
organisations 
in  these  countries,  which  rarely  have
cost-accounting  systems.

Transparency  of  the  operations

to  carry  out  the  final  payments  and  then  will  disappear.
Article B7-535 concerns cooperation with the central and
eastern  European  countries  and  the  newly  independent
States  under  the  Euratom  Treaty.  In  1997,  these  actions
were  financed  by  articles  relating  to  the  Phare  and  Tacis
programmes. Article B7-536 (Community contribution to
the  European  Bank  for  Reconstruction  and  Development
for  the  Chernobyl  Shelter  Fund)  also  concerns  a  one-off
action.

However,  the  largest  amounts  come  from  the  Phare  and
Tacis  headings.  These  are  geographical  programmes
intended  for  countries  listed  in  the  legal  basis  and
covering  several  fields.  For  these  two  programmes,  the
amounts  intended  for  projects  relating  to  nuclear  safety
can  come 
from  multi-recipient  programmes  or  be
included  in  national  programmes.  This  is  the  case  for  all
the sectoral programmes intended for these countries and
included 
in  the  two  big  geographical  programmes.
Creating special budget headings for each heading would
lead  to  a  proliferation  of  budget  headings  for  each
geographical area.

This  system  gives  an  overview  of  the  amounts  intended
for  each  country  on  the  one  hand  and  of  the  horizontal
programmes  on  the  other.  The  needs  of  the  various
countries  are  very  different  and  this  must  be  taken  into
account.

6.10.
It  is  true  that  the  operations  relating  to  nuclear
safety  are  financed  from  several  budget  headings.  Article
B7-534  (Completing  the  programme  of  cooperation  on
nuclear  safety  with  the  countries  of  central  and  eastern
Europe  and  the  new  independent  States)  now  exists  only

As regards the monitoring and the reports that the Court
would like, the nuclear sector is of course included in the
Phare  and  Tacis  annual  reports  sent  to  the  budgetary
authority  and  published.  In  general,  each  programme  is
also evaluated individually.