Report from the Commission - Fourth progress report on the implementation of the Chernobyl Shelter Fund - September 2007 {SEC(2007) 1701}
Date: 2007-12-19
Institutions: European Commission
Subjects: EBRD, EU aid, Ukraine, environmental protection, international aid, nuclear accident, nuclear safety, report

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 19.12.2007 
COM(2007) 825 final 

REPORT FROM THE COMMISSION 

Fourth Progress Report  
on the implementation of the Chernobyl Shelter Fund 
September 2007 

{SEC(2007) 1701} 

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1. 

INTRODUCTION 

The Chernobyl Nuclear Power Plant (ChNPP) is situated 110 Km north of Kiev, its 
construction  began  in  the  1970s.  By  1983  four  units  were  in  operation  producing 
about 10 percent of Ukraine’s electricity. At the time of the accident two additional 
units  were  under  construction.  The  nearby  city  of  Chernobyl  had  a  population  of 
12,500. 

Following the accident of 26 April 1986 some 200,000 people were evacuated from 
the  vicinity  of  Chernobyl  and  a  Shelter  (sometimes  referred  to  as  ‘sarcophagus’) 
enclosing  the  remains  of  ChNPP  Unit  4  was  constructed  under  exceedingly 
hazardous  conditions.  Units  1,  2  and  3  (adjacent  to  Unit  4)  were  put  back  into 
operation, raising the fear of another accident. 

The  G7  countries  and  the  European  Commission  (EC)  took  the  lead  in  providing 
assistance  to  mitigate  the  consequences  of  the  accident.  The  Memorandum  of 
Understanding between the G7 the EC and Ukraine on the closure of Chernobyl1 by 
the year 2000 reflects the commitment, the Commission has played a major role in its 
implementation  through  the  Tacis  programme.  The  G7  (now  G8)  and  the 
Commission  have  reaffirmed  the  intention  to  continue  their  support  at  several 
summits. 

The  Shelter  was  not  intended  to  be  a  permanent  solution  and,  in  fact,  it  became 
increasingly unstable, it deteriorated allowing the ingress of rainwater. There was a 
risk of collapse due to seismic disturbance, extreme weather or further deterioration 
of the structure. The possibility of contamination of the surrounding zone will persist 
until  the  highly  radioactive  material  contained  under  the  Shelter  is  adequately 
isolated from the environment.  

In May 1997 a group of international experts from the EU, USA, Japan and Ukraine 
finalized a multidisciplinary construction management programme designated as the 
Shelter  Implementation  Plan  (SIP).  The  SIP  foresaw  remedial  work  on  the  Shelter 
directed  towards  making  it  physically  stable  and  environmentally  safe.  In  the  same 
year, the G7 and the Commission and other donors requested the European Bank for 
Reconstruction  and  Development  (EBRD)  to  set  up  the  Chernobyl  Shelter  Fund 
(CSF) to finance the SIP. 

In  2007,  ten  years  after  the  agreement  on  the  SIP  between  the  G7  and  the  EC  and 
Ukraine and its inception, most of its tasks have been completed. The required site 
infrastructure  and  facilities  have  been  built  and  the  stabilization  of  the  shelter  has 
been  finished.  This  makes  possible  the  start  of  the  construction  of  the  New  Safe 
Confinement (NSC) which represents the last major construction project at the site. 

The initial indicative cost of the SIP (calculated in 1997) amounted to approximately 
USD  758  million  (USD  768  million  including  the  licensing  support)  and  a 

1 

Memorandum of Understanding Between the Governments of the G7 Countries and the Commission of 
the European Communities  and the Government of Ukraine on the Closure of the Chernobyl Nuclear 
Power Plant, done in Ottawa on 20 December 1995.  

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construction time of seven years (1998-2005). A first pledging conference was held 
in New York in  November  1997 to raise the required  funds.  Twenty  five countries 
pledged  some  USD  400  million  including  Ukraine’s  USD  50  million  in-kind 
contribution. This sum was sufficient to undertake work on the first tasks of the SIP. 
The  project  started  effectively  in  April  1998  with  the  setting  up  of  the  Project 
Management Unit (PMU).  

Council Decision 98/381/EC of 5 June 1998 concerning the Community contribution 
to the European Bank for Reconstruction and Development for the Chernobyl Shelter 
Fund2 provided the legal basis for a Community contribution to the CSF of a USD 
100 million pledge made at the 1997 G7 summit in Denver. This was paid over the 
years 1999/2000 from the TACIS financial envelope.  

A  second  pledging  conference  was  held  in  July  2000  in  Berlin.  Some  USD  320 
million  were  pledged  by 22 countries bringing the total amount pledged in the two 
conferences close to the estimated cost of USD 768 million. The Community pledged 
a  second  contribution  of  €100  million  which  was  appr oved  by  Council  decision 
2001/824/EC3. 

In 2003 the PMU presented a revised schedule and a first cost estimate, based on the 
actual  cost  of  completed  projects  and  contract  values  for  ongoing  projects, 
amounting to some USD 1,091 million. The EBRD, as manager of the Fund, warned 
that a replenishment was needed if the new schedule was to be maintained. The latest 
estimate  served  as  a  basis  for  additional  pledges  by  the  donors  in  London  in  May 
2005. Taking into account the historical burden sharing, the Commission pledged an 
additional €49.1 million, bringing the Commi ssion’s total contribution so far to the 
Fund to some €240 million. However, due to  delays, escalation and increases in the 
prices of labour and materials, a further significant increase relative to the first cost 
estimate was subsequently announced to the Assembly of Contributors (see below). 

According to Art. 3 of Council Decision 98/381/EC and Art 4 of Council Decision 
2006/908/EC  concerning  the  Community’s  contributions  to  the  EBRD  for  the 
Chernobyl  Shelter  Fund,  the  Commission  must  submit  progress  reports  on  its 
implementation  to  the  European  Parliament  and  the  Council.  Such  reports  were 
submitted  in  October  19994,  September  20015  and  December  20036.  The  present 
report updates the previous ones, based mainly on the progress communicated to the 
Assembly of Contributors and other information provided by the EBRD7.  

2. 

POLITICAL AND INSTITUTIONAL ISSUES 

It  has  often  been  mentioned  that  a  stable  institutional  environment  and  competent 
management  are  essential  for  the  orderly  and  timely  implementation  of  the  SIP. 
However,  given  the  political  visibility  of  the  projects,  the  sums  involved  and 

2 
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7 

OJ L 171, 17.6.1998, p. 31  
OJ L 308, 27.11.2001, p. 25 
COM(1999)470 of 12.10.1999 
COM(2001)251 of 29.05.2001 
COM(2004)481 of 14.05.2004 
An expanded version of this report together with annexes is annexed to the present document. 

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differing agendas, difficulties were inevitable. Furthermore, the unique aspects of the 
SIP required a special licensing process and legislation to be put in place. 

The  need  for  ownership  at  the  senior  level  of  the  Ukrainian  administration  was 
recognized  at  a  very  early  stage.  Practical  measures  were  taken  in  this  respect, 
Ukraine  took  full  membership  of  the  Assembly  and  the  Joint  Ukraine-EBRD 
Committee  was  included  in  the  Rules  of  the  CSF.  The  Framework  Agreement 
between  the  EBRD  and  Ukraine  concluded  in  1997  and  ratified  by  the  Ukrainian 
Parliament in 1998, created the legal basis for the operation of the CSF in Ukraine. 
These  arrangements  established  a  solid  basis,  but  frequent  changes  of  government 
and  senior  administration  levels  made  it  impossible  to  maintain  the  continuity  of 
leadership, the institutional memory and the required stability.  

One  particular  factor  which  caused  serious  concern  was  the  transfer  of  the 
administrative responsibility for the ChNPP from the Ministry of Fuel and Energy to 
the  Ministry  of  Emergencies  in  2005.  Although  this  was  an  internal  Ukrainian 
matter, it resulted in experience and institutional memory being lost in the process, 
which inevitably caused disruption. 

In  2006  the  tendering  process  for  the  NSC  created  controversy.  The  review  of 
complaints and extensive discussions prior to awarding the contract, particularly with 
the  Ukrainian  side,  caused  over  one  year’s  delay,  which  led  to  a  considerable  cost 
increase due to escalation and management costs. The donors took a firm stance in 
that the CSF Rules should be strictly adhered to and that there could be no deviation 
from the conclusions of the tendering process once it was established that there were 
no irregularities.  

The  licensing  approach  for  the  SIP  is  also  recognized  as  essential  for  the  orderly 
implementation of the projects. In 2003 the Cabinet of Ministers approved a decree 
on the SIP regulatory reviews and approvals: the “SIP Implementation Order”. This 
was followed in mid 2004 by a further decree simplifying the certification procedure 
for equipment procured under the CSF. 

The  institutional  environment  has  been  one  of  the  main  causes  of  the  delays  in  the 
Chernobyl  projects.  It  is  expected  that  with  the  experienced  gained  over  the  years 
and most of the important decisions concerning the SIP having now been taken, the 
running  of  the  projects  will  be  smoother  in  future.  However  the  NSC  project, 
representing about half of the cost of the SIP, is yet to start. Any delays, particularly 
during  the  construction  phase,  would  be  highly  costly,  therefore  all  parties  need  to 
remain  attentive  so  that  the  impact  of  any  problems  that  may  arise  be  immediately 
dealt with and minimized. 

3. 

STATUS OF IMPLEMENTATION OF THE SIP  

3.1. 

Grant agreements  

The  financial  commitments  of  the  CSF  are  determined  by  grant  agreements 
concluded  between  the  Bank  and  the  Ukrainian  recipients.  The  recipient  can  place 
contracts  according  to  agreed  allocation  schemes  in  accordance  with  EBRD’s 
Procurement Policies and Rules. The Bank monitors compliance and disburses funds 

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directly  to  contractors;  the  Bank’s  Nuclear  Safety  Department  and  the  Recipient’s 
PMU provide an additional layer of control. So far, the EBRD has concluded 8 grant 
agreements.  

As  of  30  June  2007  €457  million  had  been  allocated  to  Grant  Agreements.  The 
Assembly  of  17  July  2007  approved  the  allocation  of  €330  million  to  Grant 
Agreement No. 8 and authorized the Bank to allocate new contributions to this Grant 
Agreement until an amount of €490 million is reached. 

As  of  July  2007  138  contracts,  amounting  to  €356  million,  had  been  concluded 
within the seven initial grant agreements, 86 of these had been completed.  

3.2. 

Stabilization and other projects 

The Shelter, which isolated the high level radiation sources and buried the remnants 
of  the  destroyed  reactor  of  Unit  4,  was  completed  by  the  end  of  November  1986. 
Some  of  its  structural  elements  were  distorted  and  presented  cracks  indicating  a 
potential  risk  of  collapse.  In  order  to  reduce  this  risk,  a  contract  was  concluded  in 
July 2004 with a Ukrainian-Russian consortium (led by Atomstroyexport of Russia) 
to implement stabilization measures. These will reduce the risk of collapse over the 
next 10 to 15 years by which time the Shelter will be enclosed in the NSC and the 
deconstruction of the most unstable parts will take place. 

The work on stabilization started in November 2004 and was completed on schedule 
and within the budget by the beginning of 2007. This was a significant success given 
the  difficult  conditions  inside  the  Shelter  (accessibility,  debris,  high  levels  of 
radiation  and  unpredictability  of  further  developments).  Minimizing  the  radiation 
exposure  of  personnel  was  paramount;  this  was  achieved  by  careful  planning, 
training,  shielding  and  assembly  of  structural  components  in  a  clean  area  of  the 
construction site.  

The EBRD reported also that significant progress been achieved on the infrastructure 
projects. 

3.3. 

The New Safe Confinement (NSC) 

The  New  Safe  Confinement  (NSC)  is  the  designation  of  the  arch-shaped  structure 
which  will  be  assembled  in  a  safe  area  near  Unit  4  and  then  slid  across  the  old 
shelter. It is intended to isolate radioactive material from the environment for up to 
100  years.  It  will  also  contain  equipment  and  facilities  to,  when  appropriate, 
dismantle the existing shelter and remove Fuel Containing Material (FCM).  

The  tendering  for  the  NSC  took  much  longer  than  anticipated.  The  design  team 
completed  the  tender  package  for  detailed  design  and  construction  by  June  2003, 
however agreement on the final tender took until March 2004, when the invitations 
for technical proposals were launched. Three proposals were received in November 
2004.  Following  an  exceptionally  thorough  clarification  of  the  technical  and 
regulatory  requirements,  due  to  the  impact  on  schedule  and  price,  two  consortia 
(Novarka and CH2M Hill) were invited to submit commercial proposals. The review 
and evaluation were completed by February 2006. 

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The subsequent evaluation process for the NSC proved to be rather lengthy, due to a 
procurement  complaint  and  the  questioning  of  the  results  by  some  Ukrainian 
officials,  which  required  a  further  review  in  accordance  with  the  Rules  of  the 
Chernobyl Shelter Fund and the EBRD Procurement Policies and Rules.  

All outstanding issues were resolved to the satisfaction of the parties concerned and 
the  independent  observers  confirmed  that  the  pre-award  contract  negotiations  had 
been  duly  carried  out.  At  the  Assembly  of  17  July  2007  the  donors  authorized  the 
Bank to give its non-objection to Grant Agreement No. 8 for the NSC and approved 
an  initial  allocation  of  funds.  The  Bank  and  the  Ukrainian  authorities  signed  the 
Grant  Agreement  at  the  beginning  of  August.  The  letter  of  award  to  Novarka  was 
transmitted  by  the  ChNPP  on  August  9  and  the  actual  contract  was  signed  on  24 
August 2007. The current schedule foresees the completion of the NSC by December 
2011. 

3.4. 

Health, safety and environment 

An  Environmental  Action  Plan,  established  in  1998  according  to  EBRD  standard 
policy,  is  regularly  updated  and  periodically  audited  by  the  Bank’s  Environmental 
Department and its independent consultants. 

It is important to note that biomedical and screening programmes were put in place 
in  2004  and  that  more  than  three  thousand  people  were  checked.  With  some  86 
contracts  completed  there  have  been  no  radiological  or  industrial  accidents  with 
major consequences. 

3.5. 

Radioactive waste management 

Continued  attention  is  required  by  Ukrainian  authorities  to  the  waste  management 
problems  and  to  the  co-ordination  of  the  international  projects  dealing  with 
radioactive  waste  so  that  the  SIP  will  not  be  unduly  delayed.  Buffer  facilities  have 
been  identified  to  solve  the  most  urgent  problems  (including  additional  space  for 
high level waste storage made available by the Tacis funded Industrial Complex for 
Solid Radioactive waste Management) so that, in the short term, waste storage will 
not impact the critical path for completion of the SIP. 

4. 

REVISED SCHEDULE AND COST ESTIMATE 

4.1. 

Schedule  

The implementation  of  the  SIP started by the  end  of 1998  with  the mobilization of 
the  PMU  as  well  as  the  contract  awards  for  Licensing  Consultant  to  the  Ukrainian 
nuclear  regulator  and  the  Early  Biddable  Projects.  Despite  delays,  neither  the 
stabilization  of  the  shelter  nor  the  implementation  of  the  SIP  tasks  affected  the 
critical path of the SIP, this has always been dictated by the activities associated with 
the NSC. 

By mid 2003 the PMU expected that the commissioning of the NSC could take place 
by the end of 2008, based on approval of both the concept design and detail design 
and  construction  of  the  NSC  taking  5  years,  but  delays  in  the  tendering  process 
obliged the PMU to make successive revisions. 

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The key milestones of the NSC 

Completed: 

April 2001  Safe Confinement Strategy (P10 Programmatic Decision) 

July 2001  Work on the terms of reference of the concept design begins 

May-Oct 2002 

Notice to Proceed/Contract award for concept design 

June 2003  Concept design completed 

December 2003 

Concept design submitted for regulatory review 

March 2004  Invitations for detailed design and construction proposal 

July 2004  Approval of the concept design by the Cabinet of Ministers 

November 2004 

Stage 1 (technical) proposals received 

September 2005 

Commercial proposal from two bidding consortia 

November 2005 

Revised commercial proposals 

February 2006 

Evaluation completed 

September 2006 
confirms evaluation 

EBRD’s Procurement and Contracting Committee (PCC) review 

December 2006 to  NSC pre-contract discussions 

June 2007 

August 2007 NSC contract award 

Planned: 

December 2008 

Completion of detailed design for NSC (16 months) 

December 2011 

Completion of NSC (construction 3 years) 

4.2. 

Cost estimate 

The initial indicative cost of the SIP was put at USD 758 million in 1997 to which a 
lump  sum  of  USD  10  million  was  added  for  support  to  the  regulatory  authorities, 
bringing  the  total  to  USD  768  million.  This  figure  was  presented  as  a  preliminary 
cost estimate suitable to support international pledging of funds.  

The  EBRD  and  the  PMU  pointed  out  to  the  Assembly  that  the  SIP  was  a  concept 
paper providing only for the main elements of the projects. During implementation of 
the SIP the scope changed to take into account new needs or eliminate tasks which 
were  not  necessary.  The  SIP  had  assumed  that  most  of  the  preparatory  and 
infrastructure works would be available but, in fact, a number of these projects had to 

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be added to the scope. The SIP did not allow time for the regulatory process which 
added also to the costs, neither did it include any costs associated with management 
of  the  fund.  However,  the  largest  sums  which  were  added  to  the  cost  were  the 
contingencies  and  escalation  for  the  NSC  which  were  not  included  in  the  1997 
indicative cost. Some of the main cost elements, notably steel, energy, concrete and 
Ukrainian labour have increased sharply since 1997 (far beyond the average rate of 
inflation).  

In 2003 the PMU presented the first cost estimate based on actual cost of completed 
projects,  contract  values  for  ongoing  projects  and  estimates  for  the  projects  not  yet 
started,  amounting  to  USD  1,091,062,000.  A  revision  was  presented  to  the  donor’s 
assembly  in  February  2006.  It  made  adjustments  to  the  previous  estimate  based  on 
the progress and completion of subprojects and took into account the prices quoted 
by  the  two  bidders  for  the  NSC.  This  proved  to  be  significantly  higher  than 
anticipated and the cost estimate for the SIP was raised to USD 1,204,103,000. 

As the delays in the tendering process impacted the conclusion of the contract for the 
NSC, the cost will increase in line with the provisions of the tender. At the donor’s 
assembly of 17 July 2007 the PMU presented its latest ‘SIP cost Forecast’ amounting 
to  USD  1,390  million,  an  increase  of  USD  186  million  relative  to  its  previous 
estimate.  The  most  significant  changes  which  caused  this  increase  were:  escalation 
due  to  delayed  NSC  award  (USD  87.5  million),  USD  increase  due  to  Euro-USD 
exchange  rate  (USD  51.3  million)  and  increase  for  NSC  escalation  during 
performance (USD 47.3 million).  

The next important step in the assessment of the cost will be the completion of the 
detailed design of the NSC, which will provide precision on the quantities and cost of 
materials actually needed. This is expected to be available by the end of 2008 (some 
16 months after contract award). 

5. 

FINANCIAL OVERVIEW 

5.1. 

Income and expenditure 

At the end of June 2007 the Bank recorded total contributions of €739 million to the 
CSF,  corresponding  to  the  commitments  made  through  Contribution  Agreements, 
donations  and  in  kind  contributions.  The  Fund  has  accrued  interest  of  €71  million, 
which  brings  the  total  to  €810  million.  In  addition  there  are  a  number  of  pledges 
(mostly made at the May 2005 London fund-raising event) amounting to some €100 
million,  which  are  yet  to  be  committed  as  Contribution  Agreements  and  actual 
payments  

Until  30  June  2007  €457  million  had  been  allocated  under  the  7  grant  agreements 
concluded  until  then.  The  total  value  of  the  contracts  concluded  under  these  grant 
agreements amount to €356 million, of which €308 million have been disbursed.  

The  amount  of  unallocated  funds  as  of  30  June  2007  was  some  €300  million.  This 
amount will rise to some €400 million provide d that the outstanding pledges, yet to 
be formalized, will materialize. 

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5.2. 

New pledges 

The  SIP  cost  estimate  which  led  to  the  USD  1,091  million  figure  was  analysed  in 
detail  at  the  donors  assembly  in  April  2004.  It  was  made  clear  at  the  time  that  the 
uncommitted funds available under the CSF were not sufficient for the effectiveness 
of the future grant agreement for the New Safe Confinement.  

Following agreement amongst the donors on the respective contributions, a pledging 
event took place at the EBRD in London on 12 May 2005. The donors pledged the 
equivalent of €181.496 million,  including €49.1 million from the Commission, €22 
million  from  Ukraine  and,  for  the  first  time,  €10  million  from  Russia.  The  first 
instalment of the Commission’s pledge (€14.4  million) has been paid into the CSF in 
accordance with a Council Decision of 4 December 20068, a second instalment (€10 
million) will be financed by the Instrument for Nuclear Safety Cooperation and paid 
in  2007.  The  remainder  of  the  Commission's  pledge  will  be  paid  over  the  period 
2008-2011.  

There are presently enough funds available within the CSF to permit the conclusion 
of  the  first  phase  of  the  contract  for  the  NSC,  but  the  existing  funds,  plus  the 
outstanding pledges still to be converted into Contribution Agreements, will not be 
sufficient to cover the full cost of the contract.  

The members of the G8 plus the Commission, which represent the main contributors 
to  the  CSF,  have  reiterated  their  commitment  to  the  completion  of  the  SIP.  This  is 
clearly stated in the report of the G8 Nuclear Safety and Security Group (NSSG) to 
the leaders for the July 2007 G8 Summit Meetings in St. Petersburg. More recently, 
in the declaration of the G8 Heiligendamm Summit in June 2007, it is stated that: 

“…In recognition of the Chernobyl accident in 1986 we reaffirm our commitments –
under  former  G7/G8  Summit  declarations  and  memoranda  of  understanding  and 
through  Chernobyl  Shelter  Fund  (CSF)  and  Nuclear  Safety  Account  (NSA) 
programmes  –  to  undertake  joint  efforts  with  Ukraine  to  convert  the  damaged 
reactor unit site into safe conditions.”. 

6. 

FOLLOW UP AND SUPPORT BY THE EUROPEAN COMMISSION  

As  the  main  contributor  to  the  CSF,  the  Commission  follows  very  closely  the 
development  of  the  issues  affecting  the  Fund,  specially  those  having  schedule  and 
financial  implications.  The  Commission  services  are  in  regular  contact  with  other 
main  donors,  in  particular  those  in  the  EU,  and  the  EBRD.  The  Commission  has 
provided its political support whenever needed, for example in upholding the Rules 
of  the  Fund  (which  invoke  the  Bank’s  Procurement  Rules)  in  the  tendering  for  the 
NSC. 

The Commission’s support to the Chernobyl projects is not limited to the CSF. Tacis 
has  played  a  major  role  in  the  implementation  of  the  1995  Memorandum  of 
Understanding between the G7 and the EC and Ukraine on the closure of Chernobyl. 
The EC has so far committed some €470  million for Chernobyl and related projects, 

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OJ L 346, 9.12.2006, p. 28 

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the  majority  of  which  from  the  Tacis  budget.  These  projects  studied,  assessed  and 
mitigated the consequences of the Chernobyl accident and provided assistance for the 
decommissioning of the plant’s units 1, 2 and 3. A contribution was also made by the 
EC to the additional costs of replacement energy following the shut down of the last 
the  social  and  regional 
operating  unit 
consequences  of  the  closure  of  Chernobyl  and  provided  support  for  power  sector 
reform in Ukraine. 

in  2000.  Other  projects  addressed 

The  Commission  supported  the  construction  of  the  Industrial  Complex  for  Solid 
Radwaste  Management  (ICSRM),  which  is  nearing  completion,  and  the  projects 
under the EBRD’s Nuclear Safety Account. It provided also support to Ukraine for 
the  organization  of  the  conference  marking  the  20th  anniversary  of  the  accident  in 
2006. On the social and health side it is currently supporting the CORE programme. 
It  is  also  envisaged  to  support  a  project  to  improve  the  living  conditions  of  the 
children in the area affected by the accident. 

The  latest  cost  increases,  inevitable  as  they  may  be,  give  cause  for  concern.  The 
Commission  will  remain  committed  to  the  Chernobyl  cause  and  plans  to  make  an 
additional  effort,  in  accordance  with  the  historical  burden  sharing,  but  it  cannot  be 
expected to continue contributing to cover all cost increases solely from the limited 
budget of the Instrument for Nuclear Safety; this would be to the detriment of other 
nuclear  safety  projects.  The  contribution  of  the  Russian  Federation,  which  recently 
became  a  donor  to  the  Fund,  and  the  additional  contribution  of  Ukraine  helped  to 
reduce the deficit, however it is expected that Ukraine will take increasing ownership 
of the projects and contribute a larger share of the financial burden. 

7. 

CONCLUSIONS 

Significant  progress  has  been  achieved  on  the  projects  under  the  Shelter 
Implementation  Plan  (SIP),  notably  on  the  infrastructure  and  stabilization  of  the 
existing shelter, which was completed on schedule and within budget.  

The  SIP  management  and  environmental  audits  carried  out  in  2007  confirmed  the 
adequacy  of  existing  management,  as  well  as  industrial  and  health  and  safety 
arrangements. However the management audit pointed again to the need to increase 
the number of qualified Ukrainian staff in the Project Management Unit (PMU), to 
replace  dependency  on  Western  PMU  staff  and  ensure  long  term  stability  of 
management after commissioning of the NSC. 

The  schedule  for  completion  of  the  SIP  is  currently  end  2011.  The  critical  path  is 
determined by the New Safe Confinement (NSC) contract milestones. It is expected 
that the thorough analysis and preparation work will reduce the risk of costly delays 
during  the  construction  phase.  Good  management  and  cooperation  of  all  parties,  in 
particular  of  the  Ukrainian  government  and  the  regulators,  will  be  essential  for  the 
successful completion of the project. 

The total cost of the SIP, taking into account the cost of projects already completed 
or ongoing and the current cost of NSC plus escalation, has been put at USD 1,390 
million. 

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Taking into account the pledges made in 2005 in London, there are currently enough 
funds available in the CSF to conclude the contact for the NSC and start the work. 
However,  according  to  the  latest  estimates,  the  existing  funds  are  not  sufficient  to 
complete  the  project.  Additional  funds  will  be  required  to  complete  the  Chernobyl 
projects financed by the CFS as well as the Nuclear Safety Account.  

The SIP has been under-funded from the start and will have to continue relying on 
the solidarity of the international community, this is becoming increasingly difficult 
due to competing priorities.  

It is expected that Ukraine takes a more prominent role in management and financing 
during  the  major  construction  phase  at  the  Chernobyl  site  leading  to  a  sustainable 
Ukrainian management of the facilities once the NSC is commissioned. 

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