Commission staff working document - Status of the ITER Project accompanying the Communication from the Commission to the European Parliament and the Council - ITER status and possible way forward {COM(2010) 226 final}
Date: 2010-05-04
Institutions: European Commission
Subjects: financing method, international organisation, nuclear fusion, nuclear reactor, nuclear research

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EUROPEAN COMMISSION 

Brussels, 4.5.2010 
SEC(2010) 571 

COMMISSION STAFF WORKING DOCUMENT 

Status of the ITER Project 

accompanying the 

COMMUNICATION FROM THE COMMISSION  
TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 

ITER status and possible way forward 

{COM(2010) 226 final} 

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STATUS OF THE ITER PROJECT 

1 

INTRODUCTION 

ITER1  is  a  global  project  to  build  and  operate  an  experimental  reactor  with  the  aim  of 
demonstrating  the  scientific  and  technological  feasibility  of  fusion  energy  for  peaceful 
purposes. Its successful accomplishment would establish whether fusion can become a major 
sustainable  energy  source  contributing  to  the  EU's  strategy  for  the  long  term  security  in  the 
supply  of  energy.  Nuclear  fusion,  the  process  that  powers  the  sun,  offers  the  prospect  of 
producing  an  essentially  limitless  source  of  safe  and  clean  energy  with  no  CO2  emission, 
contributing  to  tackling  climate  change.  The  ITER  project  should  be  followed  by  a 
demonstration reactor, expected around 2050, on the path towards the commercial exploitation 
of  fusion  power.  Its  implementation  will  concur  to  the  achievement  of  the  "Smart  Growth" 
priority  of  the  European  strategy  for  smart,  sustainable  and  inclusive  growth  (Europe  2020 
strategy) as it will strengthen knowledge and innovation as drivers of the EU future growth. 

ITER  is  a  magnetic  fusion  energy  experiment,  building  on  the  achievements  of  several 
European precursors and especially on the Joint European Torus2 (JET), currently the world's 
highest performance fusion device. Indeed, it is recognized by scientists that the most advanced 
fusion  experiments  to  date  have  all  been  based  on  “magnetic  confinement”3.  ITER  is  a 
uniquely  global  cooperation  -  a  pioneering  initiative  seeking  to  demonstrate  shared 
technological solutions to global problems.  

With strong backing of the Council, the Commission successfully negotiated with international 
partners on behalf of the Community and succeeded to fix the site for building ITER in Europe 
at Cadarache, France. Being host of and the largest stakeholder in the project, gives Europe a 
leading  role  in  ITER's  construction  and  underpins  its  pre-eminent  position  in  fusion.  This 
position will afford Europe a unique opportunity to benefit from emerging fusion technologies 
and  possible  spin–offs.  It  also  endows  the  Euratom  with  special  responsibility  for  and 
commitments to the project. 

ITER  is  conducted  under  the  terms  of  an  International  Agreement4  between  the  European 
Atomic Energy Community (Euratom) and 6 other Parties - China, India, Japan, Korea, Russia, 
and  the  USA,  which  was  signed  in  Paris  in  November  2006  and  which  entered  into  force  in 
October  2007.  The  agreement  established  the  ITER  Organization  (IO)  with  full  international 
legal  personality,  to  be  responsible  for  the  joint  implementation  of  the  ITER  project.  The 
Members of the ITER Organization are the Parties to the Agreement and they jointly direct and 
supervise its conduct through their representation in the ITER Council which is the principal 
organ of the ITER Organization. 

The Agreement has an initial duration of 35 years in order to construct, operate, and de-activate 
the ITER facilities, broken down as follows:  

1 
2 
3 

4 

Originally denoted "International Thermonuclear Experimental Reactor". 
JET is situated at the Culham Science Centre in the United Kingdom. 
An alternative approach uses so-called "inertial confinement", which is in a considerably less advanced 
state of development towards practical exploitation. 
OJ L 358, 16.12.2006, p. 62–80. 

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−  The  construction  period,  the  most  intense  in  terms  of  resource  needs,  was  initially 
scheduled for 10 years and would culminate in the so-called "First Plasma", the physics 
process materialising the start of the operation.  

−  This will be followed by an operation phase of about 20 years during which ITER will 

be progressively brought to its full performance capabilities.  

−  After the end of operations, there will be a 5 years phase of deactivation, whereupon the 
host  country,  France,  will  take  over  responsibility  for  the  facilities  and  their 
decommissioning using a fund set aside during the operation for this purpose. 

Figure 1: overall planning of the ITER project5. 

Under  the  ITER  Agreement  each  Member  has  its  own  "Domestic  Agency"  responsible  for 
managing its contribution, and especially for procuring the various components needed to build 
ITER and to be provided to ITER Organization as contributions in kind . 

The  Euratom  contribution  for  ITER  is  entirely  managed  through  the  European  Joint 
Undertaking  for  ITER  –  "Fusion  For  Energy"  (F4E),  established  as  the  European  Domestic 
Agency by the Council in March 20076 and based in Barcelona, to discharge the international 
commitments of Euratom under the ITER Agreement. The Members of F4E, Euratom, the 27 
Member States plus Switzerland, are all represented in its governance. The EU contribution to 

5 

6 

This  planning  is  included  in  the  "Final  Report  of  the  ITER  Engineering  Design  Activities" 
Documentation Series No. 21, IAEA, 2001, referred in the article 3 of the ITER Agreement and included 
in the attachment "Final Report of Negotiations on ITER Joint Implementation, 1 April 2006 Attachment 
2_D". 
OJ L 90, 30.3.2007, p.58. 

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ITER  construction  mainly  consists  of  major  systems  and  components  for  ITER  procured  by 
F4E and provided "in kind" to the ITER Organization as well as cash provided to IO.  

The Commission represents Euratom, as one of the 7 Members of the ITER Organization, in 
the ITER Council and its subsidiary bodies. It also represents Euratom in the F4E Governing 
Board and provides more than 80% of the F4E resources. 

The construction of ITER is technically extremely challenging in its scale and complexity. It 
will represent a major engineering undertaking on the scale of the construction of a very large 
commercial power plant with large-scale industrial contributions in civil, mechanical, electrical 
and nuclear engineering combined in unprecedented conditions. It is foreseen that about three 
quarters of the overall EU contribution to ITER will result in contracts with the European high- 
tech  industry.  The  timely  fulfilment  of  these  contracts  will  involve  the  transfer  to  European 
industry  of  major  fusion  specific  technologies  and  know-how  built  up  over  50  years  in  the 
European fusion programme. As experience has shown, large scale application of leading-edge 
technologies in scientific infrastructures stimulates innovation and increases competitiveness of 
European high-tech industries throughout the construction period well before the project starts 
yielding its scientific results. This project should also contribute to encouraging talented young 
scientists and engineers to develop their careers in Europe. 

The launch of the ITER project marked an important milestone in the development of world-
wide big science  collaboration.  For Europe  the project  is emblematic  of the EU's capacity to 
take  a  leading  role  at  the  global  level  in  science  and  technology.  The  ITER  Organization 
presents  a  possible  model  for  future  large  scale  international  collaborative  infrastructure 
projects.  

2  THE CURRENT CONTEXT  

The  Member  States  have  been  following  work  on  ITER  through  their  representation  in  the 
Governing Board of F4E. The EU Council was informed in late 20087 that the estimated costs 
for ITER construction would be much higher than the initial estimates of 2001, on the basis of 
which  the  international  ITER  agreement  of  November  2006  had  been  negotiated.  The  most 
important  factors  responsible  for  the  increases  of  the  cost  estimates  were  summarized  as 
follows: 

− 

the need for additional and more complex technical components to increase assurance 
of ITER success [not foreseen in 2001 with the level of knowledge at that stage]; 

−  escalation  of  the  materials  and  construction  costs  much  faster  than  average  inflation 

− 

− 

rates; 
increased  complexity  of  project  integration  in  managing  interfaces  across  7  Parties 
[rather than the 3 Parties foreseen in 2001]; 
the effort needed to ensure sufficient design specifications of the ITER components to 
initiate  tender  action  for  industry  [In  2001  the  design  was  generic;  and  not  detailed 
enough for tenders]; 

−  2001 cost estimates that are now seen to have been rough and tight.  

7 

Note  from  the  Commission  on  ITER  status  for  the  Competitiveness  Council  of  1-2  December  2008. 
16451/08 – RECH 394 – ATO 119. 

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−  higher  resources  than  foreseen  for  inspection  and  testing  to  comply  with  the  Quality 
Assurance  requirements  for  a  nuclear  installation  and  the  millions  of  parts  to  be 
assembled; 
the start-up costs of establishing autonomous organisations from scratch. 

− 

Since  the  end  of  2008,  the  Commission  has  kept  the  Council  of  the  EU  closely  informed  on 
any development in this respect. The European Parliament has also expressed its interest in the 
project on various occasions.  

On  29  May  2009,  the  Commission  presented  to  the  Council  a  summary  of  the  status  of  the 
ITER  project,  the  challenges  faced  and  the  actions  taken.  The  Commission  also  set  out  a 
number of boundary conditions that it considers pre-requisite to be met in order to ensure the 
success of the project at acceptable cost and reasonable risks. These conditions include credible 
cost  assessment  and  cost  containment  policies,  realistic  timetable  and  sound  management  of 
the project at all levels.  

At  its  meeting  of  16  November  20098,  the  Council  confirmed  its  unanimous  support  to  the 
ITER project, understanding that the construction cost of ITER would be substantially higher 
than  initially  planned,  and  "provided  that  the  boundary  conditions  elaborated  by  the 
Commission in the end can be met". 

The Council also concluded that the "Baseline", which refers to the inter-related elements of 
scope (specifications of the machine to build), schedule (time table for construction) and cost 
for  ITER,  must  build  upon  a  scenario  providing  the  optimal  conditions  for  the  project  by 
integrating  the  above-mentioned  boundary  conditions.  It  called  for  action  to  be  taken  on 
necessary management changes, and a strong policy to be applied on cost reduction and cost 
containment.  In  addition,  the  Council  invited  the  Commission  to  explore  possibilities  for 
providing the increased funding needed. 

Today, for our international partners in ITER, the critical step for the project is to agree on the 
Baseline  which  is  an  item  to  be  decided  upon  at  the  next  meeting  of  the  ITER  Council 
currently scheduled for mid June in China. The adoption of the Baseline by the ITER Council 
would enable the ITER Organization, its Members and their Domestic Agencies, to develop a 
coherent and credible basis for the construction of ITER.  

The  adoption  of  the  Baseline  had  been  targeted  for  the  fifth  ITER  Council  meeting  in 
November 2009 but it was not achieved. The Commission delegation, following the political 
direction of the EU Council, made clear that the boundary conditions were not respected and so 
declined  to  adopt  the  proposed  schedule.  Euratom,  the  main  contributor  to  the  project,  was 
isolated in taking this position. In the run up to the currently schedule June 2010 ITER Council 
when  the  final  agreement  is  expected  on  the  Baseline,  Euratom  has  already  delayed  this 
decision.  

8 

Documents 15815/09 RECH 401 ATO 136 + ADD 1 RESTREINT UE. 

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3 

ITER COST 

3.1  Framework of the ITER Agreement 

Through the international ITER Agreement, Euratom has taken the major responsibility for the 
construction phase of the project. During this phase Euratom contributes 5/11 (around 45%) of 
the total, of which 80% is funded from Euratom and 20% from France, the rest being equally 
divided among the other 6 ITER Parties (1/11 or around ~9% each)9.  

During  the  operation  and  deactivation  phases,  Euratom  will  contribute  to  34%  of  the  total 
costs. 

Table 1: ITER project cost breakdown and sharing10: 

ITER Agreement Total Value of the ITER Project and EU Share for the various Phases of the Project

Construction
(10 Years)

In-kind
Cash
Total

Operation
(20 Years)

Operation costs

Fund for 
decommisioning

De-Activation
(5 Years)

Total

TOTAL

Total Values

MEuros
 [2001 value]

3,282
1,790
5,073

4,847

530

281

10,730

Cost Sharing

EU share

EU

45.46%
45.46%
45.46%

other 
Parties 
each

9.09%
9.09%
9.09%

34.00%

13.00%

34.00%

13.00%

34.00%

13.00%

MEuros
 [2001 value]

MEuros
 [2008 value]

1,492
814
2,306

1,648

180

96

4,230

1,735
945
2,680

1,915

209

111

4,916

In 2001 the ITER Parties (then EU, Japan and Russia) provided cost estimates of the project on 
the  basis  of  technical  specifications  prepared  by  the  ITER  design  team  at  that  time.  These 
estimates provided the basis for the ITER Parties to make their decisions on the scope of their 
involvement  in  implementing  ITER11  and  serve  as  a  basis  for  the  conclusion  of  the  ITER 
Agreement in November 2006. 

3.2 

Initial estimates for the Euratom contribution to ITER construction (based on 2001 

estimates) 

Due  to  the  specific  nature  of  the  Agreement,  Euratom,  as  every  other  Party,  committed  to 
provide  the  agreed  contributions  in  kind  independently  of  the  final  cost  of  procuring  and 
delivering those components. The final cost of each ITER component to be delivered in kind 

9 

10 

11 

Cost Sharing for all Phases of the ITER Project. Attachment 2(b) to the Final Report on Negotiations on 
the ITER Joint Implementation, 1 April 2006 
This table derives from the attachments to the ITER Agreement: "Final Report of Negotiations on ITER 
Joint Implementation, 1 April 2006 Attachment 2_A", and "Final Report of Negotiations on ITER Joint 
Implementation, 1 April 2006 Attachment 2_B". 
Common Understanding on Procurement Allocation, Attachment 2(c) to the Final Report of Negotiations 
on ITER Joint Implementation, 1 April 2006. 

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will be known only when the procurement process is completed and the components accepted 
by the ITER Organization. 

According to the 2001 estimates, the Euratom contribution, amounted to EUR 2680 million (in 
2008 value), corresponding to EUR 1 735 million for the components/systems to be provided 
“in  kind”  ,  and  EUR  945  million  to  be  provided  "in  cash"  to  the  ITER  Organization.  These 
2001  estimates  for  the  Euratom  contribution  exclude  F4E  other  activities12  and  its  running 
costs, as F4E was established late 2007. 

3.3  Revision of the estimates for the Euratom contribution 

The original estimates for Euratom contributions have evolved since the original calculations in 
2001 to take account of the latest updated estimates from 2008 and 2009: 

−  of  the  revised  actual  costs  to  Euratom  of  meeting  its  obligations  for  contributions  in 
kind,  which  were  assessed  during  2008  by  an  Ad-Hoc  Group  to  the  F4E  Governing 
Board chaired by R. Toschi13.On average, more than half of the differences between the 
2001 estimate and the 2008 one could be attributed to so-called internal factors (specific 
to  the  project)  mainly  linked  to  evolution  of  the  project  e.g.  (i)  design  changes;  (ii) 
assessment of technologies; (iii) Quality Assurance. The rest of the difference is due to 
external factors that would affect any similar construction project such as increases of 
the real cost of raw materials and labour. For one of the major components, the ITER 
buildings, an independent assessment was carried out by a group of experts nominated 
by the Member States and by the Commission. The outcome of this assessment is fully 
in  line  with  the  costing  exercise  made  by  the  Toschi  group  and  a  civil  engineering 
consultancy contracted by the ITER Organization14.  

−  of  the  IO  revised  costs  related  to  the  design  and  the  management  resources  needed, 
which were assessed by an international experts panel set up by the ITER Council and 
chaired by F. Briscoe15. 

and to include the costs of operation and other activities of F4E following its establishment in 
2007 which were not foreseen in the 2001 cost estimates. 

3.4  Current estimates of Euratom contributions during the ITER construction period 

The  initial  period  estimated  for  the  construction  of  ITER  was  of  10  years.  The  schedule 
currently used as a working  basis  aims  at  starting the operation phase with a First Plasma in 
November 2019. Because the first operation will take place without all the equipments installed 
in ITER, the operation phase will then overlap with the completion of the construction phase. 
For  the  purpose  of  budget  planning,  the  ITER  construction  could  be  considered  to  extend  to 
2020, as all the major investments are expected to be completed by that time. 

12 

13 

14 

15 

"Other  activities",  according  to  the  tasks  of  the  Joint  Undertaking  as  per  ref.Error!  Bookmark  not 
defined.,  refer  to  the  ITER  Test  Blanket  Programme,  the  implementation  of  the  Broader  Approach 
agreement with Japan and to the activities in preparation for the construction of a demonstration fusion 
reactor. 
Report from the Ad Hoc Group on the Cost of the EU In-kind Contributions to ITER. ref F4E(08)-GB08-
07. 8th meeting of the F4E Governing Board of 4th December 2008. 
Report  on  the  independent  assessment  of  ITER  buildings  cost  estimates  dated  17.December.2009  and 
transmitted to the Member States on 20 January 2010. 
Assessment  of  resource  estimates  for  ITER  construction,  5th  meeting  of  the  ITER  Council  18-19 
November 2009. Record of decisions, attachment 8 appendix C. 

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The current cost estimates updated by F4E according to the proposed schedule and presented to 
the  F4E  Governing  Board  in  March  201016  amount  to  EUR  7 253  million  (in  2008  value), 
subject to possible modification upon adoption of the Baseline (scope, schedule, cost). These 
current  estimates  comprise:  EUR  6.6  billion  (6603  million  in  2008  value  that  would  require 
EUR  5 282  million  of  funding  from  Euratom  and  EUR  1 321  million  from  France)  for  the 
contribution  to  ITER  construction  and  EUR  650  million  for  the  F4E  running  costs  and  other 
activities.  The  resulting  overall  contribution  required  from  Euratom  would  be  of  EUR  5.9 
billion  (EUR  5 892  million)17.  A  comparative  evolution  of  the  cost  estimates  is  presented  in 
Table 2 and related Figure 2 here after. 

16 
17 

F4E(10)-GB15-08-RESTRICTED -F4E Governing Board meeting of 30-31 March 2010. 
To  this  contribution  about  EUR  40  million  should  be  added,  which  come  from  the  F4E  members 
(EURATOM, 27 Member States and Switzerland) other than EURATOM and France. 

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Table  2:  Evolution  of  estimates  of  ITER  related  costs  from  2001  estimates  to  updated 
estimates  

EU contribution to  ITER 
construction
(in M€ 2008 value *)

Overall F4E budget 
during the ITER 
construction period 2010 
update
(in M€ 2008 value*)

As agreed in 2006 
on the basis of 
2001 cost estimate

2010 update

F4E running 
costs and other 
activities

650

Breakdown contributions to 
the overall F4E budget
during the ITER construction 
period 
2010 update
(in M€ 2008 value*)

Euratom

France

total

2145

536

2680

5282

1321

6603

ITER

6603

Euratom 5892

France

1321

F4E other members**

40

* These estimates do not include inflation from 2008 onwards.

** The F4E members (Euratom, 27 Member States and Switzerland) other than Euratom and France make contributions not 
exceeding 10% of the annual resources required for the administration of the Joint Undertaking (a total of about EUR 40 
million for the ITER construction period, 2007-2020)

Total

7253

Total

7253

Figure 2: Graphical representation of the Table 2  

(all M€ 2008 value)

EU contribution to ITER construction

Agreed in 2006 on 
Agreed in 2006 on 
the basis of 
the basis of 
2001 cost estimate
2001 cost estimate

2010 update
2010 update

EU contribution to the overall F4E budget
(for ITER and other related activities during 
the ITER construction period)

2010 update
2010 update

F4E
F4E
running costs 
running costs 
and other activities
and other activities
650
650

Total
Total
2680
2680
of which
of which
In-kind: 1735
In-kind: 1735
Cash to IO: 945
Cash to IO: 945

Euratom
Euratom
(80%)
(80%)
2145
2145

French
French
contribution
contribution
(20%)
(20%)
536
536

Euratom
Euratom
(80%)
(80%)
5282
5282

Total
Total
6603
6603
of which
of which
In-kind:  5128
In-kind:  5128
Cash to IO: 1475
Cash to IO: 1475

French
French
contribution
contribution
(20%)
(20%)
1321
1321

Total
Total
7253
7253

ITER
ITER
Construction
Construction
6603
6603

Euratom
Euratom
5892
5892

French
French
contribution
contribution
1321
1321

F4E other
F4E other
members 
members 
contribution
contribution
40
40

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Indicative profiles for cost estimates and Euratom's contribution during the ITER construction 
period 

The  estimate  of  Euratom's  share  of  the  F4E  resources  (including  F4E  running  costs  but 
excluding the contribution from France) throughout the whole construction period (2007-2020) 
of about EUR 5.9 billion (in 2008 value) is broken down as follows: 

−  For 2007-2011 (5 years) the estimated financial needs are about EUR 1.3 billion; 
−  For 2012-2013 (2 years) the estimated financial needs are about EUR 2 billion; 
−  For 2014-2020 (7 years) the estimated financial needs are about EUR 2.6 billion. 

A profile of the original and updated estimates of Fusion for Energy needs and the Euratom's 
share total contribution to ITER (including F4E running costs and other activities but excluding 
the French contribution to ITER construction) is presented in Figure 2 here under: 

Figure  3:  F4E  total  indicative  resource  estimate  (2008  value)  during  the  ITER 
construction period. 

1400

1200

1000

800

600

400

200

>
-
-

M

0

Updated Estimate Total
(Euratom & France)

Original*  Estimate Total
(Euratom & France)

Updated Estimate
Euratom contribution
(without France)

Original* Estimate
Euratom contribution
(without France)

Year -->

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

*The original estimate in this graph includes the Euratom contribution to ITER construction based on 2001 assessment and the 
resources projected  for the running cost of F4E and other activities as included in the 2007 Council decision establishing F4E

The peak in the resources needed in the years from 2012 to 2015 is linked to the start in 2012 
of  the  major  construction  activities  on  site  and  the  launch  of  the  series  production  of  many 
components that will follow the fabrication of prototypes. 

3.5  The gap between the initial and the updated cost estimates 

The initial cost estimate of the Euratom contribution for the ITER construction (to be provided 
by Euratom and France), based on the 2001 assessment, was of EUR 2.7 billion (in 2008 value 
and excluding F4E running costs and other activities). 

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€
 
 
As the updated total F4E cost estimates including the contribution to the ITER construction and 
the F4E running costs and other activities are of about EUR 7.2 billion (in 2008 value) for the 
period of ITER construction (2007-2020), more than a doubling of the Euratom contribution to 
ITER construction is required compared to the initial estimates (see Table 2).  

Thus,  there  is  a  substantial  gap  between  the  initial  and  the  current  updated  overall  estimates 
that needs to be considered in order to take decisions about the future of the project.  

The cost estimates of the project are continually being improved and refined as is the case for 
large-scale  and  long-term  infrastructures/research  projects.  Uncertainties  around  the  current 
cost  estimates  for  the  early  period  of  the  construction  phase  have  been  significantly  reduced 
mainly due to the advancement on the designs and the assessments made by industry.  

However,  beyond  that  early  period  of  construction,  it  cannot  be  excluded  that  further  cost 
increases will emerge in the future through the later parts of the construction and the operation 
phases  of  the  project  (e.g.  during  the  process  of  assembling  the  many  thousands  of 
components, coming from the 7 different parts of the world). 

A  strong  policy  for  cost  containments  already  initiated  both  at  the  level  of  the  ITER 
Organization and of F4E will have to be vigorously pursued in order to control and mitigate as 
much as possible further escalation of costs. 

The gap between the programmed expenditure for 2012 and 2013 and the estimated needs 

The current instrument for funding of ITER is the Seventh Framework Programme (FP7) of the 
European  Atomic  Energy  Community  (Euratom)  for  nuclear  research  and  training  activities 
(2007  to  2011)18..  The  provisions  in  the  Multiannual  Financial  Framework  (2007-2013), 
covering the Euratom FP7 and programmed expenditure for 2012 and 2013, were made taking 
into account the initial cost estimate, and the need for establishing the Domestic Agency, F4E. 

Some  EUR  2.1  billion  (in  current  value)19  of  commitment  appropriations  from  the  Euratom 
Budget would be needed for the years 2012-2013 in order to commit the procurements needed 
early in the construction process. Considering the programmed appropriations available for this 
purpose in the current Multiannual Financial Framework (EUR 346 million for 2012 and EUR 
344 million for 2013 in current value), Euratom is facing an estimated deficit on commitment 
appropriations of about EUR 1.4 billion (in current value) for the years 2012-2013 (EUR 550 
million in 2012 and EUR 850 million in 2013) in addition to the contribution from France, in 
order to honour the Euratom obligations under the ITER Agreement.  

18 
19 

OJ L 460, 30.12.2006. 
While  cost  estimates  for  ITER  construction  have  been  done  in  EUR  2008  value,  to  allow  immediate 
comparison  with  existing  ceilings  in  the  budget  instruments,  the  need  for  2012-2013  are  presented  in 
EUR current value. 

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Table 3: gap in the resources needed 

in million Euro (current valueError! 
Bookmark not defined.) 

2012 

2013 

TOTAL 

F4E 

A- 
appropriations from Euratom FP7 budget  

projection 

commitment 

on 

ca. 900 

ca. 1200 

ca. 2100 

B-  Indicative  amount  available  for  the  new 
Euratom  FP7  budget  contribution  to  ITER 
(row A in table 1) 

ca. 350 

ca. 350 

ca. 700 

Additional  commitment  appropriations 
required for Euratom (A – B)  

ca. 550 

ca. 850 

ca. 1400 

4  MEETING THE BOUNDARY CONDITIONS, STATE OF PLAY. 

Good progress is being made in meeting the boundary conditions that the Commission believes 
necessary to ensure the success of the project at acceptable cost and reasonable risks.  

4.1  Cost estimates  

In view of the scale of variations indicated, as well as the uncertainty of the revised estimates 
for  the  IO  and  for  F4E,  each  of  these  bodies  has  been  subjected  to  independent  expert 
assessment (see footnotes 14 and 15). Significant progress has been achieved on the assessment 
of  the  cost  estimates  for  ITER  construction,  which  are  the  best  estimates  attainable.  This  is 
mainly due to the increase in the level of maturity of the design of the machine which allows 
decreasing the ranges of uncertainty and to the development and implementation by IO of more 
rigorous and transparent costing methodologies. 

Those  estimates  are  not  foreseen  to  undergo  material  variations  in  the  short  term.  Given  the 
scale and nature of an undertaking such as ITER at the edge of global scientific and technical 
knowledge, cost estimates and the management of cost evolution will be subject to an agreed 
range of cost containment measures to minimise the risk of unforeseen cost overruns.  

4.2  Cost containment policies 

As  from  2008,  when  IO  and  F4E  entered  into  the  implementation  phase  of  the  ITER 
construction,  and  in  face  of  the  high  technical  pressure  giving  rise  to  increasing  costs,  cost 
containment policies and measures have been pursued with the highest priority by the IO and 
F4E and feature as regular items on the agendas of their governing bodies.  

Focusing mainly on the design of the ITER machine and its integration, the ITER Organization 
has been directed to pursue measures to optimize cost, reduce risk and simplify interfaces. A 
range of measures are being pursued in this sense, including: 

−  value engineering studies for the overall design20,  

20 

Value engineering is a systematic method to improve the "value" of goods or products and services by 
using an examination of function. 

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−  rationalising the allocation of procurement obligations,  
−  agreeing standards and  
−  exploiting economies of scale.  

The ITER Council has encouraged further activities along the lines presented and charged the 
ITER  management  to  make  quantified  assessments  of  their  effects  to  be  monitored.  In  this 
regard, the European Commission would encourage an active and transparent monitoring of an 
agreed  list  of  cost  containment  measures  to  be  approved  by  the  ITER  Council  and  to  be 
reported on annually or as soon as significant cost escalations arise. 

At  EU  level,  the  F4E  Governing  Board  on  30-31  March  2010  discussed  the  efforts  made  on 
cost  containment  for  the  EU  in-kind  contribution  and  found  that  F4E  is  engaged  on  several 
fronts in a wide range of technical, contractual and industrial measures that aim to reduce risks 
and contain costs. These measures include: 

−  procurement strategies 
−  value engineering for the procurements 
−  contractual  and  industrial  measures  including  active  promotion  of  competition  and 

adapting the provisions of F4E contracts. 

These  measures  will  be  complemented  by  analyses  of  the  recently  awarded  tenders  which 
should allow F4E to identify trends and to further refine its strategy. 

Euratom  and  other  Members  of  the  F4E  Governing  Board  shall  receive  a  report  setting  out 
progress  on  these  measures  annually  or  in  real  time  when  there  is  a  risk  of  significant  cost 
escalation. 

4.3  Realistic timetable for the ITER construction 

The schedule of construction leading to an operational phase by the end of 2018, as proposed 
by IO in September 2009, was found to be too risky and costly, in particular for Europe which 
has  the  responsibility  for  providing  major  components  early  in  the  construction.  On  these 
grounds  and  in  accordance  with  the  conclusions  of  the  EU  Council,  Europe  opposed  the 
adoption of this schedule at the last ITER Council of November 2009. This triggered criticism 
from the other ITER Members. 

Since November 2009, the IO and the Domestic Agencies of the Parties have been working on 
a revised and more realistic schedule, seeking, where possible, to accelerate schedules to meet 
demanding delivery dates and to mitigate risks. After intense work of F4E in consultation with 
IO, industry and other Domestic Agencies, it appears that the current proposed schedule, under 
which  the  operational  phase  would  be  attained  in  early  November  2019,  appears  to  be 
technically credible and achievable, and in line with delivery dates that the Parties assess to be 
realistically achievable, provided that the risk mitigation approaches are successful.  

4.4  Sound management of the project at all levels  

−  Management of the European contribution to ITER 

A  management  assessment  of  F4E,  conducted  in  the  second  half  of  2009,  concluded  that 
radical changes were needed to the organisation and culture of the agency to put it in a position 
to fulfil Europe's obligation to ITER. Early January 2010, the Director of F4E resigned and a 
new  Director  has  been  appointed  ad  interim.  He  is  restructuring  F4E  in  light  of  the 
management assessment report. All efforts will also be made to review the functioning of F4E 

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governance  in  ensuring  cost  containment  and  most  efficient  use  of  resources  and  the 
monitoring of F4E activities by the Commission will be reinforced. 

−  Management of IO 

The  ITER  Council  of  June  2009  established  a  Management  Assessment  of  IO.  The  report, 
delivered to the last ITER Council (November 2009), stated that changes were needed of both 
the top management and the organizational structure.  

The ITER Parties reached in February 2010 a common understanding concerning changing the 
top management of IO. The agreed steps are now being taken with the view to formalising top 
management change at the ITER Council in June 2010.   

EN 

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