IAEA/SAFEGUARDS ANALYTICAL LABORATORY: SECOND

UNCLAS UNVIE VIENNA 000567 SENSITIVE SIPDIS IO/T DETEMPLE, ISN/MNSA COCKERHAM; NA-243 GOOREVICH; NA-241 SIEMON, O'CONNOR, LAMONTAGNE; AFTAC FOR CHARLES BRENNAN E.O. 12958: N/A TAGS: AORC KNNP IAEA ENRG TRGY SUBJECT: IAEA/SAFEGUARDS ANALYTICAL LABORATORY: SECOND WORKSHOP ON LABORATORY UPGRADES REF: UNVIE 373 -------------- Summary -------------- ¶1. (SBU) The IAEA hosted on December 7 a successful second workshop on the Agency's upgrades to its Safeguards Analytical Laboratories (SAL). The Clean Laboratory Extension (CLE) is fully funded and should be completed by the end of 2010. This extension will house the Japanese-funded Large Geometry Secondary Ion Mass Spectrometer (LG-SIMS),requested by the IAEA to improve its capability in analyzing environmental samples. The second, larger project is the construction of a new Nuclear Material Laboratory (NML),which is currently in the planning stages. Due in large part to U.S. voluntary funding of USD 5.5 million, the architectural and engineering design work is funded through the end of 2010. The IAEA is developing a Site Development Master Plan intended to consider needed changes to the SAL complex such as roads, drainage, security fencing, etc., arising from the planned expansions to SAL. At the same time the IAEA is looking to construct a new NML, the Agency is seeking to expand the Network of Analytical Laboratories (NWAL),comprised of member state labs, to serve as a back-up capability to the NML which currently analyzes 100-percent of the Agency's nuclear material samples (there are currently five candidate U.S. labs). The NWAL is also needed to provide additional analytical services (specialized analyses, Quality Assurance, and reference materials) and to provide backup services in the event the current laboratory has a major failure. ¶2. (SBU) The Agency has received extra-budgetary funding from the U.S., Japan, Spain, South Korea, and the Czech Republic totaling some USD 15.3 million (Euros 10.5 million). Since the Workshop, the German Mission informally notified the Secretariat that Germany may contribute USD 7.4 million (5 million Euros) for SAL pending a final decision in Berlin. End Summary. -------------- ECAS Project Status -------------- ¶3. (SBU) The IAEA hosted a second workshop to update member states on the status of the Enhancing Capabilities of the Safeguards Analytical Services (ECAS) project on December 7. (The first workshop, reported reftel, took place on July �00A;29-30.) Representatives from approximately 19 member states attended. DDG Safeguards Olli Heinonen opened the meeting, noting the importance of ECAS and thanking member states for their support. Heinonen stressed the importance of getting this project right, and said he therefore valued these workshops and encouraged member states to provide feedback to the Agency while it is in the planning stages. Following Heinonen, project managers for CLE, NML, NWAL expansion, and the Site Development Master Plan provided updates. ¶4. (SBU) CLEAN LAB EXTENSION (CLE): The CLE will house a Japanese-funded LG-SIMS, which has been ordered at a cost of USD 5.3 million (reported as 3.6 million Euros). The IAEA expects building completion and delivery of the LG-SIMS in December 2010. Michio Hosoya is the project manager for the CLE. (Comment: While Hosoya is titular head of the project, his project management skills are weak. Heinonen relies heavily on U.S.-funded consultant Dave Swindle to track the project and maintain its forward momentum. End comment.) ¶5. (SBU) NUCLEAR MATERIAL LAB (NML): Construction of the new NML is currently in the planning stages and will be the largest construction project the Agency has ever attempted. After designs are complete, construction is estimated to begin in mid-2011. Design work is funded through the end of 2010 due in large part to the U.S. contribution of USD 5.5 million, although construction of the NML is currently unfunded. The IAEA is reviewing consultants' recommendations on the missions for the new lab, including possible new equipment that would be needed in the new NML. In addition, the IAEA is preparing for maintenance-related work to keep the current NML operational until the new laboratory is complete (in approximately 2013). A portion of the maintenance work is already planned and budgeted, but funds for 2012 and 2013 are yet to be identified. Chris Schmitzer is the project manager for the NML. (Comment: Analogous to the situation of the CLE project, Schmitzer and the IAEA are not sufficiently competent in project management to implement the NML effort on their own. Heinonen and others in the Secretariat recognize that the Agency will need to hire a project manager for the duration of the project in order to shepherd the effort effectively. The proposed project management structure would be two-tiered, with the day-to-day project/contract management falling to a project management team headed by the outside consultant and a design planning team headed by Schmitzer. Both the planning and project management teams will report to an IAEA project management board headed by DDG Heinonen. End Comment.) ¶6. (SBU) NWAL EXPANSION: The Agency, in response to member state urging, is seeking to expand the Network of Analytical Laboratories (NWAL) to ensure a backup capability exists in the case of catastrophic failure of the existing NML. At present, the NML handles all/all of the Agency's nuclear material samples for safeguards purposes (with the exceptions that heavy water samples are sent to a lab in Hungary, and about 20 uranium samples per year sent to the NWAL for trace impurities analysis). Currently SAL analyzes about 100 plutonium samples, 100 input/high activity waste samples, and 600 uranium samples per year. The IAEA is looking to the European Commission, France, Japan, Czech Republic, UK, and the U.S. to qualify laboratories for nuclear material analysis by 2012. The admittedly ambitious plan of qualifying 12 laboratories by 2012 is meant to ensure at least some labs are qualified by this date. Andy Hamilton is heading up this project, and he stated that the member state support programs will be important in making this successful. In addition, Hamilton said that Brazil, China, and South Korea have offered to qualify nuclear material labs, but the Agency has stated its preference for China and Brazil to first finish the qualification process for the environmental sample analysis laboratories that they began over five years ago. Expansion of the NWAL will add approximately USD 175,000 in extra analysis costs for the sampling regime per year, based on the assumption that member states continue to subsidize the actual cost of the analyses. ¶7. (SBU) SITE DEVELOPMENT MASTER PLAN: Stephen Giwa from the IAEA's Division of General Services (MTGS) described the Secretariat's effort to develop a Site Development Master Plan for Seibersdorf in light of the prospective CLE expansion and new NML. The perimeter fence at SAL ran out of funding after completion of only three sides (funded by Department of Energy's Second Lind of Defense (SLD) program). Giwa admitted the funding needs are not yet concrete for the site development plan. Member states asked for clarity on this as soon as possible. (Comment: The quality of Giwa's presentation strongly implied that the Agency has a lot of work remaining to pull together a comprehensive site development plan and determine final costs. End comment.) -------------- New Division in Safeguards -------------- ¶8. (SBU) The Secretariat is finalizing plans for SAL to become a division in the Department of Safeguards early next year, a move that will place SAL under direct management of its customers in the Safeguards Department. The new division will be called Safeguards Analytic Services (SGAS) and will be headed by Gabi Voigt, the current Director of the IAEA Seibersdorf Laboratories (including SAL). DDG Safeguards Heinonen and Voigt have briefed Director General Amano on SAL and will further specify organization plans when Amano visits SAL on December 18. Amano's staff have emphasized to us that he supports the reorganization in principle but wants to be sure he has a complete understanding of the managerial implications. Fifty-seven staff will move to the Safeguards Department from the Department of Nuclear Science and Applications with this change. -------------- Finance and Budget Status -------------- ¶9. (SBU) The IAEA currently estimates it will need approximately USD 62.36 million dollars (reported by the IAEA as 42,241,758 Euros),of which USD 39 million (reported by the IAEA as 26,476,973 Euros) remains unfunded. (Comment: Based on detailed observation from U.S. consultant Dave Swindle and others, it is almost certain funding needs will increase significantly above these IAEA estimates, as the Agency formulates a specific design for the NML. The cost estimate will become more credible as that design is developed starting early next year. End comment.) The Agency has received extra-budgetary funding from the U.S., Japan, Spain, South Korea, and the Czech Republic. Since the Workshop, the German Mission has informally notified the Secretariat that Germany may contribute USD 7.4 million (5 million Euros) to SAL pending final decision by Berlin. France is leading an effort in the EU it hopes will come to fruition with a contribution of between 5 and 10 million Euros. ¶10. (SBU) Foreshadowing the coming budget debate -- even with traditionally like-minded member states -- Switzerland asked during the Workshop whether the Secretariat would again have access to rollover funds out of the operational budget over the next few years, as it did with the 3 million Euros from ¶2009. DDG Heinonen responded that 2009 was an exceptional circumstance based on a delay in major safeguards programs mainly in Japan and would not likely occur again. Head of Program and Budget Carlo Reitano discussed the need, therefore, for major capital investment funding. -------------- Friends of SAL -------------- ¶11. (SBU) Stephane Baude from the French Mission, chair of the informal "Friends of SAL" group, led a session of the Workshop in which he opened up the floor to member states, encouraged additional follow-up actions from this workshop, and sought other feedback. Argentina suggested that advance information on the SAL projects are needed as its mission does not have the requisite technical experts and therefore is less able to participate during the sessions without such advance information. Japan, which was unhappy with its exclusion during the IAEA's first consultant experts meeting on the NML, asked the IAEA to keep the board members informed. U.S. participants signaled strong support for SAL and for the Secretariat's strides toward creating and describing to member states a credible and appropriate plan for the CLE and new NML, but requested further clarity on the costs as soon as possible. ¶12. (SBU) Baude recommended the next Workshop take place in about six months, circa May 2010, and recommended the Secretariat release a GOV/INF at that time updating board members on the status. DDG Heinonen closed the meeting by reminding member states that the lab is for the member states and not the IAEA, therefore the member states need to weigh in on the process, a process for which he promised transparency. Heinonen said that the IAEA will take additional measures to keep the member states informed, as this is a project of unprecedented size and importance for the Agency and requires significant funding. In this context, Heinonen said he believed a paper submitted to the March Board (instead of May/June) might be appropriate. ¶13. (SBU) Comment: The "Friends of SAL" Workshops are now firmly established as a means for Secretariat/member state engagement on addressing SAL's vital safeguards function. While the CLE and NML projects are now on a trajectory for success, project management and funding will still require (quiet but persistent) U.S. leadership. Funding SAL will be the most significant new budget requirement for the coming 2011 budget discussions, and the Euro 10-15 million requirements for the 2011 capital budget will be a major source of acrimony in the coming debate. Mission looks forward to working closely with Washington on budget tactics that ensure the new NML will be funded as appropriate with the right mix of extra-budgetary and regular budget funds, the latter of which should help firmly establish the Agency's new Major Capital Investment Fund. End comment. DAVIES