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

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Summary
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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.

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ECAS Project Status
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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
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.)

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New Division in Safeguards
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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.

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Finance and Budget Status
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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.

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Friends of SAL
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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