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. Last Updated: 07/27/2016

Duma to Study Nuclear Sector Bill

Itar-TassState Duma Speaker Boris Gryzlov, center, and Kiriyenko, right, at the future site of a Leningrad region power plant.
Government control over the nuclear weapons and power sector will increase if the State Duma approves a bill to create a state nuclear energy corporation, which is set to receive its first reading Thursday.

The head of the corporation, who would be appointed directly by the president, would have the powers to issue binding orders to directors of civil and defense enterprises making up the body.

Federal Atomic Energy Agency spokesman Sergei Novikov said Wednesday that the reform would improve oversight over civil contracts and defense spending. The agency at present only has powers to issue recommendations.

In his state-of-the-nation address in April, President Vladimir Putin called for the formation of a state nuclear corporation. The Duma, with its pro-Kremlin majority, is likely to pass the bill, which was submitted by the president last week. The changes would come as Russia plans to dramatically increase nuclear power generation and target every possible foreign market.

Although a number of industrial state corporations have been created lately, the nuclear body will be the first that replaces an existing government entity -- the Federal Atomic Energy Agency headed by Sergei Kiriyenko.

In what would add efficiency, the new corporation would actually own nuclear energy and defense companies, taking them over from the Economic Development and Trade Ministry's Federal Property Management Agency, Novikov said.

The Federal Atomic Energy Agency's role to date has been to formulate state policy in the industry and to ensure compliance, Novikov said. The agency can also appoint and remove company directors, he said. But the agency does not currently have control over the day-to-day business of these companies, Novikov said.

"They draw money from the budget and do whatever they want," Novikov said by telephone. "Directors may or may not listen ... There's no leverage over them in tactical terms."

Bulat Nigmatulin, who was deputy chief of the Federal Atomic Energy Agency from 2002 to 2006, agreed with Novikov that the bill would streamline the executive chain of command by making company directors take direct orders from the head of the corporation.

Federal Atomic Energy Agency head Sergei Kiriyenko indicated that the corporation could force some companies to operate on leaner budgets. Elemash, a plant in the Moscow region that produces nuclear fuel, stands on a land plot 100 times larger than what a similar plant would occupy in Europe, he told reporters last month.

The corporation would run civil assets in all stages of power generation, including uranium enrichment, construction of nuclear plants and their operation under one company. The combined company would be able to present a more solid challenge to international majors, he said.

Operating nuclear companies under the umbrella of a single corporation will expedite the government's plan to build 26 reactors by 2020, said Anton Khlopkov, executive director of the Center for Policy Studies in Russia, a specialist on the nuclear industry.

The corporation would also run companies that produce and develop nuclear weapons, oversee the dismantling of nuclear submarines and ensure safety in the defense and civil sectors.

Khlopkov also said the military probably did not require its existing reserve of nuclear plants, some of which the corporation could convert into civil enterprises.