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OO RUEHBI
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O 241258Z JUL 08
FM USMISSION UNVIE VIENNA
TO RHEBAAA/DOE WASHDC IMMEDIATE
RUEHC/SECSTATE WASHDC IMMEDIATE 8247
INFO RUCNNSG/NUCLEAR SUPPLIERS GROUP IMMEDIATE
RUEHII/VIENNA IAEA POSTS COLLECTIVE IMMEDIATE
RUEHNE/AMEMBASSY NEW DELHI IMMEDIATE 0268
RUEHBI/AMCONSUL MUMBAI IMMEDIATE 0052

C O N F I D E N T I A L SECTION 01 OF 02 UNVIE VIENNA 000417 
 
SIPDIS 
 
STATE FOR P, T, ISN, IO, SCA 
DOE FOR NA-24 - SCHEINMAN; NA-243 GOORVICH 
 
E.O. 12958: DECL: 07/24/2018 
TAGS: ENRG IAEA KNNP MNUC PARM TRGY ETTC IN
SUBJECT: IAEA SHARES COST ESTIMATE FOR INDIA SAFEGUARDS 
IMPLEMENTATION 
 
Classified By: CLASSIFIED BY CHARGE D'AFFAIRES GEOFFREY R. PYATT, 
FOR REASONS 1.4 (b) AND (d) 
 
¶1. (C) Summary: The IAEA Secretariat has shared with us on a 
confidential basis their estimates for the near term costs of 
implementing safeguards in India as part of the US-India 
nuclear deal, which could total Euro 19 million by 2016. 
Speaking with DCM on July 23, Deputy Director General 
Heinonen emphasized that he was committed to keeping this 
figure out of the August 1 debate over the India agreement, 
and was sharing the cost estimates with only a handful of 
IAEA officials for now.  Nonetheless, he said, Director 
General El Baradei wanted to be sure the US was aware of the 
IAEA's implementation estimate. Previewing the IAEA's July 25 
technical briefing, Heinonen said the Secretariat would stick 
to the point that India's agreement meets all the safeguards 
standards.  Aside from Pakistan, he does not expect 
opposition within the board.  End Summary. 
 
¶2.  (C) DDG Heinonen asked to see DCM July 23 in order to 
talk through IAEA plans for implementing expanded safeguards 
in India.  Heinonen explained that the IAEA has prepared a 
cost estimate based on India's previously published 
separation plan, but pushing the date of full implementation 
back to 2016 (vice 2014, which is the Indian government 
continues to use).  The safeguards department has estimated a 
cost of Euro 6.5 million for additional equipment (mainly 
core discharge monitors and surveillance) required at the 8 
PHWR's that India will declare under its separation plan. 
The balance of Euro 12.5 million would pay for inspections 
and implementation related travel.  Beyond 2016, the IAEA 
estimates an additional cost of Euro 2.4 million per year (at 
2007 prices) for ongoing safeguards monitoring in India. 
 
¶3. (C) A major uncertainty that could affect the final cost, 
Heinonen noted, is the disposition of India's existing spent 
fuel inventories.  Because the Department of Atomic Energy 
has been unwilling to engage on the technical substance of 
safeguards implementation, the IAEA does not know whether 
India intends to declare its spent fuel inventories at the 
civilian sites, or will move that material elsewhere.  Also, 
since the IAEA only has access for now to the old RAPS sites, 
the inspectors are uncertain how design changes in India's 
PHWRs might affect the cost of cabling and conduit (since 
some of these cables reach into the reactors' core area, 
access ducts must be constructed carefully, adding to the 
cost). 
 
¶4. (C) Heinonen underlined that he did not want these cost 
issues to spill over into the August 1 board decision on the 
India safeguards agreement, and as a result the information 
was being tightly held within the IAEA Secretariat.  For now, 
the Secretariat will stick to the figure of Euro 1.2 million 
cited as the first year cost for one new reactor.  If the 
separation plan that India eventually notifies to the IAEA 
ends earlier, that will reduce the full implementation cost, 
but only marginally. 
 
¶5. (C) Heinonen was confident that the IAEA would be prepared 
to take on a significantly expanded safeguards responsibility 
in India even if implementation begins as early as 2009. 
Since much of the IAEA's monitoring equipment is custom made 
and comes from a small group of vendors, hardware will be an 
issue.  To move forward quickly Heinonen proposed to employ 
monitoring equipment originally procured for the Busher 
reactor in Iran, which is now running behind schedule.  This 
inventory would then be replaced as the expanded IAEA budget 
for India comes on line.  In response to a question about the 
potential utility of the US safeguards support program, 
Heinonen emphasized that Director General El Baradei was 
committed to paying for India safeguards from the regular 
IAEA budget, since this is a core IAEA activity that should 
be funded the same way as other safeguards programs.  He 
noted in this context that the IAEA budget to be approved at 
the September General Conference contains a specific line 
item for India activities. 
 
¶6. (C) Previewing the IAEA's July 25 technical briefing, 
Heinonen said the Secretariat would stick to the point that 
India's agreement meets all the safeguards standards.  The 
briefers will explain the status of the India preamble, walk 
through a comparison of the operational provisions vis-a-vis 
other agreements, and address any legal questions.  Aside 
from Pakistan, he does not expect opposition within the Board 
of Governors. 
 
UNVIE VIEN 00000417  002 OF 002 
 
 
 
¶7. (C) Comment: With both US Presidential candidates calling 
for substantial increases in the IAEA budget, Heinonen and 
others around the Secretariat are thinking expansively about 
their future operations.  Since Heinonen provided this India 
estimate at the request of DG El Baradei, we suspect it was 
intended also to influence our approach to the simultaneous 
debate in Vienna over future funding for the IAEA's Technical 
Cooperation activities. End comment. 
PYATT