VZCZCXYZ0000
OO RUEHWEB

DE RUEHUNV #0567/01 3500911
ZNR UUUUU ZZH
O 160911Z DEC 09
FM USMISSION UNVIE VIENNA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0422
RHEBAAA/DOE WASHDC IMMEDIATE
INFO RUEHII/VIENNA IAEA POSTS COLLECTIVE IMMEDIATE
RHMFIUU/HQ AFTAC PATRICK AFB FL IMMEDIATE

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. 
 
------------------- 
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 
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