Fukushima, What Crisis? Russia’s Rosatom’s Banner Year

Russian state-run Rosatom, has had a successful year, despite worldwide concerns about nuclear energy following the 11 March nuclear disaster at the Fukushima Diachi nuclear power plant.
 
Rosatom's massive nuclear empire includes the otkrytnoe aktsionernoe obshchestvo "Atomnyi energopromyshlennyi kompleks" Atomenergoprom, a 100 percent state-owned holding company that oversees Russia's civil nuclear industry, nuclear weapons companies, research institutes and nuclear and radiation safety agencies as well as representing the Russian Federation globally on issues of the peaceful use of nuclear energy and nonproliferation as well as managing Russia's fleet of nuclear icebreakers through FGUP Atomflot.
 
Rosatom has just released its 2010 annual report on its website, and notes that the company reported total sales last year of $15.9 billion, up 9 percent compared with 2009, due to sales of electricity, and sales of supplies by OAO Tekhsnabeksport, which trades uranium fuel and fuel processing services abroad
 
Techsnabexport's fuel subsidiary OAO TVEL and Russian nuclear vendor Zakrytoe aktsionernoe obshchestvo Atomstroieksport both posted drops in sales compared with 2009 because of ongoing construction projects. Despite that, overall things are going so well for Rosatom that its supervisory board, flush with cash, is considering that by the end of the year or in 2012 issuing new shares to cover Atomstroeeksport's losses.
 
However, Fukushima did have an impact on Rosatom's activities. According to Leonid Gusev, Moscow State Institute of International Relations Analytical Center senior scientific associate, "We must speak of the accident at the Fukushima NPP in Japan, which generated a certain fear in many countries in connection with continued application of nuclear power plants. This particularly affected part of the European states, as for example Germany, which rejected the use of nuclear power. But I think that this fear will be short-lived, and that in the future it will be leveled out by the need to build new nuclear power plants because no alternative equivalent to production of nuclear power has yet been found."
 
In any case, Rosatom's exports book are brimming with foreign orders. While in 2010 Rosatom signed contracts for the construction of 12 foreign nuclear power plants, in 2011 an additional 21 contracts were signed, despite global anxieties over Fukushima. 
There is a slight cloud on Rosatom's sunny horizon, however, glowing more than Fukushima's #4 reactor core. On 19 December Russian Prime Minister Vladimir Putin said at the meeting of the governmental commission on the electrical power sector in the Khakasia republic, in south-central Siberia that he was "very disappointed" by corruption uncovered at electric energy companies in the country and expressed surprise at the compensation of some of the sector's executives, telling his audience, "We need to bring order here." During a long peroration Putin put the handwriting on the wall, adding that he was requesting government agencies to do a thorough review of state companies to check for corruption and their offshore activities, remarking, "I request the Energy Ministry, the Economic Development Ministry, industry agencies within two months to check companies with a government stake such as Gazprom, Vneshekonombank, and it wouldn't hurt Sberbank either. I request infrastructure companies with state involvement - Gazprom, Transneft, Russian Railways, Sovcomflot, Vneshekonombank, Vneshtorgbank, Rosatom - to report on adopted measures."

In case anyone doubted his intentions Putin continued, "Unquestionably, this should be done together with law enforcement bodies. I hope law enforcement bodies will make relevant decisions where direct breaches of law are apparent, and where a conflict of interest is apparent we must adopt personnel decisions as fast as possible and think of advancing the regulatory groundwork."
 
Since the Soviet era Rosatom has been run virtually as a state within a state, accountable to no one. If Putin's "law enforcement bodies" follow through with their auditing efforts, then it seems likely that a number of Rosatom and subsidiary executives and apparatchiks will be spending some time in sunny Siberia, perhaps alongside Mikhail Khodorkovskii, despite the company's brimming order books.
 
After all, it's one thing to be a capitalist "biznesman" oligarch in Russia, quite another thing to steal from the state. In dealing with Khodorkovskii Putin made his views quite clear on the business activities of the former - now state employees of Russia's energy sector may feel the wrath of Vladimir Vladimirovich, likely to be Russia's next president - again.
 
And his government auditors and tax police - just ask Segezha FBU IR-7 penal colony's most famous prisoner, Mikhail Khodorkovskii.

By. John C.K. Daly of Oilprice.com