MOSCOW - By many measures, the high-tech, state-controlled company called Atomstroyexport is a shining example of Russia's progress toward capitalism. It has won overseas orders worth billions of dollars and is seeking new business that would employ tens of thousands of highly skilled workers.
But Atomstroyexport - from the words for Atomic Construction Export - is also a source of growing concern for the Bush administration, which is pressuring Russian President Vladimir V. Putin to halt the company's work on a nuclear power plant in Iran.
About 600 Atomstroyexport workers recently began assembling the reactor and turbine-generator for the Bushehr nuclear power plant in the Iranian city of Halileh, on the coast of the Persian Gulf.
The Bush administration, and many Russians, fear that Iran will use the $840 million, 1,000-megawatt reactor to produce the highly enriched uranium or plutonium necessary for nuclear weapons.
Officials at Atomstroyexport, which serves as the marketing arm of Russia's atomic energy ministry, Minatom, insist that the design of the reactor and an agreement for Russia to acquire the power plant's used fuel render the project harmless.
Minatom has also proposed five more reactors in Iran over the next decade, for $6 billion to $10 billion.
"Russia in principle is not interested in the proliferation of nuclear weapons," Viktor V. Kozlov, general director of Atomstroyexport, said an interview this week. " ... Russia is cooperating in the construction of the power plant here because it is absolutely sure that that is not the situation."
U.S. officials have described the power plant as the most divisive issue in Russian-American relations. U.S. Undersecretary of State John Bolton, who arrived here yesterday, is expected to raise it again in his talks with Russian officials.
U.S. Energy Secretary Spencer Abraham, in remarks last month, summarized the administration's skepticism: "We have long been concerned that Iran's only interest in nuclear civil power, given its vast domestic energy resources, is to support its nuclear weapons program."
Threat to U.S., Russia
Many Russians share these concerns.
"The construction of the nuclear unit is the preliminary stage which is obligatory for the future nuclear program, which will result in Iran obtaining the technology of making nuclear weapons," Maxim Shingarkin, a former colonel in Russia's strategic weapons program, said.
Highly enriched uranium and plutonium are inevitably produced in the uranium used as nuclear fuel in reactors. Minatom officials say their design minimizes the quantities being produced, reducing the risk that Bushehr will help Iran develop nuclear weapons.
Robert Norris, a nuclear expert with the Natural Resources Defense Council in Washington, agreed yesterday that the Russian reactor design produces less plutonium than some others. But he said the reactors can still be used to produce such material. "You haven't eliminated the problem," he said. "You've lessened it somewhat."
Minatom pledges to take custody of the Bushehr's used fuel and either alter it or dispose of it, so the Iranians can't reprocess it - chemically refine the metal to yield the small amounts of plutonium and enriched uranium it will contain.
Control of the spent fuel is the critical consideration, Norris said. If Iran is intent on building nuclear weapons and obtains used nuclear fuel, reprocessing it "is well within the capability of Iranian scientists."
But critics here wonder what will happen if the Iranians ignore the agreements for spent fuel.
"After four years, Iran will have enough plutonium for 10 bombs," said Shingarkin, who now works for the environmental group Greenpeace.
Iranian officials note that Iran is a signatory of the Nuclear Non-Proliferation Treaty, by which it pledges not to acquire nuclear weapons. Gholam Reza Shafei, Iran's ambassador to Russia, told reporters in February, "There is nothing about production of nuclear weapons in the agreement signed between Russia and Iran on use of the atom for peaceful purposes."
Radzhab Safarov, director of Russia's Iranian Studies Center in Moscow, said he assumed Iran was seeking nuclear weapons, in part because of the presence of nuclear powers in the region, including Israel and Pakistan, and the presumed nuclear weapons program of Iraq.
"I don't know for sure, but I can suppose that it would be reasonable and logical under the circumstances that the country would deal with its security properly," Safarov said. "And security in modern times is provided by powerful weapons."
Other Russian officials fear that Iran could export nuclear technology and weapons to Islamic rebels in the former Soviet states of Uzbekistan, Tajikistan and Kyrgyzstan. Muslim separatists are also fighting Russian rule in Chechnya.
"Iran has not abandoned the idea of exporting the Islamic revolution," said Sergei S. Mitrokhin, a member of the Yabloko faction in Russia's parliament. "Nuclear weapons in the hands of Iran will be a huge threat to Russia. And it will be a bigger threat for Russia than for the United States."
Minatom inherited control of Russia's nuclear weapons and its aging nuclear power plants in 1992. It is a vast agency with about 300 institutes and production facilities, and more than a million people live in cities built around Minatom plants. Some of those cities remain off-limits to foreigners.
"Minatom is a state inside a state, which has its own budget, its own cities and of course its own foreign policy," Mitrokhin said.
Minatom, along with other Russian bureaucracies, has been accused of pervasive corruption. The state Accounting Chamber reported in January that $270 million in U.S. and European aid earmarked for improving the storage sites for radioactive waste had vanished.
The Bushehr nuclear project, begun 30 years ago for the former shah by the German firm Siemens, was 85 percent complete when the Islamic revolution swept Iran in 1979. During the Iran-Iraq war, in the 1980s, the site was repeatedly bombed by Iraq.
After the war, Iran decided to complete at least one reactor there. When Western countries declined to help, Iran in 1995 turned to Minatom.
Alexei Yablokov, then environmental adviser to President Boris N. Yeltsin, learned that secret parts of the contract between Minatom and Iran called for construction of facilities specifically designed to produce material suitable for nuclear weapons.
When Yablokov told Yeltsin about those provisions, Yeltsin canceled the contract. But Yablokov has said he fears that Minatom continued to help Iran acquire weapons technology.
Yablokov, now a member of a presidential commission for monitoring radioactive materials, is convinced that Iran's goals haven't changed. "Iran is still seeking to have access to nuclear weapons," he said.
Asked why an oil-rich state would need nuclear power, Kozlov replied with soothing equanimity, "Nuclear power in the future will be very important for all countries. Yes, Iran has fuel. Maybe enough for today, but who knows about tomorrow?"
He noted that, a decade ago, Minatom planned to build a nuclear power station in North Korea, but Washington intervened by citing the danger that the regime would use material and technology from the power plant to build nuclear weapons.
"And we stopped," Kozlov said. The Clinton administration, along with Japan and South Korea, then promised to provide North Korea with two reactors, in exchange for North Korea promising to suspend its weapons development. The Bush White House has stuck with that plan.
"I think that if we leave Iran, after five or 10 years the United States will build a nuclear power station in Iran, or some other competitor will," Kozlov said.
In a recent opinion piece in The Boston Globe, Rep. Edward J. Markey, a Massachusetts Democrat, conceded the point. "As long as the United States is engaged in a deal that would hand over two nuclear reactors to North Korea," he wrote, "why isn't it appropriate for the Russians to engage in a similar deal with Iran?" He called for cancellation of both projects.
Under U.S. pressure, Ukraine scrapped a $45 million deal to supply turbines to Bushehr four years ago. But analysts here say Washington never made good on its promises of new investment to make up for the loss.
Kozlov dismissed accusations that Minatom was not answerable to the government. "Our activities are completely under state control," he said. "We were able to start negotiations with Iran only after the state signed an intergovernmental agreement. We have no right to do anything without permission."
Russia is building five nuclear power-generating reactors, two each in China and India as well as the one in Iran.