Russia will start building the first reactor at the nuclear power plant in Bushehr, Iran, this year, Atomic Energy Minister Yevgeny Adamov told Interfax. The reactor of VVER-1000 type will be part of the plant’s first generating unit. "The unit, whose construction cost is estimated at $800 million, is between 30 and 40 percent completed," said Adamov.

"The ministry will be negotiating a deal with Teheran to build a second unit in Bushehr in 1999," Adamov added.

Construction of the Bushehr nuclear power plant’s first unit started back in the seventies with assistance from German Siemens. In 1979, due to the revolution in Iran, Germany had to wind up the project. In the early nineties, Iran applied to Russia with a request to complete the plant. The contract on completion of the first unit was signed in 1995. However, the actual works at the construction site began only three months ago when the two parties reached understanding on various disagreements over the project.

The plant is to be run by a Russian-Iranian team, which the Russian Atomic Energy Ministry will begin forming this year and which will be complete by 2000 or 2001. Today 1,000 Russians are employed on the construction site in Bushehr, but the number will increase in 1999, said Adamov. Russia has previously said it hoped to complete the first unit in May 2003.

Both the U.S. and Israel have voiced their concern over the project, fearing it will help Iran to develop nuclear weapons. Russia and Iran responded by claiming they would expand the nuclear co-operation. The two countries have agreed to prepare technical documentation for three additional reactors of the VVER-640 type, said Russian Atomic Energy officials in November last year.