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Summative Evaluation of the Nuclear Powered Submarine Dismantlement Program

(March 2007)

(PDF Version, 302 KB) *

Table of Contents


Executive Summary

Introduction

Changes in the international security situation following the Cold War period left Russia with a legacy of almost two hundred decommissioned nuclear powered submarines (NPS) in need of immediate dismantling. The stockpiles of nuclear and other radioactive materials, both on the nuclear submarines and at the shipyards pose a considerable threat in terms of theft, proliferation and sabotage in addition to being a substantial threat to the fragile ecosystem of the Arctic. Russia requested international assistance to deal with this problem. In the early 1990s, the United States (US) played an instrumental role in funding the dismantlement of submarines and missile launchers and improving infrastructure at the shipyards under the Cooperative Threat Reduction (CTR) program.

At the 2002 G8 Summit in Kananaskis, all G8 countries made a commitment to support Russia in the process of nuclear submarine dismantlement under the Global Partnership (GP). Following the Kananaskis Summit, Canada initiated its Nuclear Powered Submarine Dismantlement (NPSD) program under the auspices of the Global Partnership Program (GPP) within the Department of Foreign Affairs and International Trade (DFAIT)'s IGX bureau. Within the first phase of the NPSD program, an initial commitment of $120 million was made to dismantle 12 submarines of the Northern Fleet.

The NPSD program is governed by the Canada-Russia Bilateral Treaty signed in 2004. Annual Implementing Arrangements (IA) detail the terms and conditions of the work to be done by the shipyard, including identifying the submarines to be dismantled.

In addition, in March 2004, Canada contributed $32M to the European Bank for Reconstruction and Development (EBRD) Northern Dimension Environmental Partnership (NDEP) Support Fund.

There are three high level objectives of the summative evaluation: to assess the relevance, efficiency and effectiveness of the activities undertaken in Implementing Arrangements #1 and 2 to inform the preparation of the remaining and potential future Implementing Arrangements; to assess the achievement of the results of IAs #1 and 2 and to determine the program's actual impact on, and importance to, the Russian beneficiaries; and to present a basis for funding decisions related to the second phase of the Global Partnership Program.

Methodology

The evaluation was based on multiple lines of evidence and was conducted in three phases: Project Initiation; Data Collection; and Analysis and Report Writing. Key informants were interviewed from a range of stakeholders and site visits to Moscow and the Zvezdochka shipyard were conducted.

Even though this evaluation is focussed on Implementing Arrangements #1 and 2, it is recognized that there is ongoing activity under Implementing Arrangements #3 and 4. These activities have been considered where appropriate since this is a summative evaluation. It is also noted that an assessment of the EBRD contribution was excluded from this evaluation based on a decision by the Evaluation Division (ZIE) to evaluate all IGX contributions to multilateral organizations at a later date.

Summary of the Issues, Findings and Conclusions

Relevance

  • Funding the defuelling and dismantlement of decommissioned nuclear submarines through the NPSD program remains relevant because it continues to meet the needs of the Russian partner. In 2002, there were 36 submarines in Northern Russia in need of dismantlement and a larger number in the Far East. In the 2004 Strategic Master Plan, as well as at the G8 summits, Russia has continued to stress that dismantling the submarines is a high priority and has requested international assistance to deal with this problem. The Canadian commitment to fund the dismantlement of 12 submarines in North West Russia represents a third of the submarines in the region in 2002 and is a significant contribution towards meeting the Russian needs.
  • The NPSD program is consistent with Government of Canada priorities as demonstrated by the announcement at the G8 summit in St. Petersburg. It also contributes toward two of the five strategic priorities outlined in DFAIT's Report on Plans and Priorities 2006-2007.
  • The NPSD program is responsive to both anti-terrorism and environmental safety goals of the Global Partnership. Funding the defuelling and dismantlement of the submarines addresses the threat of sabotage and the risk of theft of highly enriched uranium, that if acquired by terrorists, could be used towards developing a nuclear warhead. Removing, treating and storing the radiological and hazardous materials from the submarines helps prevent a potential environmental disaster from occurring in the Arctic.

Program Governance and Delivery

  • There are a number of key features of the program governance and management structure that contribute to the achievement of results, including: the project takes place on a bilateral basis; all dismantlement activity is conducted at the Zvezdochka shipyard; Implementing Arrangements are negotiated annually; the skills and experience of the IGX team reflect project requirements; experienced technical experts are involved; there is continuous oversight; and risk assessments are completed and consulted.
  • As with other streams in the GPP, IGX senior management intentionally designed the program with a small departmental team that is supported by external technical experts. The IGX team has excellent negotiating skills, project management and IT experience, and even nuclear submarine experience. However, many of the skills and experience reside in one individual, leaving the program vulnerable to staff changes.
  • Technical personnel on the support team have experience working on submarine dismantlement activity at Russian shipyards as well as experience on nuclear submarines in the US and British navies. Not only does this experience elevate the credibility of the teams with the shipyard management and the Russian partner, Rosatom, it helps to facilitate communication because the stakeholders "talk the same language."
  • Monthly monitoring visits and annual Implementing Arrangement negotiations assist in building a rapport and mutual trust between the IGX teams and the shipyard personnel and improve the ability to mitigate risks. The structure of the Implementing Arrangements provide clarity for the shipyard as to tasks, milestones and payments. The monitoring visits provide discipline for the shipyard personnel to keep on schedule and allow the IGX teams to identify and mitigate risks.
  • All of the above features are appropriate to the context of working at the Zvezdochka shipyard. However, it is uncertain if this approach is replicable for a shipyard in the Far East. It is also unclear whether the success of this approach is dependent on the individuals involved.

Efficiency and Effectiveness

  • A number of factors contribute to overall efficiency and effectiveness: parallel negotiations of the bilateral treaty and Implementing Arrangement allowed a fast start; stakeholders have a flexible approach; economies of scale benefits are achieved by dismantling one class of submarine; all activities are concentrated at one shipyard; project management costs are minimized; and the fixed price contract in Canadian dollars eliminates financial risk for Canada.
  • Negotiating Implementing Arrangement #1 at the same time as the bilateral treaty negotiations were ongoing, as well as preparing the Treasury Board (TB) Submission and the environmental assessment allowed the NPSD program to maximize the available time in Phase 1 to be devoted towards achieving the results committed to TB and the Russian partner. This approach also sent a strong signal to the Russian partner that the Canadian program was serious about achieving results.
  • The mutual understanding and trust developed during negotiations and monitoring visits means that IGX does not have to micro-manage the shipyard whose managers have the flexibility to problem solve and not lose time waiting for direction from IGX. Depending on the circumstances, milestones can be shifted from one IA to another allowing the program to focus on achieving overall results.
  • Victor class submarines are the most cost-effective to dismantle because the reactor holds approximately the same number of fuel assemblies as that of a larger submarine, but the submarine's small size means there is less to dismantle. There is also less non-nuclear hazardous waste. By focusing on only one class of submarine, the shipyard has just one set of documents to prepare and has significantly increased the efficiency of personnel and streamlined processes.
  • Concentrating all activity at one shipyard minimizes project management costs by reducing travel costs and administrative overhead. By leveraging the experience of a former US CTR official with knowledge of costing at the Zvezdochka shipyard, Canada negotiated the lowest cost per submarine compared to any western country for IA #1. This cost became the benchmark for subsequent IAs. Moreover, remaining at one shipyard increases the stakeholders' familiarity with their respective roles, responsibilities and capabilities, thereby increasing the efficiency of negotiations and implementation of the IAs.
  • Indicators of the efficiency and effectiveness of the program include goals being met on time and under-budget.

Results / Success

  • Progress achieved during the first two Implementing Arrangements demonstrates that the program will meet results in accordance with TB commitments. Specifically, the program is on track to fund the defuelling of 12 submarines (seven defuelled under IAs #1 and 2) and to fund the dismantlement of 11 submarines (five fully dismantled and one partially dismantled under IAs #1 and 2). The 12th submarine will be a Typhoon class (the largest submarine in the Russian navy) that will be dismantled with funding from the US Cooperative Threat Reduction program and Russia.
  • As a result of working with the NPSD program, project management capacity at the Zvezdochka shipyard has increased through the introduction of Microsoft Project Management software by the IGX team. Shipyard managers now use this software for the Canadian project, as well for other international projects.
  • Canada is now seen as a leader on the subject of dismantling submarines in Russia. As a result of the success of the program, other countries seek Canada's advice on working with Russia on dismantling submarines.
  • The shipyard has benefitted from the Canadian program in other areas, particularly in worker safety and the environment. The NPSD program has increased awareness; provided funding for equipment and infrastructure; and arranged for training of shipyard personnel in Canada.
  • Another indicator of the success of the program is the high degree of satisfaction of the Russian partner and shipyard officials. The speed of program implementation, the technical expertise of the IGX and monitoring teams, the comprehensive, yet flexible Implementing Arrangements, the concern for, and financial commitment to, worker safety and the environment, and the professional approach taken by the Canadian team are considered key success factors for the program. Both the Russian partner and shipyard management suggested cooperating with IGX on future projects.
  • Providing the magnitude of the decommissioned nuclear submarine problem is similar in the Far East, there is justification to pursue Canadian involvement.

Environmental Impacts

  • The most important, positive impact of the Canadian program is the funding of submarine dismantlements as this eliminates the danger of the decommissioned, deteriorating submarines sinking and potentially leaking hazardous materials into the sea. There is no readily apparent evidence of environmental damage at the shipyard that could be attributable to the Canadian program.
  • The NPSD program funded the preparation of an Environmental Management Plan (EMP) and the project monitoring team assists in the achievement of targets in the EMP. In addition, the program funded the construction of an extension to the Harris Pad to include features to protect the environment and arranged for training of shipyard personnel in Canada related to environmental and waste management and safety. Environment-related projects are financed from the 5 per cent infrastructure fund.
  • Some environmental issues remain to be resolved, such as the treatment of hazardous substances at the drain pipes; disposal of hazardous materials at the local household facility; and repairs to the Yagri Island bridge. A recent announcement that Germany has agreed to finance the construction of a radioactive waste storage facility at Sayda Bay will largely resolve the hazardous waste storage issues facing the shipyard. The other environmental issues could be addressed with sufficient funding.

Lessons Learned

Based on interviews, document reviews and the site visit, the following lessons learned from Implementing Arrangements #1 and 2 were identified.

  • A strong NPSD program team provides credibility, increases efficiency and effectiveness, and facilitates understanding and communication;
  • Negotiating comprehensive annual Implementing Arrangements provides clarity, predictability and consistency and improves the achievement of results;
  • Monthly monitoring visits impose discipline, ensure milestones are achieved, build rapport and mutual trust, and assist in the identification of risks and mitigation strategies, particularly in the area of worker safety;
  • Maintaining an open, flexible and professional approach develops trust and leads to results;
  • Concentrating activity on one class of submarine and at one shipyard increases efficiency and effectiveness and minimizes project management costs;
  • Backing up concerns for worker safety and the environment with a financial commitment increases credibility, improves results, and reduces risks; and
  • Ensuring Implementing Arrangements meet mutual interests leads to cooperation and the achievement of results.

Recommendations

In light of the above conclusions and lessons learned, the following recommendations are made to the IGX project management team:

Recommendation 1: Continue the NPSD Program

It is recommended that the NPSD program complete Phase 1 by completing Implementing Arrangements #3 and 4 at the Zvezdochka shipyard and that IGX consider funding defuelling and dismantlement activities in the Far East given the ongoing need of the Russian partner and the relevance of the program to Government of Canada and Global Partnership priorities.

Recommendation 2: If IGX decides to continue the NPSD program in the Far East, it is suggested that IGX consider the following:

  • Address high risks at the beginning of the project where possible, (i.e., worker safety) and invest in measures to mitigate the risks;
  • Conduct worker safety training, provide equipment, and improve processes in the beginning stage of the program to minimize the risk of an accident occurring;
  • Request the temporary transfer of management personnel from the Zvezdochka shipyard to the Far East shipyard to assist in a smooth transition by allowing the transfer of knowledge between shipyard personnel to take place in a collaborative manner; and
  • Prepare, and then share with the Far East shipyard, documentation of best practices at Zvezdochka, including processes for negotiating the Implementing Arrangements, monitoring visits, safety measures and practices, environment practices, and reporting.

Recommendation 3: Implement the Lessons Learned from Implementing Arrangements #1 and 2

It is recommended that IGX implement to the extent possible, the following lessons learned from IAs #1 and 2:

  • Assemble IGX and support teams with strong technical expertise, project management and IT experience, experience working on submarine dismantlement activities at Russian shipyards, and experience onboard nuclear submarines;
  • Negotiate comprehensive annual Implementing Arrangements;
  • Conduct monthly monitoring visits;
  • Maintain an open, flexible and professional approach;
  • Concentrate activity on one class of submarine at one shipyard;
  • Back up concerns for worker safety and the environment with a financial commitment; and,
  • Ensure Implementing Arrangements meet mutual interests.

Recommendation 4: Strengthen IGX team by recruiting a senior Project Officer to provide back up to Senior Program Manager

It is recommended that IGX strengthen the NPSD program by recruiting a senior Project Officer with strong project management, IT experience and if possible, submarine experience to support the Senior Program Manager and ensure continuity in the event of a turnover.

Recommendation 5: Set aside funding for environment-related projects separate from the infrastructure projects

It is recommended that IGX designate a separate fund for environment-related projects so that they are not competing with infrastructure projects for funding. This is to ensure Canadian-funded dismantlement activity does not contribute to environmental damage at the shipyard. It is also suggested that IGX continue to work with the Zvezdochka shipyard during the remaining IAs to resolve the outstanding environmental issues.

Recommendation 6: Leverage the successful Canadian experience to attract other donors

It is recommended that IGX consider offering the services of the NPSD program to act as project managers on behalf of other G8 or non-G8 donors with respect to submarine dismantlement activity in Russia. Contributions from additional donors could be used towards the dismantlement of additional submarines or environment / infrastructure requirements at the shipyard.

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List Of Acronyms

CEAA
- Canadian Environmental Assessment Act
CEG
- Contact Experts Group
CRT
- Cooperative Threat Reduction
CU
- Compartment Unit
DFAIT
- epartment of Foreign Affairs and International Trade
EA
- Environmental Assessment
EBRD
- European Bank for Reconstruction and Development
EMP
- Environment Management Plan
EU
- European Union
FSUE
- Federal State Unitary Enterprise
GP
- Global Partnership
GPP
- Global Partnership Program
GPWG
- Global Partnership Working Group
HEU
- Highly Enriched Uranium
IA
- Implementing Arrangement 
IAEA
- International Atomic Energy Agency
IGX
- Global Partnership Bureau at DFAIT
ISO
- International Standards Organization
IT
- Information Technology
KBR
- Kellogg Brown & Root Services Inc.
MHLP
- Marine Heavy Lift Partners BV
MNEPR
- Multilateral Nuclear Environmental Program
NDEP
- Northern Dimension Environmental Partnership
NPS
- Nuclear Powered Submarine
NPSD
- Nuclear Powered Submarine Dismantlement
NSS
- Nuclear Safety Solutions
PPE
- Personal Protection Equipment
PWGSC
- Public Works and Government Services Canada
RBAF
- Risk Based Audit Framework
RPP
- Report on Plans and Priorities
SNF
- Spent Nuclear Fuel
START
- Strategic Arms Reduction Treaty
TB
- Treasury Board
UK
- United Kingdom
US
- United States
ZIE
- Evaluation Division at DFAIT

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1.0 Introduction And Context

1.1 Introduction

Changes in the international security situation following the Cold War period left Russia with a legacy of almost two hundred decommissioned nuclear powered submarines (NPS) in need of immediate dismantling. The stockpiles of nuclear and other radioactive materials, both on the nuclear submarines and at the shipyards pose a considerable threat in terms of theft, proliferation and sabotage in addition to being a substantial threat to the fragile ecosystem of the Arctic.

Status of the Russian Nuclear Submarine Fleet Post Cold War and Break-up of the Soviet Union:

  • 197 nuclear powered submarines decommissioned and waiting dismantlement (120 in the Northern Fleet and 77 in the Far East);
  • In 2002, 36 NPS with spent nuclear fuel (SNF) onboard in Northern Russia; and
  • Some vessels deteriorating, having difficulty staying afloat.

Although Russia had already started the process of defuelling and dismantling the submarines with assistance from the United States, it was evident that additional resources were urgently needed to address the problem at a faster pace and to secure the nuclear and radioactive material from the decommissioned vessels.

At the 2002 G8 Summit in Kananaskis, all G8 countries made a commitment to support Russia in the process of nuclear submarine dismantlement under the Global Partnership (GP).

1.2 Canadian Commitment

Following the Kananaskis Summit, Canada initiated its Nuclear Powered Submarine Dismantlement (NPSD) program under the auspices of the Global Partnership Program (GPP) within the Department of Foreign Affairs and International Trade (DFAIT)'s IGX bureau. The NPSD program included a commitment of up to $300 million for the dismantlement of Russian nuclear powered submarines (NPS) over the ten-year period of the GPP.

The GPP Priority Review held by IGX in 2006 reduced this total amount to $250M, in part because it was determined that the overall objectives could still be met by continuing to achieve efficiencies in project implementation.

Within the first phase of the NPSD program, an initial commitment of $120 million was made to dismantle 12 submarines of the Northern Fleet, at a rate of three per year over 43 months. Effectively, this time frame corresponds to the 2008 fiscal year end date of March 31, 2008 when the Treasury Board (TB) Submission approval expires.

Upon initiation of the program, the annual project expenditure was estimated at $27M to $31M per year, based on the estimated cost of approximately $8.0M to $9.5M to dismantle one submarine.

In negotiations with Rosatom, the Russian ministry responsible for the decommissioned nuclear submarine program, the Canadian government insisted on two conditions:

i) The NPSD program would fund the dismantlement of only one class of submarine, in particular the Victor class (Victor I, II, III); and

ii) The dismantlements must take place at only one shipyard, preferably the Federal State Unitary Enterprise (FSUE) Zvezdochka in the Arkhangelsk region.

IGX officials reported that the purpose of the conditions was to maximize economies of scale benefits and minimize project management costs. The benefits of these conditions will be discussed in greater detail in Section 5.0, Efficiency and Effectiveness.

The NPSD program is governed by the Canada-Russia Bilateral Treaty signed in 2004. Annual Implementing Arrangements (IA) detail the terms and conditions of the work to be done by the shipyard, including identifying the submarines to be dismantled.

In addition, in March 2004, Canada contributed $32M to the European Bank for Reconstruction and Development (EBRD) Northern Dimension Environmental Partnership (NDEP) Support Fund. This fund was established in 2002 by the EBRD to pool grant contributions for the improvement of the environment in North West Russia. Other contributors to the fund include the European Union (EU), Denmark, Finland, France, Germany, the Netherlands, Norway, Russia, Sweden and the United Kingdom (UK). Belgium has also donated to the fund.(1)

The Fund operates and develops projects in close coordination with Russian authorities and bilateral programs. All activities are undertaken under the Multilateral Nuclear Environmental Program (MNEPR) in the Russian Federation.

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2.0 Objectives And Context Of The Evaluation

A Formative Evaluation of the NPSD program had initially been scheduled as part of the 2005/06 Formative Evaluation of the Global Partnership Program with a separate Summative Evaluation scheduled for 2007/08. However, due to time constraints and the comparatively large scope of the 2006 Formative Evaluation, in-depth formative evaluations of the individual project streams were not conducted. With regard to the NPSD program, a decision was made that an in-depth evaluation would be conducted upon completion of Implementing Arrangement #2. ZIE's decision to proceed with a summative evaluation of this GPP program stream is substantiated by the similarity of the Implementing Arrangements guiding the dismantlement of decommissioned Russian nuclear submarines at the Zvezdochka shipyard.

2.1 Objectives

There are three high level objectives of the summative evaluation. First, an assessment of the relevance, efficiency and effectiveness of the activities undertaken under Implementing Arrangements #1 and 2 will provide valuable information supporting the design and conceptualization of the remaining and potential future Implementing Arrangements, including identifying gaps or a potential need for certain amendments.

In addition, the results from Canada's participation in the NPSD program, its actual impact on and importance to the Russian beneficiaries, will inform and guide IGX management in the decision-making process related to Canada's participation in future submarine dismantling activities.

Finally, the evaluation will present a basis for funding decisions related to the second phase of the Global Partnership Program.

The specific objectives of this evaluation are:

  1. To determine the extent to which the Nuclear Submarine Dismantlement Program is consistent with Canada's foreign policy objectives, how the program has developed since its inception to meet the needs of the Russian government and other stakeholders, and is an appropriate tool for meeting DFAIT's objectives related to reducing the threat from terrorist attacks and nuclear proliferation.
  2. To assess the effectiveness and efficiency of the program design, management and delivery approach and to determine lessons learned from the two Implementation Arrangements for future intervention in this area.
  3. To evaluate the results and achievements under Implementing Arrangements #1 and 2 and to identify lessons learned that can be reflected in future Implementing Arrangements.
  4. To estimate the overall environmental impact of the NPSD program and Canada's contribution to reducing the health, safety and environmental risks posed by the decommissioned nuclear submarines.

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3.0 Methodology

The evaluation was based on multiple lines of evidence and was conducted in three phases: Project Initiation; Data Collection; and Analysis and Report Writing.

3.1 Phase One: Project Initiation

This phase set the stage for the remainder of the evaluation through the development of the work plan; identification of key documents and files to be reviewed, as well as the key informants to be interviewed; and planning and preparation for the visit to Moscow and a site visit to the Zvezdochka shipyard to meet the Russian stakeholders.

3.2 Phase Two: Data Collection

In this phase, a large number of documents and files provided by IGX were reviewed. Additional reference material was also researched on the Internet by the evaluation team.

3.2.1 Key Informant Interviews and Site Visits

Semi-structured key informant interviews were held with a range of stakeholders, by telephone and in-person, as indicated in Exhibit A. IGX identified the key individuals to be interviewed and the evaluation team suggested additional key informants.

Exhibit A: Key Informant Interviews
StakeholderNumber of InterviewsMethod / Location
IGX3In-person (Ottawa)
Rosatom4In-person (Moscow)
Zvezdochka Shipyard14In-person (Zvezdochka)
Community3In-person (Zvezdochka)
Monitoring Team2In-person (Ottawa) - By phone
Other GPP Partners: United1By phone
Total:27 

* Interviewed for the Formative Evaluation of the Global Partnership Program.

In late October 2006, the evaluation team conducted a site visit to the Zvezdochka shipyard to meet with shipyard officials, community representatives, and monitoring team members. Interviews were conducted onsite. In addition, the team toured the shipyard to better understand the defuelling and dismantlement processes.

A trip to Moscow preceded the shipyard visit. In Moscow, the evaluation team interviewed officials from Rosatom, the Russian Ministry in charge of submarine dismantlement activity.

3.3 Phase Three: Analysis and Report Writing

In this phase, the evaluation team analyzed the project data and interview-based information in order to assess the degree to which the TB Submission commitments are being achieved and the evaluation objectives met. A PowerPoint presentation to DFAIT staff provided a summary of preliminary high level findings. It was followed by development of the draft and final reports.

3.4 Limitations

The large number of evaluation issues meant that not all issues were focussed on in-depth. Rather, the evaluation team focussed on issues of highest priority, particularly issues related to efficiency and effectiveness, governance, and results. Even though this evaluation is focussed on Implementing Arrangements #1 and 2, it is recognized that there is ongoing activity under Implementing Arrangements #3 and 4. These activities have been considered where appropriate since this is a summative evaluation.

It is noted that an assessment of the EBRD contribution was excluded from this evaluation based on a decision by ZIE to evaluate all IGX contributions to multilateral organizations at a later date. There were no sampling bias issues because there was only one site in question. None of the limitations invalidate the evaluation.

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4.0 Key Findings

4.1 Relevance

The evaluation considered the extent to which the program to fund the defuelling and dismantlement of decommissioned Russian nuclear submarines remains relevant, and in particular, the degree to which it responds to an actual and continuing need in Russia. In addition, the evaluation considered its consistency with federal government and DFAIT priorities.

Key informant interviews, document reviews, and the site visits provided evidence that the NPSD program remains relevant because there is an actual and ongoing need in Russia for international assistance to fund the dismantlement of decommissioned submarines; and it is consistent with Canadian government and DFAIT priorities.

4.1.1 The Russian Need for International Assistance

According to documentation,(2) the need to provide international assistance to dismantle nuclear powered submarines in Russia first came to light after the end of the Cold War. During the Cold War, the Soviet Union created the largest fleet of nuclear submarines in the world. In the mid-to-late 1980s, the Russian navy began decommissioning many of these submarines for various reasons: some were beyond their effective operational life of 20 years; some had been in accidents and were beyond repair; and others were decommissioned to meet commitments under arms reduction treaties such as the Strategic Arms Reduction Treaty (START). It is estimated that approximately 197 submarines were decommissioned.

It was not until 1986 that formal dismantlement procedures were developed and it was only in 1988 that safety precautions were added. In 1992, the procedure for the implementation of the submarine recycling program was established. During this time, the industrial infrastructure in Russia was unprepared for the level of activity required and Russia was facing economic decline due to reforms related to the break-up of the Former Soviet Union resulting in insufficient funding to dismantle the decommissioned submarines. In addition, Russia lacked the resources to adequately protect the nuclear materials on the vessels. The spent nuclear fuel (SNF) and radioactive wastes posed both environmental and proliferation threats.

To assist Russia in meeting its START targets, the US provided funding for the dismantlement of submarines as well as the elimination of submarine-launched ballistic missile launchers and submarine-launched ballistic missiles under the Cooperative Threat Reduction (CTR) program (to be discussed further in Section 4.1.2).

The Global Partnership, established at the Kananskis G8 Summit in 2002(3) reinforced that dismantling decommissioned nuclear powered submarines was a Russian priority that required international assistance.

As further evidence of the ongoing need, the Strategic Master Plan (SMP), Phase I(4) was issued in 2004 and further described the issues related to the Russian nuclear submarine legacy problem and documented the amount of international assistance required.

According to the Executive Summary of the Strategic Master Plan,(5) it was estimated that to complete the dismantling of the North West and Far East fleets by 2010-2012 would require a total investment of $4B (US). Considering the Russian Federation budget allocated to submarine dismantlement activity was approximately $70M (US) per year, the SMP Phase I document estimated that it could take several decades to address the issues related to the decommissioned submarines.

At the 2006 G8 Summit in St. Petersburg, the Russian Federation reaffirmed that the destruction of chemical weapons and dismantlement of decommissioned nuclear submarines were of "primary importance for the implementation of the GP projects in Russia."(6)

4.1.2 International Assistance

The CTR was established in 1991 by the Nunn-Lugar Act. It authorized the Department of Defense to fund assistance to the eligible states of the Former Soviet Union to dismantle and destroy weapons of mass destruction; to strengthen the security of nuclear weapons and fissile materials in connection with dismantlement; to prevent proliferation; and to help demilitarize the industrial and scientific infrastructure.

Through CTR assistance, the US is also helping Russia to accelerate strategic arms reduction efforts to meet START elimination levels earlier.

The international community has responded to the need outlined above. Starting in the early 1990s, the US provided assistance under the Cooperative Threat Reduction program. Under the CTR,(7) the US funded the dismantlement of 28 Russian nuclear submarines; and contributed to eliminating 420 submarine-launched ballistic missile launchers, and 543 submarine-launched ballistic missiles. In addition, the CTR program funded substantial investments in infrastructure and equipment at a number of shipyards, including Zvezdochka.

Exhibit B summarizes the assistance of a number of G8 countries towards the dismantlement of submarines and fuel-related activities under the GP as of July 2006.(8)

Exhibit B: Summary of International Assistance
Country:Assistance:
United Kingdom
  • Dismantled 2 Oscar class submarines;
  • Dismantled 1 Victor class submarine (joint with Norway);
  • Working with France on the remediation of the Gremikha naval base;
  • Working on a SNF storage facility at the Atomflot site, Murmansk; and
  • Working with Sweden and Norway on the rehabilitation of the temporary storage facility for SNF at Andreeva Bay.
Norway
  • Dismantled 3 Victor class submarines;
  • 1 Victor class submarine under dismantlement (with contribution from South Korea); and
  • Working with the UK and Sweden on the rehabilitation of the temporary storage facility for SNF at Andreeva Bay.
Italy
  • Dismantling one Yankee class nuclear powered submarine at FSUEP Nerpa.
Germany
  • Constructing a long-term storage facility for 150 reactor compartments at Sayda Bay; and
  • Constructing a regional solid radioactive waste facility for North West Russia at Sayda Bay.
Japan
  • Under the "Star of Hope" program in the Far East, committed to dismantle 5 submarines:
    • 1 submarine dismantled;
    • 1 submarine 50% dismantled; and
    • 4 submarines waiting dismantlement.
Sweden
  • Working with the UK and Norway on the rehabilitation of the temporary storage facility for SNF at Andreeva Bay.
France
  • Working on the remediation of the Gremikha naval base with the UK; and
  • Working on projects aimed at refitting the nuclear waste incinerator in the Zvezdochka shipyard.

4.1.3 Government of Canada Priorities

The NPSD program is consistent with Government of Canada and DFAIT priorities as demonstrated by its support of two DFAIT strategic priorities and by the statement made by the Prime Minister at the G8 Summit in July 2006 reaffirming the government's commitment to continue funding the dismantlement of nuclear submarines.

Supports DFAIT Strategic Priorities

According to the strategic priorities outlined in the Foreign Affairs component of DFAIT's Report on Plans and Priorities (RPP) 2006-2007,(9) two of the five priorities relate to the Global Partnership Program activities and by association, also to the NPSD program. These include: Strategic Priority 2: "A more secure world for Canada and Canadians, safer from the threats of failed and fragile states, terrorism, transnational crime and weapons of mass destruction;" and Strategic Priority 4: "Greater engagement with like-minded partners in the G8 as well as emerging economies such as Brazil, Russia, India and China."

Funding the dismantlement of decommissioned nuclear powered submarines under the NPSD program supports Strategic Priority 2 by addressing a possible terrorist threat. Several key informants noted there is a risk that terrorists could sabotage a nuclear powered submarine by blowing it up or by setting off explosives next to the submarine, causing an explosion. Interviewees explained that if a nuclear powered submarine exploded, it could have a significant "Chernobyl-like" impact. Some key informants noted that this was a remote risk, but feasible nonetheless, and that it must be considered seriously, particularly given the consequences.

Another terrorist threat is the risk of theft of highly enriched uranium (HEU) or other radioactive material from the NPS that could be sold on the black market for a nuclear warhead or a radiological dispersal device.(10)

The NPS are most vulnerable to this threat when they are docked at the navel bases, prior to being transported to the shipyard for dismantlement. This is because the submarines are not well-protected and typically have untrained crews on board. While at the naval base, a complete inventory of radioactive materials is not taken, therefore, there is an increased risk of theft of the material without adequate awareness by the authorities.

The risk of theft of HEU or other radioactive material is well-documented. For example, according to an article in The Nonproliferation Review in 2002,(11) in 1993, 4.5 kg of 20 per cent HEU was stolen from the Sevmorput shipyard (and later recovered). Several documents also report that over the last decade, there has been an increase in the illicit trafficking in fissile materials. An amount of HEU between 12-25 kg would be sufficient to develop a nuclear warhead. According to documents and key informants, the fuel assemblies in the submarines being dismantled under the NPSD program contain at least 90 per cent HEU, meaning it is weapons grade and can be weaponized.

The NPSD program addresses these threats by replacing the untrained crews on the submarines with trained civilian crews from the shipyard and by taking a detailed inventory of all materials. Once docked at the shipyard, key informants reported that physical security is in place to protect the submarine from sabotage. In addition, portal monitors at two gates are currently awaiting commissioning. Once active, these monitors will be able to detect the removal of any radioactive material.

Shipyard officials provided a detailed explanation of how the removal of the SNF assemblies is a carefully documented and monitored activity, undertaken by trained individuals in a secure environment. Once removed, the SNF assemblies are encased in concrete and stored in specially-designed flasks (known as TUK 108/TK 18). The evaluation team toured the off-shore defuelling facility, and observed the monitoring equipment and storage site during the site visit to the shipyard. Shipyard officials, program and monitoring team members stated that the shipment of the SNF to the Mayak storage facility is undertaken by Russian officials, under guard, shortly after removal and does not remain at the shipyard for an extensive period of time. Each of these tasks and the security precautions required are documented in the IA.

The NPSD supports Strategic Priority 4 through greater engagement with other G8 countries and Russia. Key informants noted that evidence of greater engagement is provided by the recognition of Canada's efforts given by the Russian Ambassador to the DFAIT Minister in 2006. In addition, senior shipyard officials stated that they have made presentations to the Russian Prime Minister and other senior officials from Rosatom, highlighting Canada's involvement in the submarine dismantlement program.

Key informants also reported that Canada is recognized in the G8 Working Group as a leader on submarine dismantlement in Russia. It was noted that several other G8 countries, including Italy, the UK and Japan, have sought Canada's advice on working with Russia on submarine dismantlement activities. Canada also closely consulted with the UK and the Netherlands during the successful transportation of two NPS (with their reactors fully fuelled) by heavy lift vessel from a naval base in Northern Russia to the Zvezdochka shipyard. This operation was a world's first.

Respondents also stated that Canada's example of successfully implementing the NPSD program has had two additional impacts on G8 and non-G8 countries. In one case, it has encouraged a country without a NPSD program to contribute additional funding to another country who is currently dismantling submarines in Russia. In the second case, other countries that had completed their NPSD programs, decided to fund the dismantlement of additional submarines beyond their initial commitments.

As further evidence of greater engagement with like-minded countries and Russia, Canada is also an active participant in the Contact Expert Group (CEG)(12) at the International Atomic Energy Agency (IAEA). In 2005, the Russian member of the CEG made a presentation on the cooperation between DFAIT and the Zvezdochka shipyard, outlining the progress made. Canada is also a representative on the EBRD NDEP committee because of its contribution to the fund. Representation in both of these multilateral organizations provides opportunities to increase Canada's visibility within a wider international community.

Reaffirmed by Prime Minister's G8 Statement

The Prime Minister's statement at the G8 Summit in 2006 reaffirmed Canada's commitment to funding the dismantlement of NPS in Northern Russia and provides additional evidence that the NPSD program is consistent with Government of Canada priorities.

The NPSD program directly contributes to Canada's G8 GP commitment on the dismantlement of submarines, but it also contributes to environmental safety. The Statement by G8 Leaders, released at the Kananaskis summit in 2002, also recognized projects that addressed "nuclear safety (including environmental) issues."(13) The environmental dangers posed by the deteriorating nuclear submarines are also well-documented. For example, the Strategic Master Plan, Phase I describes the concern about the release of radioactive substances into the Arctic aquatic environment from damaged submarines that may sink, or that have already sunk, such as submarine K-159 in 2003. These environmental issues are of concern to Canada, as well as many other circumpolar countries. Several key informants, particularly from the shipyard and community, expressed concerns about the potential environmental impacts of the deteriorating submarines.

4.2 Governance and Delivery Mechanisms

The evaluation addressed the following issues related to project governance and delivery mechanisms:

  • The degree to which the project design and management structure (including the roles and responsibilities of stakeholders and reporting mechanisms) contribute to the achievement of results;
  • The impact this project has had on other areas of interest to Canada; and,
  • The capacity building value of this project for Canada and IGX.

4.2.1 Project Design and Management Structure

There is evidence that the following elements of the project design and management structure contribute to the achievement of results: the project takes place on a bilateral basis; all dismantlement activity is conducted at one shipyard (Zvezdochka); Implementing Arrangements are negotiated annually; the skills and experience of the IGX team reflect project requirements; experienced technical experts are involved; there is continuous oversight; and risk assessments are completed and consulted.

NPSD Program Conducted Bilaterally

The NPSD program is governed by the Canada-Russia Bilateral Treaty, signed in 2004. Under this Treaty, IGX senior management negotiate annual Implementing Arrangements directly with the shipyard senior management.

Exhibit C illustrates the relationships between the key stakeholders and beneficiaries and briefly summarizes their roles and responsibilities. As demonstrated in this exhibit, the NPSD program is conducted on a bilateral basis between IGX as the funding donor and Rosatom as the Russian Federation (RF) representative and beneficiary. Rosatom determines which submarines will be provided for the Canadian program. Key informants reported this bilateral relationship contributes to the success of the program because of the ability to work directly with decision-makers, both at Rosatom and at the shipyard, in a collaborative manner.

Exhibit C: Key Stakeholders and Beneficiaries

Exhibit C: Key Stakeholders and Beneficiaries
All Dismantlement Activity Takes Place at Zvezdochka

IGX representatives reported that when designing the NPSD program, Canada insisted that all dismantlement activity take place at one shipyard, and preferably the FSUE Zvezdochka shipyard. Located in the Arkhangelsk region of northern Russia, management of Zvezdochka have over 12 years experience working with western countries, particularly with the US under the CTR program and the shipyard has advanced infrastructure, including a modern offshore defuelling facility and Harris Shears. In addition, the shipyard has an excellent worker safety record. The shipyard management are responsible for the physical security of the submarines and their contents once in their possession, and for all activities relating to the defuelling and dismantlement of the submarines as detailed in the Implementing Arrangements. The shipyard is also responsible for complying with Russian Federation regulations and obtaining the necessary licenses and approvals. The design shop, ONEGA, provide the documentation for the defuelling and dismantlement processes.

Project documentation and the site visit to the shipyard also confirmed the shipyard's project management capacity, well-trained human resources, and commitment to achieving results.

Key informants noted that the decision to focus all activity at one shipyard contributes to the achievement of results by increasing the efficiency and effectiveness (to be discussed in greater detail in Section 5.0) and by establishing a solid working relationship based on consistency, predictability and mutual respect.

Annual Implementing Arrangements

Key informants noted that the annual Implementing Arrangements (IA) provide a great deal of consistency and predictability. The structure of the documents largely remains the same for each IA although the scope of the IA will change to reflect the specific tasks and objectives to be undertaken. The process to dismantle a Victor class nuclear submarine remains largely constant.

Each Implementing Arrangement contains a number of key features, including: the hull numbers of the submarines to be transported, defuelled and dismantled, as well as the management of the spent nuclear fuel. A detailed work breakdown structure provides tasks and milestones to be achieved for payment. Each IA is in Canadian dollars on a fixed price basis. The IA also describes the reporting responsibilities of the shipyard (monthly and final reports) and describes the monthly monitoring visits by IGX and the technical experts. In addition, IGX pays for minor infrastructure and equipment up to 5 per cent of the value of the IA, including those related to the environment. The shipyard proposes projects and equipment to be included in this 5 per cent and IGX negotiates with the shipyard to decide which get funded. A review of the Implementing Arrangements confirmed the consistency of IAs #1 and 2, as well as confirming how the detailed nature of the documents provide predictability for each stakeholder.

Shipyard officials reported that the consistency and predictability of the Implementing Arrangements contributes to the achievement of results because they know what to expect and they know they can implement the arrangements successfully by ensuring adequate human resources are available. Shipyard officials also observed that the annual negotiations are conducted with mutual respect -- that it is evident that each side is dedicated and committed to achieving results and successfully implementing the terms of the arrangements. According to one of the shipyard respondents: "Those who want to do the work, look for the means, while those who don't want to do the work, look for excuses." The shipyard visit confirmed that each side is committed to doing the work and looking for the means to get the work done.

Skills and Experience of the IGX Team and Technical Experts

Many interviewees reported that the skills and experience of the IGX team contribute to the success of the program. Specifically, key informants noted the strong negotiating skills of team members as well as project management and information technology (IT) experience. This includes experience onboard a nuclear submarine. Respondents pointed out that the strong Canadian negotiating skills led Rosatom to agree to all activity taking place at Zvezdochka. Strong project management and IT experience is reflected in the structure and terms of the annual Implementing Arrangements and the methodical approach to the dismantlement program. For example, Microsoft project manager software program has been introduced by the IGX team to the shipyard personnel to be the common basis for tracking the milestones of the work breakdown structure. Several key informants from the shipyard noted the professionalism, dedication and expertise of the IGX program personnel as significantly contributing to the achievement of results.

As illustrated by Exhibit D, the IGX team has a very strong support team. As with other streams in the GPP, IGX senior management intentionally designed the program with a small departmental team that would be supported by external technical experts. In the case of the NPSD program, Teledyne Brown Engineering provide negotiation and monitoring team support. More specialized expertise is sub-contracted to other firms. Individuals on the Teledyne Brown team have experience negotiating with the Russian shipyards (including at Zvezdochka) for the dismantlement of submarines and other vessels under the US CTR program. Individuals on the monitoring team also have previous experience onboard nuclear submarines in both the British and American navies. Respondents from both Rosatom and the shipyard stated that the technical expertise and submarine experience of the IGX and monitoring teams are key success factors for the Canadian program because of the members' ability to immediately understand the terminology, challenges, and conditions of working with nuclear submarines.

Exhibit D: IGX NPSD Program Management Structure

Exhibit D: IGX NPSD Program Management Structure

The small IGX team does make the program vulnerable to staff changes, particularly since much of the project management, IT, and submarine experience reside in one individual. However, IGX representatives suggested that this vulnerability is in the process of being mitigated by establishing a marine engineer position within the NPSD program and by filling the project officer position to provide additional support.

Continuous Oversight

The Implementing Arrangements describe in detail the monthly technical monitoring visits to take place at the shipyard by the IGX monitoring team. The visits are comprehensive and are a requirement for the release of progress payments from IGX to the shipyard. There are a number of key activities that take place during each monitoring visit, including: structured progress meetings to discuss events over the past 28 days as well as work scheduled to take place in the next two months; visual inspection of the defuelling and dismantlement activities; colour photographs are taken to document the progress of activities; confirmation of SNF movements; witnessing TK 18 or TUK 108 flask movements; and visiting the liquid and solid radiological waste handling facilities. Each monitoring visit typically lasts a minimum of two days and is conducted by at least two individuals from the team. In addition, every three months, members of the environmental monitoring team conduct a visit to assess environmental safety and progress towards targets in the Environmental Management Plan (discussed in Section 7.0).

Key informants from the shipyard noted that the monthly monitoring visits are a best practice that was first implemented by the US during the CTR program and that the shipyard can easily accommodate them. Shipyard officials further stated that the monthly monitoring visits provide a discipline that contributes to the achievement of results because they know the IGX team will be visiting each month to confirm that the work breakdown structure is being followed. The shipyard is therefore motivated to ensure milestones are achieved in order to receive progress payments. Shipyard representatives also observed that the monthly monitoring visits help to build a rapport and trust between the shipyard and IGX teams through regular contact. The shipyard visit by the evaluation team coincided with a monitoring visit and confirmed that there is a cooperative and business-like dynamic between the shipyard officials and the IGX teams.

The Implementing Arrangements also provide the basis for audit and inspection by IGX. According to the IA, the shipyard must provide all financial records (e.g., bank statements, invoices, receipts) pertaining to nuclear powered submarine activity. Documentation confirms that an audit has been completed for IA #1. Audit activity for IA #2 was ongoing during the evaluation team's visit to the shipyard.

Risk Assessments Completed and Consulted

Documentation and key informant interviews confirmed that the risk assessments completed and consulted by IGX and the support team contribute to the achievement of results. A comprehensive Risk Register is maintained by IGX and updated on a monthly basis. Project documentation identified risks according to the following areas: industrial (worker safety); environmental / ecological (SNF, radioactive and hazardous wastes); managerial (remote location of the shipyard, communication difficulties); and security (sabotage, theft). Worker safety is considered to be a high risk areas. IGX representatives noted that the primary mitigation strategy is the monthly monitoring visits. These visits allow IGX and the monitoring team members to maintain regular contact with the shipyard; increase their awareness of the risks; and enable them to suggest and implement mitigation strategies, such as providing worker and environmental safety training in Canada. The importance of the Risk Register was demonstrated in August 2005 when there was a fatal industrial accident on NPS 645.(14) Such a risk was identified in the Risk Register and IGX personnel followed the appropriately identified procedures. To decrease the likelihood of a similar accident occuring, IGX and the shipyard implemented further mitigation measures, including additional safety and inspection procedures and equipment.

4.2.2 Impact on Other Areas of Interest to Canada

IGX officials noted that the success of the submarine program is often raised by Russian officials to senior DFAIT officials and that Canada is recognized by other G8 and non-G8 countries as leaders in the dismantlement of nuclear submarines in Russia. IGX representatives reported leveraging the success of the NPSD program in order to achieve results in the area of physical protection of nuclear sites. Key informants in IGX reported that Russia reluctantly included the physical protection of nuclear sites in the bilateral treaty and were mainly focussed on the destruction of chemical weapons and the dismantlement of submarines. However, having seen the Canadian commitment and success of the NPSD program at Zvezdochka, IGX officials noted that their Russian counterparts are now more willing to discuss physical protection and have recently committed to seven projects worth $20M.

Capacity Building in Canada and IGX

There is little evidence that this project provides significant capacity building opportunities for Canadian companies or other government departments in the area of nuclear submarine dismantlement. IGX obtains much of the technical expertise required through a contract with Teledyne Brown Engineering, who in turn has sub-contracts with several specialized firms (see Exhibit D). Within the Canadian government, key informants noted that advice is provided from the Department of National Defence (DND) Directorate of Nuclear Safety, and on occasion from Public Works and Government Services (PWGSC). In addition, IGX encourages the participation of Canadian institutions, where appropriate, such as the Canadian Nuclear Safety Commission and Atomic Energy of Canada Limited. Both of these institutions have relevant technical experience in decommissioning of nuclear facilities and in designing and constructing waste containment facilities. Legal advice, particularly with respect to contracts and the Implementing Arrangements is provided by in-house counsel. The project has made a limited contribution to project management capacity building within IGX, largely because of decisions made at the inception of the program to maintain a small team to minimize administrative overhead.

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5.0 Efficiency And Effectiveness

The evaluation addressed the degree to which Canada's implementation of the NPSD program is efficient and effective by identifying the factors that contribute to overall efficiency and effectiveness and by identifying indicators of efficiency and effectiveness.

5.1 Overall Efficiency and Effectiveness

Key informant interviews, the document review and shipyard visit confirmed the following factors contribute to overall efficiency and effectiveness:

  • Parallel negotiations allowed a fast start;
  • Flexibility by IGX and the shipyard adds to efficiency and effectiveness;
  • Dismantling one class of submarine provides economies of scale benefits;
  • Dismantling the entire submarine is considered to be the only option by Russian officials;
  • Defuelling and dismantlement of submarines take place at one shipyard;
  • A program managed bilaterally with the shipyard by a small IGX team reduces project management costs; and
  • A fixed price contract in Canadian dollars eliminates financial risk.

Parallel Negotiations

Key informants from a range of stakeholders commented that the Canadian NPSD program was implemented in a very short period of time after the negotiation of the bilateral treaty was completed. This occurred because the IGX program negotiated Implementing Arrangement #1, prepared the Treasury Board Submission, and initiated the environmental assessment at the same time that DFAIT negotiated the Canada-Russia Bilateral Treaty. These parallel activities allowed the rapid implementation of the NPSD program once the treaty was signed, the TB Submission approved, and the environmental assessment completed. By way of contrast, shipyard officials reported that negotiations with another G8 country to complete a bilateral treaty have been ongoing for several years and that the G8 country officials could not imagine negotiating an Implementing Arrangement until after the bilateral treaty was completed. The shipyard representatives noted that this protracted process prolongs and worsens the threat posed by the vessels the G8 country has agreed to dismantle.

Despite the success of the parallel negotiations, the NPSD program is left with 43 months to complete the TB commitment to dismantle 12 submarines rather than the 48 months that would have been available if the program had started at the beginning of 2004. Key informants suggested that the "missing" five months could impact on the ability to both defuel and dismantle all of the submarines. In January 2007, IGX officials indicated that this issue will be dealt with under IAs #3 and 4 (to be discussed below).

Flexibility Adds to Efficiency and Effectiveness

Several key informants suggested that flexibility on the part of both the shipyard and IGX add to the efficiency and effectiveness of the program. Shipyard officials reported that IGX provides them with the ability to problem-solve and complete milestones non-sequentially. The mutual understanding and trust developed during negotiations and monitoring visits means that IGX does not have to micro-manage the shipyard. Monthly monitoring visits provide ongoing opportunities to discuss strategies to remain on track. In addition, key informants reported that milestones can be shifted from one IA to another. IGX has not taken a rigid "three submarines defuelled and dismantled per IA" approach. Instead, the program is focussed on removing the proliferation threat of the HEU by ensuring the submarines are transported to the shipyard as soon as possible after being identified by Rosatom. As indicated in Section 6.1 all submarines are currently at the shipyard and seven have been defuelled.(15)

One Class of Submarines Provides Economies of Scale Benefits

Key informants from IGX and the Russian stakeholders noted that Canadian negotiators insisted on funding the dismantlement of only one class of submarine to the extent possible. In particular, the NPSD program was interested in the Victor class (I, II, III), which is one of the smallest conventionally built nuclear powered submarines. Interviewees and documentation reported that this makes it the most cost-effective submarine to dismantle because the nuclear reactors contain a similar number of fuel assemblies as those reactors on larger submarines, but the submarine's small size means there is less to dismantle. For example, environmental assessment documentation noted that there is less non-nuclear hazardous waste to treat and dispose of from a Victor class submarine compared to an Oscar or Typhoon class submarine.

One class of submarines to defuel and dismantle also means there is only one class of documentation to be prepared. Shipyard officials also reported that focussing on only one class of submarines has increased the defuelling capacity at the shipyard by increasing the efficiency of the personnel and streamlining the process. For example, the shipyard now operates three shifts (24 hours a day) during the defuelling process. From 2003 to 2005, the shipyard performed six defuellings (three under the Canadian program) while in the first nine months of 2006, the shipyard performed four defuellings.

Dismantling the Entire Submarine the Only Option

The evaluation also addressed whether efficiencies could be gained by only funding the defuelling of the submarine and leaving the funding of the dismantlement for the Russian government or the shipyard. Under this scenario, Canadian funds could be targeted towards defuelling more nuclear submarines. Several key informants, including Rosatom officials, stated that the Russian government is not interested in a program to only defuel submarines, leaving the funding of the complete dismantlement (and waste management) to others. It was pointed out that the hazardous and radioactive materials remain in the submarines after defuelling and these continue to pose a threat to the environment (shared by Canada). In addition, there are storage and safety issues if the hulls of defuelled subs are left floating at the shipyard. Moreover, since Russia also dismantles four to five submarines/year and pays for maintaining the SNF at Mayak (which is reportedly very expensive), respondents noted that there are insufficient funds in the Russian budget to dismantle the remainder of the defuelled submarines.

Shipyard officials further explained that the dismantling process is not self-financing, thus, they are not in a position to subsidize the cost of dismantling submarines that have been defuelled by Canadian funding. According to shipyard representatives, the need to dismantle the entire submarine is based on Russian experience in the early days of the CTR program when the US would just pay to remove the missiles, leaving the remainder of the vessel to be dismantled. Based on this experience, it was determined that the scrap value of the hull is much lower than the cost of dismantling the submarine. Shipyard officials reported going to a similar-sized shipyard in Seattle and working together with their US counterparts to estimate the cost of dismantling the submarines and the value of scrap to determine if the process could be done on a cost recovery basis. The analysis concluded that the value of the scrap amounted to only 5-7 per cent of the cost of dismantlement.(16) Therefore, in order to reduce the proliferation and environmental safety threat of the decommissioned nuclear submarines, Canada is required to fund the defuelling and the dismantlement of the hull structures. As explained by Rosatom officials, according to federal Russian government laws, any funds received by the shipyard for the sale of salvageable products must be transferred to the Russian government where it is remitted to a special account in the Treasury. The Treasury notifies Rosatom of the availability of funds and Rosatom (with the Ministry for Economic Development and Trade) decide how the funds will be distributed on NPS-related projects. Officials explained that funds are mainly directed towards NPS dismantlement, SNF processing, radiological waste management, or dismantlement of nuclear support ships or surface ships.

Defuelling and Dismantlement Take Place at One Shipyard

As the Russian ministry in charge of the submarine dismantlement program, Rosatom wanted to direct Canadian funds to two or three shipyards. However, officials from Rosatom and IGX described how Canadian negotiators insisted that Canada would only fund defuelling and dismantlement activity at one shipyard, preferably the Zvezdochka shipyard. Key informants explained that concentrating all the activity at one shipyard assists in minimizing the project management costs by reducing travel fees and other administrative overhead. Concentrating all activity at the Zvezdochka shipyard with its western project management experience and advanced infrastructure is proving to be efficient and effective because there is less of a learning curve for each stakeholder in terms of understanding what is required and personnel at the shipyard can implement their tasks in a more efficient manner. As discussed above, the shipyard has already demonstrated efficiencies in the defuelling process.

Small IGX Team Managing Program Bilaterally

Key informants noted that the small size of the IGX team helps to minimize the administrative overhead. IGX officials further explained that by involving only those stakeholders with a direct interest in the program, communication is less time consuming and decisions can be made more efficiently. Since the IGX team manage the program directly with the shipyard and the Russian partner, project management costs are also minimized because fees are not being paid to a western Principal Contractor. According to project documentation, the project management cost estimates for the NPSD program are approximately 6 per cent, and are within the range committed to in the Treasury Board Submission (up to 7 per cent).

Fixed Price Contract in Canadian Dollars

With the assistance of a former US CTR official with knowledge of costing at the Zvezdochka shipyard, Canadian negotiators were able to negotiate the lowest price per submarine compared to any western country at the shipyard for IA #1, according to IGX officials. This became the benchmark for future IAs. The Implementing Arrangements are priced in Canadian dollars and are negotiated on a fixed price basis with payments released only once milestones have been reached (and verified). Key informants noted that this approach means the shipyard bears the financial risk and that it is in their interest to ensure the work is done efficiently and on time. Shipyard officials reported that they exercise strict control to ensure that the defuelling and dismantlement activities do not lose money and that they stay within the pricing limits established by the shipyard internally. Shipyard officials also observed that pricing the IAs in Canadian dollars does not pose a significant risk for the shipyard because the Canadian dollar is fairly stable. In addition, the Canadian funded activity represents a predictable, steady stream of income over the course of the 43 month program.

5.2 Indicators of Efficiency and Effectiveness

The NPSD program has demonstrated that goals are being met on time and under-budget. According to project documentation, as of September 2006, the project was on target to defuel all 12 submarines by March 2008. In January 2007, IGX officials stated that by negotiating a low price as a benchmark, and by negotiating fixed price contracts, the program is under-budget compared to the initial estimates in the Treasury Board Submission. Furthermore, they reported that these savings will be used to dismantle a third submarine under a proposed IA #5 commencing in April 2008.

Project documentation confirms that the milestones for Ias #1 and 2 were met, albeit with slight delays. However, the delays were not significant and the shipyard developed strategies to overcome them to be on track in IA #3.

The final value of Implementing Arrangement #1 was $24,354,341 compared to the $24,406,079 ceiling price established during the initial negotiation. Implementing Arrangement #2 final value was $29,911,126 compared to the $32M ceiling price. In the case of IA #2, savings were generated from the re-allocation of submarines by Rosatom which required some work to be shifted to IA #3 and some additional work (e.g., transporting two submarines by heavy lift ship) to be included in IA #2. Additional savings have also been realized in cases when the infrastructure projects come in under budget.

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6.0 Results / Success

The evaluation of the NPSD program confirmed that the project has demonstrated success in the key areas of relevance, governance and management structure, efficiency and effectiveness and that significant results have been achieved over the course of Implementing Arrangements #1 and 2. It is important to stress that even though this is a summative evaluation, the results are summarized only for the first half of the program (Implementing Arrangements #1 and 2) and it is understood that the program continues to achieve progress. Where appropriate, the evaluation indicates updated results as of January 2007.

In order to determine the results and achievements under the Implementing Arrangements, the evaluation considered the following: planned results and outcomes to date as indicated in the Risk Based Audit Framework (RBAF) included in the TB submission; capacity building at the Zvezdochka shipyard and in Canada; additional project benefits at the shipyard; the impact if Canada reduced or withdrew funding from the program; and the satisfaction of the Russian partners.

6.1 Planned Results and Outcomes to Date

Exhibit E presents the status of a number of planned results and outcomes that were identified in the TB submission RBAF. This exhibit illustrates that by the completion of Implementing Arrangement #2, the NPSD program was on track to meeting the total TB commitments, with the exception of the delivery of the '3 compartment units' to Sayda Bay. Sayda Bay is a storage facility that has been constructed with the financial assistance of Germany. During the site visit to Zvezdochka, shipyard officials were discussing with Rosatom when the towing would take place of the completed '3 compartment units' that were being temporarily stored at Zvezdochka. In January 2007, IGX clarified that Implementing Arrangement #4 addresses the towing of eight units to Sayda Bay in 2007. All other units will be towed under a fifth IA in 2008.

Exhibit E: Planned Results and Outcomes
Results to end of IA #2 (September 30, 2006) and per cent of total commitment achievedTB commitment (March 2008)
7 subs defuelled(17) = 14 reactors removed (58.3 per cent)24 nuclear reactors removed
14 reactors = 3,472 fuel assemblies removed (57.9 per cent to 69.4 per cent)5000 - 6000 fuel assemblies removed
73 TUK 108 / TK18 nuclear flasks filled with fuel assemblies (50.7 per cent to 60.8 per cent)120 - 144 TUK 108/TK18 flasks filled
70 TUK 108 / TK18 nuclear flasks shipped to, and stored at, fuel processing facility (48.6 per cent to 58.3 per cent)120 - 144 TUK 108/TK18 flasks shipped and stored
5 '3 compartment units' formed (42 per cent)12 '3 compartment units' formed
0 '3 compartment units' sent to Sayda Bay (0 per cent)12 '3 compartment units' sent to Sayda Bay
6 front and aft sections of the decommissioned submarines dismantled (50 per cent)12 front and aft sections of the decommissioned submarines dismantled
10 front and aft sections of the decommissioned submarines dismantled disposed of (42 per cent)12 front and aft sections of the decommissioned submarines dismantled disposed of

Exhibit E also indicates that some commitments are closer to being completed than others. This is consistent with the defuelling and dismantlement process and the requirement for some tasks to be undertaken sequentially. The program does remain on track to meet TB commitments.

Exhibit F presents the status of submarine defuellings and dismantlements as of December 2006. This exhibit also reinforces that the program is currently achieving progress towards established milestones.(18)

Exhibit F: Status of Submarine Defuelling and Dismantlements

Exhibit F: Status of Submarine Defuelling and Dismantlements

Exhibit G presents the total amount of liquid and solid radiological wastes removed from the submarines by the end of Implementing Arrangement #2. A total of 785.1 M3 of liquid radiological waste has been removed, representing 52.3 per cent of the total TB commitment. A total of 177.8 M3 of solid radiological waste has been removed, representing 50.8 per cent of the total TB commitment.

Exhibit G: Total Liquid and Solid Radiological Wastes Removed

Exhibit G: Total Liquid and Solid Radiological Wastes Removed

There are five categories(19) of other hazardous wastes that are removed from the submarine. The first category is the most hazardous and includes lamps containing mercury. In total, 8,498 units of the First Hazard Category waste were removed by the end of IA #2. Exhibit H presents the totals for the Second to Fifth Hazard Categories. Much of the hazardous waste is stored at the shipyard in containers, as confirmed by the site visit to Zvezdochka. According to documentation, it is prohibited to dispose of wastes from the First to Third Hazard in the local household waste disposal facility. However, because of a lack of storage capacity at the shipyard, and a lack of a regional hazardous waste storage facility, the shipyard disposes of some waste from the Third Hazard Category at the local household waste disposal facility. These issues will be discussed in greater detail in Section 7.1. There were no commitments in the TB Submission with respect to the removal of other hazardous wastes.

Exhibit H: Other Hazardous Wastes Removed

Exhibit H: Other Hazardous Wastes Removed

6.2 Capacity Building at Zvezdochka and in Canada

Increased Capacity at the Zvezdochka Shipyard

Shipyard key informants reported an increase in their project management capacity as a result of working with the Canadian NPSD program. As an example, they noted that the IGX team introduced them to Microsoft Project Manager software that they now use for projects with other countries as well. Many respondents from the shipyard noted that the experience of working with the IGX team presented a number of opportunities to improve their skills, such as during the Implementing Arrangement negotiations. IGX respondents also reported that the reporting capabilities of the shipyard managers have improved over time. In addition, in November 2006, IGX paid for six shipyard personnel to come to Canada for worker safety training, thereby increasing management capacity with respect to environmental safety and occupational health and safety issues.

During the site visit to the shipyard, many officials expressed their pride and confidence in the shipyard's defuelling and dismantlement capabilities (both human resource and infrastructure) as a result of the success of the NPSD program.

Increased Capacity in Canada

IGX officials reported that prior to the initiation of the NPSD program within the GPP, there was no previous experience in Canada with the defuelling and dismantlement of nuclear powered submarines. After the completion of two Implementing Arrangements, interviewees from IGX, Rosatom, and the shipyard all commented that the IGX team is now considered to be leaders on the subject of dismantling submarines in Russia. As discussed in Section 4.1.3, a number of other countries have sought Canada's advice on working with Russia on dismantling submarines. However, because of the specialized nature of the program, there is limited involvement by other departments or agencies from the Canadian government.

6.3 Additional Benefits at the Shipyard

Key informants, the document review and the site visit to the shipyard confirmed that the NPSD program has resulted in a number of additional benefits to the shipyard, particularly in the areas of worker safety and infrastructure improvements. As noted in the discussion on risks, worker safety was considered by the IGX team to be a high risk area. To address this risk, respondents reported that the IGX team has consistently worked to increase awareness of worker safety during monitoring visits and arranged for six personnel to attend a week-long training session in Canada in November 2006. This training session covered such topics as radiation protection planning; occupational health and safety management; transport of radioactive waste; international waste management regulations; and environmental management.

In addition, IGX has provided safety equipment financed from the 5 per cent infrastructure fund and has worked with the shipyard management to implement additional safety procedures following the fatal accident on board submarine 645. Many shipyard officials commented that IGX backed up its concern for worker safety with a financial commitment as well.

In terms of infrastructure improvements, IGX has focussed on improvements that could be completed within the terms of each Implementing Arrangement and were involved with the submarine dismantlement program. Over the course of Implementing Arrangements #1 and 2, the NPSD program financed the expansion of the Harris Pad where metal cutting takes place; purchased a Fuchs crane; financed the construction of warming huts for the workers; and financed the construction of an access road.

6.4 Impact of Reduced or Cancelled Canadian Funding

The evaluation also assessed the impact of a significant reduction or cancellation of funding to the NPSD program. As noted in Section 1.2, the 2006 review of the GPP resulted in a reduction of the overall NPSD program from $300M to $250M. IGX representatives reported that this reduction will not materially affect the program's ability to fully meet its Global Partnership and TB commitments. This is because of efficiency gains that can be achieved over the course of the entire GPP that will allow the NPSD program to reach the same goals.

However, key informants suggested that a significant reduction or cancellation of Canadian funding would result in a diminished Canadian leadership position amongst G8 and non-G8 partners. Furthermore, because Canadian commitments are significant, the reduction of Canadian funding would require other G8 partners to increase funding or to initiate dismantlement programs in order to fill the void. Respondents noted that such a development would also result in a set-back to the completion of the submarine dismantlement program in North West Russia. It was explained by Rosatom officials that with the pace of dismantlements under the current Canadian program, it is expected that all decommissioned submarines in North West Russia will be dismantled by 2010.

Interviewees also reported that terrorist and environmental risks would remain if the NPSD program was significantly reduced or discontinued. Shipyard officials noted that there would be an impact on employment at the shipyard in the submarine dismantlement business line. These officials also expressed the view that they would seek contributions from other G8 or non-G8 countries since the need to dismantle the nuclear submarines would continue to exist.

Key informants interviewed for the formative evaluation of the GPP reported a number of possible wider implications for Canada, namely: Canada's ability to be taken seriously in multilateral and bilateral discussions relating to joint actions to counter nuclear, radiological, chemical and biological non-proliferation would be severely undermined; and, as the GP and GPP are so closely associated with Canada, diminished or reversed commitments by Canada would undercut whatever enhanced credibility and reputation for Canada had been generated by the success of the Kananaskis summit and the Global Partnership.

6.5 Satisfaction of the Russian Partner

Both Rosatom and shipyard officials expressed a high level of satisfaction with the IGX NPSD program. Several interviewees pointed out that the program was comprised of knowledgeable experts who could "talk the same language" as shipyard officials. Many respondents characterized the personnel on the IGX and monitoring teams as being energetic, enthusiastic, dedicated and determined and further stated that these characteristics and personnel are key to the success of the program. In addition, it was reported that IGX has taken a comprehensive, yet flexible approach to the Implementing Arrangements and treat the shipyard personnel in a professional and respectful manner.

Key informants also pointed out that Canadian concerns for safety and the environment were backed up with both funding and equipment. As further evidence of the satisfaction of the shipyard officials, many expressed a desire to continue cooperating with the IGX teams beyond dismantling nuclear powered submarines.

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7.0 Environmental Impacts

7.1 Benefits of the Canadian Program

The evaluation also assessed the environmental impacts of the NPSD program. Interviewees reported that there is no evidence of environmental damage that could be attributable to the Canadian program. A review of program documentation supports these views. Key informants indicated that Canada was the first country to conduct an open environmental assessment (EA) of submarine dismantlement activity at the Zvezdochka shipyard. Documentation confirmed that the EA was conducted prior to the commencement of dismantling activities to comply with Canadian Environmental Assessment Act (CEAA) regulations. According to documents, the EA included public consultations with the local population and suggested the preparation of an Environmental Management Plan (EMP) for the shipyard. The EMP was prepared under Implementing Arrangement #2 with funding from the minor infrastructure project fund.

According to key informants, the most important, positive environmental impact of the Canadian program is the dismantlement of the nuclear submarines because it eliminates the danger of the decommissioned, deteriorating submarines sinking and potentially leaking hazardous materials into the sea. Interviewees, as well as the site visit, confirmed that the NPSD program has provided the following specific benefits: funding construction of the Harris Pad extension with filters to significantly reduce contamination of the ground from the metal cutting activity and providing training to shipyard personnel in Canada related to environmental management, including waste minimization, waste storage, management of toxic substances; and an overall increase in environmental safety awareness.

7.1.1 Additional Impacts

Key informants also noted a number of additional environmental impacts from the NPSD program at the shipyard. Project documentation and the site visit to the shipyard also support these observations. As indicated in Exhibit D, the project design includes environmental specialists from Nuclear Safety Solutions (NSS) who are sub-contracted to Teledyne Brown Engineering. These environmental specialists conducted the Environmental Assessment and provide ongoing monitoring support to the IGX teams. Key informants described that environmental monitoring visits take place every three months, during which the team reviews shipyard data and reviews developments / progress towards targets set out in the EMP.

As a result of the preparation of the EMP and the monitoring visits, interviewees reported that the shipyard has been responsive to suggestions set out in the EMP, such as better usage of Personal Protection Equipment (PPE); the construction of a concrete pad for the storage of hazardous waste; tying down gas canisters; and the installation of portal monitors at two gates to detect radioactive material leaving the shipyard.

IGX team respondents and shipyard officials noted that the shipyard is working towards ISO 14001 certification with the assistance of the environmental monitoring team and that the preparation of the EMP is an important contribution towards achieving this goal. Gaining ISO 14001 certification will enhance the shipyard's ability to attract additional business from other western countries.

Key informants, the document review and the site visit confirmed that there are outstanding environmental issues to be addressed. These include the treatment and storage of hazardous waste; the treatment of hazardous substances at eight outflow drain pipes; and repairs required to the Yagri Island bridge. Interviewees noted that most of these issues could be resolved with sufficient funding. Shipyard officials reported that there is limited funding for environment-related projects. In January 2007, IGX officials reported that Germany has agreed to finance the construction of a radioactive waste storage facility at Sayda Bay for radioactive waste from North West Russia. The construction of this storage facility will take place from mid 2008 to 2013 and will largely resolve the hazardous waste storage issues facing the shipyard.

7.2 The EBRD Contribution

This evaluation did not assess the March 2004, $32M Canadian contribution to the nuclear window of the Northern Dimension Environmental Partnership support fund based in the European Bank for Reconstruction and Development. This contribution will be included in a future evaluation of other GPP contributions to multilateral organizations. The NDEP fund is focussed largely on the environmental issues related to the Russian legacy problems of the decommissioned nuclear submarines, not on security-related issues.

Key informants and documents confirmed that thus far, there have been limited results from the contribution. The members of the fund only recently approved five projects: four in Gremikha and one in Murmansk. Key informants reported that the Zvezdochka shipyard submitted a business case to the NDEP seeking funding for repairs to the Yagri Island bridge. This business case was supported by Canada and the UK. However, even though the need to repair the Yagri Island bridge is recognized in the Strategic Master Plan, the shipyard initiative was turned down by the fund members. The train carrying the SNF from the defuelled submarines travels over the Yagri Island bridge which is deteriorating.

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8.0 Conclusions

The following summary conclusions are based on the evidence presented in the Key Findings section.

Relevance

  • Funding the defuelling and dismantlement of decommissioned nuclear submarines through the NPSD program remains relevant because it continues to meet the needs of the Russian partner. The situation post the Cold War and break-up of the Soviet Union left Russia with almost 200 decommissioned, and in some cases, deteriorating submarines. Russia first requested international assistance to dismantle the submarines in the early 1990s. In 2002, there were 36 submarines in Northern Russia in need of dismantlement and a larger number in the Far East. In the 2004 Strategic Master Plan, as well as at the G8 summits, Russia has continued to stress that dismantling the submarines is a high priority and has requested international assistance to deal with this problem. The Canadian commitment to fund the dismantlement of 12 submarines in North West Russia represents a third of the submarines in the region in 2002 and is a significant contribution towards meeting the Russian needs.
  • The NPSD program is consistent with Government of Canada priorities as demonstrated by the announcement at the G8 summit in St. Petersburg. It also contributing toward two of the five strategic priorities outlined in DFAIT's Report on Plans and Priorities 2006-2007.
  • The NPSD program is responsive to both anti-terrorism and environmental safety goals of the Global Partnership. Funding the defuelling and dismantlement of the submarines addresses the threat of sabotage and the risk of theft of highly enriched uranium, that if acquired by terrorists, could be used towards developing a nuclear warhead. Removing, treating and storing the radiological and hazardous materials from the submarines helps prevent a potential environmental disaster from occurring in the Arctic.

Program Governance and Delivery

  • There are a number of key features of the program governance and management structure that contribute to the achievement of results, including: the project takes place on a bilateral basis; all dismantlement activity is conducted at the Zvezdochka shipyard; Implementing Arrangements are negotiated annually; the skills and experience of the IGX team reflect project requirements; experienced technical experts are involved; there is continuous oversight; and risk assessments are completed and consulted.
  • As with other streams in the GPP, IGX senior management intentionally designed the program with a small departmental team that is supported by external technical experts. The IGX team has excellent negotiating skills, project management and IT experience, and even nuclear submarine experience. However, many of the skills and experience reside in one individual, leaving the program vulnerable to staff changes.
  • Technical personnel on the support team have experience working on submarine dismantlement activity at Russian shipyards as well as experience on nuclear submarines in the US and British navies. Not only does this experience elevate the credibility of the teams with the shipyard management and Rosatom, it helps to facilitate communication because the stakeholders "talk the same language."
  • Monthly monitoring visits and annual Implementing Arrangement negotiations assist in building a rapport and mutual trust between the IGX teams and the shipyard personnel and improve the ability to mitigate risks. The structure of the Implementing Arrangements provide clarity for the shipyard as to tasks, milestones and payments. The monitoring visits provide discipline for the shipyard personnel to keep on schedule and allow the IGX teams to identify and mitigate risks.
  • All of the above features are appropriate to the context of working at the Zvezdochka shipyard. However, it is uncertain if this approach is replicable for a shipyard in the Far East. It is also unclear whether the success of this approach is dependent on the individuals involved.

Efficiency and Effectiveness

  • A number of factors contribute to overall efficiency and effectiveness: parallel negotiations of the bilateral treaty and the Implementing Arrangement allowed a fast start; stakeholders have a flexible approach; economies of scale benefits achieved by dismantling one class of submarine; all activities are concentrated at one shipyard; project management costs minimized; and fixed price contract in Canadian dollars eliminates financial risk for Canada.
  • Negotiating Implementing Arrangement #1 at the same time as the bilateral treaty negotiations were ongoing, as well as preparing the TB Submission and the environmental assessment allowed the NPSD program to maximize the available time in Phase 1 to be devoted towards achieving the results committed to TB and the Russian partner. This approach also sent a strong signal to the Russian partner that the Canadian program was serious about achieving results.
  • The mutual understanding and trust developed during negotiations and monitoring visits means that IGX does not have to micro-manage the shipyard whose managers have the flexibility to problem solve and not lose time waiting for direction from IGX. Depending on the circumstances, milestones can be shifted from one IA to another allowing the program to focus on achieving overall results.
  • Victor class submarines are the most cost-effective to dismantle because the reactor is the same size as that of a larger submarine, but the submarine's small size means there is less to dismantle. There is also less non-nuclear hazardous waste. By focusing on only one class of submarine, the shipyard has just one set of documents to prepare and has significantly increased the efficiency of personnel and streamlined processes.
  • Concentrating all activity at one shipyard minimizes project management costs by reducing travel costs and administrative overhead. By leveraging the experience of a former US CTR official with knowledge of costing at the Zvezdochka shipyard, Canada negotiated the lowest cost per submarine compared to any western country for IA #1. This cost became the benchmark for subsequent IAs. Moreover, remaining at one shipyard increases the stakeholders' familiarity with their respective roles, responsibilities and capabilities, thereby increasing the efficiency of negotiations and implementation of the IAs.
  • Indicators of the efficiency and effectiveness of the program include goals being met on time and under-budget

Results / Success

  • Progress achieved during the first two Implementing Arrangements demonstrates that the program will meet results in accordance with TB commitments. Further developments in Implementing Arrangements #3 and 4 indicate the program could exceed commitments and still remain on-budget. Specifically, the program is on track to fund the defuelling of 12 submarines (seven defuelled under IAs #1 and 2) and to fund the dismantlement of 11 submarines (five fully dismantled and one partially dismantled under IAs #1 and 2). The 12th submarine, a Typhoon class, will be dismantled with funding from the US CTR program and Russia.
  • As a result of working with the NPSD program, project management capacity at the Zvezdochka shipyard has increased through the introduction of Microsoft Project Management software by the IGX team. Shipyard managers now use this software for the Canadian project, as well for other international projects.
  • Canada is now seen as a leader on the subject of dismantling submarines in Russia. As a result of the success of the program, other countries seek Canada's advice on working with Russia on dismantling submarines.
  • The shipyard has benefitted from the Canadian program in other areas, particularly in worker safety and the environment. The NPSD program has increased awareness; provided funding for equipment and infrastructure; and arranged for training of shipyard personnel in Canada.
  • Another indicator of the success of the program is the high degree of satisfaction of the Russian partner and shipyard officials. The speed of program implementation, the technical expertise of the IGX and monitoring teams, the comprehensive, yet flexible Implementing Arrangements, the concern for, and financial commitment to, worker safety and the environment, and the professional approach taken by the Canadian team are considered key success factors for the program. Both the Russian partner and shipyard management suggested cooperating with IGX on future projects.
  • Providing the magnitude of the decommissioned nuclear submarine problem is similar in the Far East, there is justification to pursue Canadian involvement.

Environmental Impacts

  • The most important, positive impact of the Canadian program is the funding of submarine dismantlements as this eliminates the danger of the decommissioned, deteriorating submarines sinking and potentially leaking hazardous materials into the sea. There is no readily apparent evidence of environmental damage at the shipyard that could be attributable to the Canadian program.
  • The NPSD program funded the preparation of an Environmental Management Plan and the project monitoring team assists in the achievement of targets in the EMP. In addition, the program funded the construction of an extension to the Harris Pad to include features to protect the environment and arranged for training of shipyard personnel in Canada related to environmental and waste management and safety. Environment-related projects are financed from the 5 per cent infrastructure fund.
  • Some environmental issues remain to be resolved, such as the treatment of hazardous substances at the drain pipes; disposal of hazardous materials at the local household facility; and repairs to the Yagri Island bridge. A recent announcement that Germany has agreed to finance the construction of a radioactive waste storage facility at Sayda Bay will largely resolve the hazardous waste storage issues facing the shipyard. The other environmental issues could be addressed with sufficient funding.

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9.0 Lessons Learned

One of the objectives of the evaluation was to determine lessons learned from Implementing Arrangements #1 and 2. Based on interviews, document reviews and the site visit, the following lessons learned were identified.

  • A strong NPSD program team provides credibility, increases efficiency and effectiveness, and facilitates understanding and communication;
  • Negotiating comprehensive annual Implementing Arrangements provides clarity, predictability and consistency improving the achievement of results;
  • Monthly monitoring visits impose discipline, ensure milestones are achieved, build rapport and mutual trust, and assist in the identification of risks and mitigation strategies, particularly in the area of worker safety;
  • Maintaining an open, flexible and professional approach develops trust and leads to results;
  • Concentrating activity on one class of submarine and at one shipyard increases efficiency and effectiveness and minimizes project management costs;
  • Backing up concerns for worker safety and the environment with a financial commitment increases credibility, improves results, and reduces risks; and
  • Ensuring Implementing Arrangements meet mutual interests leads to cooperation and the achievement of results.

10.0 Recommendations

In light of the above conclusions and lessons learned, the following recommendations are made to the IGX project management team:

Recommendation 1: Continue the NPSD Program

It is recommended that the NPSD program complete Phase 1 by completing Implementing Arrangements #3 and 4 at the Zvezdochka shipyard and that IGX consider funding defuelling and dismantlement activities in the Far East given the ongoing need of the Russian partner and the relevance of the program to Government of Canada and Global Partnership priorities.

Recommendation 2: If IGX decides to go to the Far East, consider the following:

It is recommended that if IGX decides to continue the NPSD program in the Far East, the following recommendations should be taken into consideration:

  • Address high risks at the beginning of the project where possible, (i.e., worker safety) and invest in measures to mitigate the risks;
  • Conduct worker safety training, provide equipment, and improve processes in the beginning stage of the program to minimize the risk of an accident occurring;
  • Request the temporary transfer of management personnel from the Zvezdochka shipyard to the Far East shipyard to assist in a smooth transition by allowing the transfer of knowledge between shipyard personnel to take place in a collaborative manner; and
  • Prepare, and then share with the Far East shipyard, documentation of best practices at Zvezdochka, including processes for negotiating the Implementing Arrangements, monitoring visits, safety measures and practices, environment practices, and reporting.

Recommendation 3: Implement the Lessons Learned from Implementing Arrangements #1 and 2

It is recommended that IGX implement to the extent possible, the following lessons learned from IAs #1 and 2:

  • Assemble IGX and support teams with strong technical expertise, project management and IT experience, experience working on submarine dismantlement activities at Russian shipyards, and experience onboard nuclear submarines;
  • Negotiate comprehensive annual Implementing Arrangements;
  • Conduct monthly monitoring visits;
  • Maintain an open, flexible and professional approach;
  • Concentrate activity on one class of submarine at one shipyard;
  • Back up concerns for worker safety and the environment with a financial commitment; and,
  • Ensure Implementing Arrangements meet mutual interests.

Recommendation 4: Strengthen IGX team by recruiting a senior Project Officer to provide back up to Senior Program Manager:

It is recommended that IGX strengthen the NPSD program by recruiting a senior Project Officer with strong project management, IT experience and if possible, submarine experience to support the Senior Program Manager and ensure continuity in the event of a turnover.

Recommendation 5: Set aside funding for environment-related projects separate from the infrastructure projects

It is recommended that IGX designate a separate fund for environment-related projects so that they are not competing with infrastructure projects for funding. This is to ensure Canadian-funded dismantlement activity does not contribute to environmental damage at the shipyard. It is also suggested that IGX continue to work with the Zvezdochka shipyard during the remaining IAs to resolve the outstanding environmental issues.

Recommendation 6: Leverage the successful Canadian experience to attract other donors

It is recommended that IGX consider offering the services of the NPSD program to act as project managers on behalf of other G8 or non-G8 donors with respect to submarine dismantlement activity in Russia. Contributions from additional donors could be used towards the dismantlement of additional submarines or environment / infrastructure requirements at the shipyard.

Annex A: Management Response

Recommendation 1: Continues to implement the NPSD program at the Zvezdochka Shipyard.

IGX response: Implementation arrangement #3 and #4 with Zvezdochka have been initiated and are both being implemented. A fifth implementation arrangement is being contemplated for the dismantlement of two more submarines.

Recommendation 2: Implements lessons learned from negotiated implementation agreements.

IGX response: IGX is taking action. We now have a wealth of experience is negotiating implementation agreements in all sectors of the Global Partnership, experience that we will use - and share - across programs for future IAs.

Recommendation 3: Sets aside funding for environmental related projects separately from the infrastructure projects.

IGX response: IGX is taking action. Currently the Far East program is at the definition stage and we will adopt this approach.

Recommendation 4: Strengthens IGX team by recruiting more staff to provide support to existing staff.

IGX response: IGX is taking action. An engineer position is being created and staffed. The program officer (PM-04) and the program assistant (PM-02) positions are being staffed. The four-person team should be complete by September.

Recommendation 5: Leverages the successful Canadian experience to attract other international donors to the program.

IGX response: IGX is taking action. We participate actively in the Global Partnership Working Group meetings, which inlude all 23 members of the Partnership and which can serve to spread understanding and support of the Partnership. We have visited Korea and Japan to explore potential for increased program funding from these countries. We have approached Australia and will approach New Zealand for the same purpose.

Recommendation 6: If IGX decides to continue the NPSD program in the Far East, the report recommends investing in measures to mitigate risks and ensure workers' safety at the beginning of the implementation, and transferring knowledge and management expertise from the Zvezdochka shipyard to the Far East.

IGX response: The decision to continue NPSD program in the Far East has not been taken yet but we fully agree with the recommendation.

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Annex B: IGX Action Plan - April 2007

RecommendationProposed actionCurrent Status
1- Continues to implement the NPSD program at the Zvezdochka Shipyard
  • Continue programming until the end of 2007/08.
  • A fifth implementation arrangement will be negotiated December 2007-January 2008
Fourth implementation arrangement being implemented, Negotiations of any subsequent IAs subject to TBS approvals and funding availability. Current DFAIT strategic review may lead to cancellation of further submarine works in Northern Russia
2- Implements lessons learned from negotiated implementation agreements
  • Compile Lessons Learned and integrate them in the negotiation strategy of the NPSD program this year.
  • Share lessons learned across programs: Sharing lessons learned is part of a review of IGX information sharing processes that has been launched after the February IGX retreat.
Fourth implementation arrangement successfully negotiated Feb 07.

NPS program continues to set the bar for other IGX (and DFAIT) programs.

3- Sets aside funding for environmental related projects separately from the infrastructure projects
  • Set aside funding for environmental related projects which will be included in the financial arrangements for projects in the Russian Far East fiscal years 2008/9 through 2010/11.
This will be done subject to funding availability. Current DFAIT strategic review may lead to substantive cuts to the NPS program which may negate any opportunity for environmental related projects.
4- Strengthens IGX team by recruiting more staff to provide support to existing staff
  • Provide three team members for the SPM.
  • Staff the PM-04 position in May and the PM-02 position in June.
  • Create an engineer position in July and staff the position by September 2007.
No progress. The SPM for the NPS program now works alone with only one part time PM04 to assist.
5- Leverages the successful Canadian experience to attract other international donors to the program
  • Continue to engage good prospects like Korea, Japan and Australia.
  • Write to potential donors to seek their contributions, once plans for the Far East are clearer.
  • Take the opportunity of an international conference in May to hold consultations with Korea.
  • Take the opportunity of negotiations in the Far East in November/December 2007 to hold consultations with Japan
Korea ready to provide funding following engagement by program but current TB authority is not being adjusted to permit acceptance of such funds into NPS program. Good will generated by the initiative, however, will probably see funds go to NRS program instead.

Australia yet to be contacted formally pending a final decision on the scope of the 2008-2012 program.

Consultations being held with Japan (next meeting Sep 14 in Tokyo)

6- If IGX decides to continue the NPSD program in the Far East, the report recommends investing in measures to mitigate risks and ensure workers' safety at the beginning of the implementation, and transferring knowledge and management expertise from the Zvezdochka shipyard to the Far East
  • Integrate measures to mitigate risks and ensure workers' safety in the resultant project that we will propose to the chosen Russian partner.
  • Include steps in projects to ensure the transfer of knowledge and management expertise from the Zvezdochka shipyard to the selected Far East shipyard.
Negotiations not yet started but the environmental assessment of FSUE Zvezda being conducted September 2007 provides opportunity to address the issue.

1. Source: "NDEP's Nuclear Window enters implementation phase," EBRD Press Release, 16 December 2005 (online 1/06/06). (return to source paragraph)

2. For example, "Russia: Decommissioning and Disarmament," NTI (online), "Issue Brief: Nuclear Submarine Dismantlement," NTI (online 15/01/07), "The Russian Northern Fleet: Decommissioning of Nuclear Submarines," Bellona Rpt. Nr. 2:96 (online 15/01/07). (return to source paragraph)

3. "Statement by G8 Leaders: The G8 Global Partnership Against the Spread of Weapons and Materials of Mass Destruction," (online 15/01/07). (return to source paragraph)

4. "Strategic Approaches in Solving Decommissioning Problems of Retired Russian Nuclear Fleet in the North-West Region: Executive Summary of the Strategic Master Plan, Phase I" Moscow, 2004. Funded by the NDEP nuclear window. The Strategic Master Plan focuses on environmental issues and identifying priority projects. (return to source paragraph)

5. Ibid, pp. 12-13. (return to source paragraph)

6. Report on the G8 Global Partnership, St. Petersburg, July 16, 2006 (online 12/01/07). (return to source paragraph)

7. "Nunn-Lugar Cooperative Threat Reduction Act of 2005", The Orator.Com News and Information (online 12/01/07). (return to source paragraph)

8. Source: Report of the G8 Global Partnership, St. Petersburg, July 16, 2006 and the GPWG Annual Report 2006 (online 12/01/2007). (return to source paragraph)

9. See Section 2.1.6 The Department's Overall Priorities for 2006-2007, pp.29. [online 12/01/07] (return to source paragraph)

10. Also known as a "Dirty Bomb." (return to source paragraph)

11. "Illicit Nuclear Trafficking in the NIS: What's New? What's True?" by William C. Potter and Elena Sokova, The NonProliferation Review / Summer 2002. pp. 112-120. According to the Strategic Environmental Assessment Report for the Strategic Master Plan of the NDEP (Exec Summary), April 2005, pp. 20, "several cases of theft have been reported in recent years, including the theft of radioactive materials." (return to source paragraph)

12. The CEG focuses on promoting international cooperation on radioactive waste and spent nuclear fuel management in Russia. See: "Nuclear Fuel Cycle and Waste Technology: Contact Experts Group" www.iaea.org/ for further information (online 10/16/06). Members include Canada, Belgium, France, Finland, Germany, Italy, Norway, Sweden, the US, the UK, and the EU. The IGX representative is currently the Deputy Chairman of the CEG. (return to source paragraph)

13. Source: "Statement by G8 Leaders: The G8 Global Partnership Against the Spread of Weapons and Materials of Mass Destruction" www.g8.gc.ca/2002kananaskis/globpart-en.asp (online 25/01/07) (return to source paragraph)

14. Two workers were fatally injured onboard NPS 645 on August 1, 2005 as a result of an explosion and fire during welding operations on a tank in compartment 3 of the submarine. (return to source paragraph)

15. Updated data received from IGX indicates that eight submarines have been defuelled as of February 2007. (return to source paragraph)

16. Documentation suggests that up to 20% of the costs might be recouped by the sale of non-nuclear materials. Source: US Department of State, "Environmental Security Threat Report, Section II" (consulted 25/01/07) (return to source paragraph)

17. Updated data received from IGX indicates that eight submarines have been defuelled as of February 2007. (return to source paragraph)

18. In early 2007, negotiations were underway to defuel a 13th submarine under IA #4, but the Russian navy withdrew this submarine from its decommissioned list. (return to source paragraph)

19. 1st Category: lamps with mercury; 2nd Category: hydraulic liquid, base electrolyte, freons; 3rd Category: insulation, lubricants & fuel, firefighting foam, contaminated materials from dismantling sites, sediment from galvanic workshop wastewater treatment plant, waste from the boiler, misc (varnish, glue, paint); 4th Category: rubber, misc (incl. insulation containing asbestos, plastics); and 5th Category: building waste, wood, paper, office waste. (return to source paragraph)

Office of the Inspector General


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Date Modified:
2012-10-26