The Miami Herald
May 15, 1999

Cuba nuclear plant deal greeted with skepticism

Herald Staff Writer

A Cuban-Russian announcement Friday for a deal to resume construction of the
long-stalled Juragua nuclear power plant in Cuba has drawn widespread
skepticism from experts on the project.

``It doesn't have a snowball's chance in hell . . . because the Russians simply
don't have the money, said Jonathan Benjamin Alvarado, a University of Georgia
professor writing a book on the Juragua project.

The announcement made in Moscow said the Cuban and Russian governments
had reached agreement on forming a joint venture to finish the power plant,
mothballed since Soviet subsidies to Cuba stopped in the early 1990s.

It estimated the cost of finishing the reactor at $650 million to $700 million and
added that Russia had also agreed to postpone repayment of the $25 million that
Moscow lent Havana in 1993 to pay for mothballing the project.

U.S. congressional conservatives have long expressed concern about the
possibility that Cuba would try to finish Juragua, which uses old and
accident-prone Soviet technology.

Pentagon officials paid $2 million this year to establish several
radiation-monitoring stations around Florida in case Juragua is finished and has
an accident.

But Alvarado, who has visited the plant and interviewed several of its officials, said
the project is almost beyond the point of rescue.

The real costs of finishing Juragua would be closer to $1 billion and rising all the
time because the mothball loan has run out and the facility near the southern port
of Cienfuegos is continuing to rust away, he said.

Havana and Moscow have made similar announcements on their intention to finish
the project in seven of the last eight years, yet there has never been any progress
in arranging the actual financing, Alvarado added.

``Although Russia continues to try to demonstrate a willingness to complete a
number of different projects in Cuba, the prospect of this occurring is very remote,
he said.

``This is meaningless, Alvarado added. ``Nothing ever happens, because the
Russians don't have any money.

The Moscow announcement also covered the annual trade deal that the two
nations have announced since 1992 as if they continued to have centrally planned
economies -- setting orderly trade goals -- even though Russia's economy is now
controlled by market forces.

Signed by Russian Trade Minister Georgy Gabuniya and Cuban Foreign Trade
Minister Ricardo Cabrisas, the deal binds Russia to ship 11 million barrels of oil
to Cuba this year, up by 80 percent from 1998 levels, and says Cuba will pay with
sugar exports.

But Cuba no longer produces enough sugar to pay for such high levels of oil
imports, Russia prefers to sell its crude for dollars, and Moscow can no longer
afford to give Havana credit, economic experts said.

Cuba's just-completed sugar harvest produced 3.6 million tons. Havana usually
exports one million tons to Moscow.

But at current prices of five U.S. cents a pound, Cuba would earn only about $110
million from its sugar exports to Moscow. At about $16.50 per barrel, Moscow
would need $1.8 billion for its projected oil exports to Cuba.