St. Petersburg, Russia, 23-24 June, 2005

On 23-24 June 2005 the Third Annual Conference on the progress of the UK-Russian Closed Nuclear Cities Partnership (CNCP) was held in St. Petersburg. The conference was attended by representatives of the UK Department of Trade and Industry, Rosatom, top management of the largest nuclear enterprises, representatives of city administrations, CNCP managers and experts, totally - 41 people.

Greg Kaser, CNCP Programme Manager, Director of European projects at HTSPE Ltd. opened the conference welcoming the participants, mentioning the importance of the event and wishing everyone a successful and fruitful work.

Right after the official greetings, principle reports were given by Trevor Hayward, the Assistant Director of Department of Trade and Industry (DTI) International Nuclear Policy and Programmes Directorate and Vladimir Sterekhov, representative of Russian Federal Atomic Energy Agency (Rosatom) and Coordinator of Nuclear Cities programmes.

Trevor Hayward mentioned in his report that the USA and the United Kingdom make the main financial contribution into the implementation of nuclear, massive weapon and military nuclear technologies non-proliferation treaties, and counter-terrorism, and Great Britain's commitment to invest 20 billion dollars within ten years to support nuclear safety projects primarily in Russia proves that. Russia, other G8 countries and some other countries that are not affiliated to G8, also contribute to Global Partnership.

A general structure of the budget, provided in 2005-2006 to solve the problems of nuclear and radiation heritage of the former Soviet Union under Global Partnership's activity, was described in the report. Nuclear safety, non-proliferation programmes, closed cities and decommissioning initiatives are the main areas of attention.

The key part of the presentation was devoted to a detailed analysis of the CNCP Programme, which answered the fundamental questions, i.e. "Why?"- explaining programme's rationale and objectives; "Where?" - giving the programme's geographic scope; "What?" - talking about the programme's content and its funding; and "How?" - covering the legal aspect. The main goal of the Programme is to promote international security by reducing the risk of nuclear proliferation and nuclear terrorism by creating alternative sustainable civilian jobs for military and nuclear specialists, and facilitate the commercialisation process in closed cities.

The results achieved to date were specified in the report. These include a large number of investment projects, considerable support to commercialisation in terms of training, partnering opportunities and creation of business development entities.

The summary of investment project is presented below:

• 21 projects are completed or underway in Snezhinsk, Sarov, Seversk, Ozersk and Zheleznogorsk;
• 9 market research projects have been carried out in CIS countries,
• Total funding provided to international projects in FY2005/06 is 5.25 million dollars;
• Expected number of newly created jobs is 640,
• Estimated percentage of jobs for the targeted group of specialists is >55%

The main areas of commercialization support include:

• Training, including targeted training for investment projects; English for Business Negotiations, business training under LINK programme in British Open University and marketing training;
• Commercial partnering, including UK- Russia Technology Roadshow, European Games Network in Great Britain;
• Institutional development, from organization of study tours to Oxford, Scotland and South-West of England to establishment of Business Development Agency in Seversk.

An importance of legal framework for the CNCP programme was reinforced, including Memorandum of Understanding recently signed between Rosatom and DTI (November 2004), ISTC mechanisms and legal frameworks of ISTC/STCU work in CIS.

In conclusion the speaker talked about challenges and issues the programme currently faces that require special attention. These include:

• Monitoring and assessment. It is necessary to have more access and to use benchmarking against best practice;
• International coordination, including a wide range of aspects, i.e. strengthening of non-proliferation rationale, exchange of knowledge and experience, establishment of best work practice and creation of environment when bilateral activities complement each other;
• Achievement of a very high level of Russian commitment to the programme;
• Expansion of knowledge exchange in key commercialisation areas;
• Exchange if best experience and development of new successful cooperation models;
• Wider mass media coverage of success stories in Russia, CIS countries and Great Britain.

Then Vladimir Sterekhov, CNCP coordinator in Rosatom gave an overview of the Programme's progress and perspectives. He pointed out a considerable similarity between the materials prepared for his presentation and the report given by Trevor Hayward. According to the Russian side, the following events and milestones might be considered as the key achievements in FY2004-2005:

• Memorandum of Understanding was signed between Rosatom and DTI;
• CNCP Programme was registered at the Technical Assistance Committee under the Russian Government;
• The British side is fulfilling its financial commitments to full extend;
• Projects underway are focused on creation of new jobs and infrastructure, which is capable of facilitating business development in closed cities;
• The major part of the projects is implemented through Administration entities of the closed cities.

Strengths and weaknesses of the existing cooperation mechanism were mentioned. Vladimir Sterekhov pointed out the following strengths:

• CNCP Programme has its own implementation mechanism, which does not require the use of other mechanisms (ISTC, etc.);
• ü Current mechanism used for the CNCP Programme implementation has been developed for future use under the Government-to-Government Agreement;
• ü Implementation of the CNCP Programme through the managing company makes the work a lot more effective.

Absence of executive agreements about the collaboration mechanism, which results in faulty execution of planned activities, was mentioned as the Programme's weakness.

Development and signing of Government-to-Government Agreement will be the main task in CNCP's future activity. Besides, it is necessary to sign cooperation agreements with closed cities administrations and Rosatom's institutions about the implementation of the CNCP Programme in the closed cities. It was mentioned that it is worth increasing the scientific and innovative component in the future projects implemented in the closed cities.

Vladimir Sterekhov discusses the Programme's structure and a principle scheme for recruitment of Russian nuclear specialists, laid off from the nuclear military complex, mentioning the importance of the legal aspects. Adequate and consistent legal documents should make the basis for the cooperation, its organizational structure and operations.

Programme Leader, Patrick Gray, was the speaker for the next session and in his opening speech he discussed the Programme's four main instruments and their combination used to best achieve CNCP goals. Then the floor was given to the heads of these four main areas:

An overview of the grant projects implemented under the CNCP Programme was given by Alexander Tsibulya, CNCP Coordinator and Deputy Head of HTSPE Ltd. Moscow Office.

Creation of new jobs as a result of the project implementation is the main goal of the grant support. The commercial potential of the projects is the key to sustainability of new jobs and a guarantee to long-term positive partnership effect. This factor plays one of the main roles in project selection process. Moreover, at least 55% of the new jobs created under the grant project, should be given to former nuclear weapon specialists. There are also some funding limitations. Thus, the DTI's contribution should not exceed ?200 thousand. Preference is given to projects, which have additional funding sources and supported by a Rosatom's institution or a City Administration.

The statistics of the grant support is presented below:

• 18 grant projects are being funded;
• 143 jobs have already been created;
• 22 projects and activities in the areas of training, partnering, and economic development have been implemented; 44 projects have been reviewed and received funding;
• £3.6 M has been committed to projects and activities.

Creation of new consumable goods manufactures (490 new jobs and funding of £1.90M) dominates in the grant project portfolio. Four projects might be considered high-tech (100 jobs, £0.73 M) and two projects are represented by servicing companies (50 jobs, £0.21M). It was mentioned that when the grant project portfolio was formed, the risks were minimized by diversifying projects in the portfolio, combining risky high-tech projects with secure market-proven manufacturing projects.

Special emphasis was made on the fact that CNCP grants serve as a lever to attract other funding and sometimes relatively small contribution from DTI leverages much larger amounts. Nitrogen Trifluoride manufacture at Seversk Chemical Combine is a bright example of the leveraged funding, when 20 thousand helped attract £9 million. Other examples include compensation of an interest on the bank loan (Kraspan, Zheleznogorsk - 123 jobs, ?90 thousand), co-funding with Rosatom through a joint money pool under Fund-M, revolving funding in equal shares, etc.

A project selection and project implementation mechanism was detailed in the second part of the presentation. HTSPE Ltd. Moscow office and coordinators in the cities organise project selection process and provide project implementation support. A project supervisor reviews the project, gives funding recommendations and monitors project implementation process. CNCP Coordinator in Rosatom forms Rosatom's position on the project and the Steering Group at DTI that meets once every three months, makes the funding decision.

After the project is approved by Rosatom and CNCP experts, the grant project undergoes two stages: first, an outline project proposal is prepared that has to be approved by the Steering Group, which is followed by a preliminary analysis. As a result, expert recommendations are formed, a detailed project implementation plan is developed and an official approval is received from Rosatom. At the second stage a full proposal is prepared, which has to receive the Steering Group's approval and then a contract type is selected: direct contract or a contract through ISTC.

After the contract is signed an on-going monitoring of the project implementation and result assessment is conducted. The monitoring includes:

• Monitoring of project implementation & financial audit;
• End of project assessment;
• Evaluation of short-term effect;
• Post-project monitoring; and
• Evaluation of long-term project effect

This approach to providing grant support ensures sustainable jobs, which is the main project result.

Mark Allington, CNCP British expert, responsible for business partnering, representative of AEA Technology, made a comprehensive report about the CNCP Programme's activity in FY2004-2005. And again, partnering prerequisites, approaches to achieving the goals, set for the given period, and Programme's activities, results and observations were outlined.

Along with the cooperation goals mentioned earlier, the speaker reinforced that creation of trade and investment links with British companies will help our bilateral partnership to endure long after government priorities change.

The approaches used to achieve the Programme's goals include: facilitation of the information exchange and dialogue between potential partners (contact information exchange, face-to-face meetings, technical and financial assistance), initiation of joint projects and grant support to reduce early stage risks.

From the speaker's point of view, the top priority in the reporting period of FY 2004-2005 was to prove that it is possible to create a successful commercial partnership in practice and then to publicize the success story and replicate it is other projects.

The main results in the area of partnering comprise:

• Game software roadshow in Great Britain in September 2004;
• Trip to UK to promote titanium-based products in October 2004;
• Assistance provided in creating partnerships (further development of block thermal unit manufacture, fire alarm, mass production of electric-power modules, super-luminescent diodes, creation of testing-production ground of solid-oxide fuel cells, and manufacture of stands for medical applications.)

More detail was given on the three most successful new manufacture creation projects:

1. Joint venture Time Electronics-SCC-WFTest to manufacture measurement devices and calibration equipment in Seversk. This is a high-tech production that will create 20-50 additional jobs and will open the access to the growing Russian market. The company has low production costs and provides a profit share to promoters.
2. A contract is being negotiated to produce portable hoists in Sarov. In order to increase competitive advantages of the lifting device, it is necessary to reduce the weight at the same technical characteristics and cost. It is possible with the use of titanium technologies, developed in Sarov.
3. Manufacture of Nitrogen Trifluoride in Seversk, including sales and distribution activity. This manufacture is established with DTI's assistance, with CNCP helping with business planning and personnel training. When started, the production will create about 150 new jobs.

Despite a number of great achievements, the speaker mentioned that the progress is slow and difficult and - "…we have a lot to learn".

The next report was devoted to the training initiative of the Programme in FY 2004-2005 and was given by HTSPE Ltd Expert Chris Bailey.

The training needs are identified in the course of negotiations and discussions with beneficiaries, as well as when reviewing suggestions made by partnering-businesses. The needs are met with the help of local and international training providers and with a rigorous evaluation of the training programmes.

The Programme's training activities in Russia in the reporting period included set-up of LINK courses in Zheleznogorsk and Snezhinsk, a seminar on funding mechanisms at the Urals. It is planned to conduct a workshop on effective sales in Snezhinsk.

The training activity includes a number of internationals events, i.e.:

• Water Jet Cutting technology training in Hanover, Germany;
• Business English training at De Montfort University, Leicester, UK;
• Study Tours to Scotland, North West England and preparations of South West England trip;

To determine training effectiveness and ways to improve training activities in the future, an evaluation form for training courses and programmes was developed, an analysis of critical feedback is made to be able to improve the courses and forecast a long-term effect.

Business English courses in De Montfort University will continue in 2006. A study tour to Great Britain and a training programme in Seversk are planned. Such a variety of future training activities demonstrate CNCP management's intention to conduct a large number of courses to support investment project implementation.

The follow-on series of presentation made after lunch, were focused on each closed city, participating in the CNCP Programme, i.e. Snezhinsk, Ozersk, Seversk, Zheleznogorsk and Sarov.

Snezhinsk

Yuriy Rumyantsev, the Director of Fund International Development Centre - Snezhinsk (IDC-Snezhinsk), CNCP Coordinator in Snezhinsk and Ozersk, shared the Fund's experience with the audience. The Fund, a non-for-profit organization, founded in 1999 under US-Russian Nuclear Cities Initiative Programme, has the following aims:

• Provide support to businesses and non-profit sectors in the closed city;
• Create favourable environments for entrepreneurship development, and
• Assist with the non-proliferation mission.

In FY2003-2004 IDC-Snezhinsk was selected to coordinate the CNCP Programme in Snezhinsk and then, in FY2004-2005 in Ozersk. 7 grant projects are being funded in Snezhinsk under CNCP, including 2 with Snezhinsk city-forming enterprise - RFNC-VNIITF, 4 projects implemented with the private business representatives and 1 training project.

The speaker gave several examples describing in detail the status of some projects implemented in Snezhinsk by private businesses. These included Creation of Centre for Design and Manufacture of High-Quality Paper-Cardboard Packaging in Snezhinsk, which became the first CNCP project in Russia. The project is implemented by OOO Raster-Technology, with the total project cost being ?384,500. The funding provided by the British side to the amount of ?250,000, was used to purchase the production facility and technological equipment, technological update of the production and training of the newly hired. 20 new jobs have been created. The project was completed in March 2005, with the British side currently conducting post-project monitoring. The project on expansion of OOO Raster-Technology is now supported by US-Russian Nuclear Cities Initiative Programme.

Creation of Package Materials and Disposable Ware Manufacture at the Existing Enterprise Producing Sheet Materials from Polystyrene and Polypropylene Wastes was the second project given as an example. The project is implemented with Closed Scientific Production Company Plastform. As a result, an enterprise with the full production cycle based on non-waste technology will be established. Total project cost is ?464,000. The funding provided by CNCP, to the amount of ?200,000 is used to procure production equipment and upgrade the electricity sub-station. 21 new jobs will be created under the project.

The third example talked about Creation of Energy Saving Servicing Centre in Snezhinsk. The centre's main goals are to increase the effectiveness of energy use and to help solve the problem of energy deficit for business development in Uralian closed cities, primarily in Snezhinsk and Ozersk. Total project cost is ?120,000 and it is fully covered by DTI to:

ü Purchase the equipment (thermal tracer, leak detectors, utility detection systems, computers, etc.) and software (software for heat loss calculation, for distribution lines regulation, etc.) for a portable measurement laboratory;

• Procure an automobile for equipment transportation;
• Train the personnel in energy saving methods and energy audit;
• Get the company accredited.

11 new jobs will be created under the project. 7 jobs have already been created, including 6 jobs for former weapon experts, with 4 specialists coming from RFNC-VNIITF.

Under the investment project initiated by OOO Maple-S it is planned to update the production and replace the equipment to expand the range of products by producing furniture facing panels from wood, shaped Medium Density Fibreboard, framed compound facing panels and shaped elements. Total project cost is ?290,000, with ?190,000 granted by DTI. Number of new jobs created - 22.

And, finally, the speaker talked about creation of LINK regional centre at the Fund IDC-Snezhinsk. The centre provides management training courses under Open British University for Snezhinsk and Ozersk. This training is needed for managers of small and medium-sized companies, city administration and city-forming enterprises to be able to solve restructuring tasks. With DTI's financial assistance the first 2 groups of students will get a 30% discount. The project is fully funded by the British Programme.

Talking about the training activity of Fund IDC-Snezhinsk, the speaker mentioned the Effective Sales seminar, organized for companies that implement investment projects in Snezhinsk and Ozersk. The seminar was conducted by Stockholm School of Economics in St. Petersburg, and was attended by 27 people from 11 entities in Snezhinsk and Ozersk.

To expand the Partnership opportunities, upon CNCP's request IDC organized a one-day conference in the Urals in June 2004. The conference was focused on the Development of Crediting and Leasing Issues under the Programme. The conference was attended by representatives of Snezhinsk and Ozersk banks and foundations, EBRD specialists, top-management of the companies engaged in conversion projects under CNCP, totalling about 30 people.

IDC's activity as CNCP Coordinator in Ozersk was represented by five grant projects. They are implemented by private business sector, and the speaker expressed his regret about Production Company Mayak having been unable to use the conversion opportunities offered by the CNCP Programme.

Yuriy Rumyantsev describes the status of the five projects, in particular:

• Expansion of OAO Energoprom's Production Capacity. Energoprom is the company that designs and manufactures electro-technical equipment. The new equipment has been procured under the project, delivered to Ozersk, installed and started. Total project cost is over ?350,000, with CNCP providing ?187.000. It is planned to create 57 new jobs, with 33 having been already created, including 11 jobs for former weapon specialists.
• Manufacture of Environmentally Friendly Furniture for Pre-school Children from Wood, the project being implemented by OOO Bur-Invest. DTI funding was used to purchase the equipment, which has been procured, delivered to Ozersk, assembled and started. Total project cost is ?170,000, with the British funding of ?117,500. Planned number of new jobs - 50, with 44 jobs having been established.
• Expansion of Confectionary Production at ÎÎÎ Ozersk Candy Factory. CNCP's funding was used to purchase confectionary equipment, which has been brought to Ozersk, installed and started. Total project cost was ?50,000, with the British side providing ?35,000. The major part of the funding has been received.
• ü Creation of Complex Area for Electric Drives Automatization. Under the project a production will be established within PromElectro Company, which provides a full range of electric drive automated control services. DTI funding is used to purchase computing equipment and components, specialized software, measurement devices, communication equipment, and vehicles. Total project cost is over ?250,000, with the British funding of ?92,000. It is planned to establish 14 new jobs, with 12 being already created, including 7 jobs for former weapons specialist.
• Expansion of Water-Dispersed Paintwork Material Production at OOO FinInterKom. The funding provided to the project under the CNCP Programme, is used to reconstruct external electric network, and to procure technological equipment, equipment for analytical laboratory and loading-unloading equipment. Total project cost is over £180,000; funding provided by CNCP is £136,000. It is expected to create 24 new jobs till 2007; 5 jobs have been established by 2005, with 4 positions being filled by former nuclear specialists.

The speaker concluded saying that assistance provided under CNCP is very effective, since it helps create new productions and a considerable number of new jobs within a short period of time. The Uralian companies have realized that grant funding is not a present and a Russian company is obliged to meet the contract requirements to establish new jobs, recruit former nuclear specialists, and meet finical requirements. It was suggested that for repeated clients, who have already participated in the CNCP Programme, the opportunity of using revolving funding mechanisms should be considered.

Olga Lapteva, Deputy Mayor of Snezhinsk, responsible for investment policy issues, gave a report about the interaction between the City Administration with the CNCP Programme. In the introductory part Snezhinsk city management and international activity management structure were presented; and special attention was drawn to the peculiarities of the city staffing potential, which is mostly formed by physicists, mathematicians, engineers, programmers, designers and technologists.

The following industrial areas are considered to be the most promising by the City Administration of Snezhinsk:

• Power engineering and energy saving;
• Telecommunication and software and hardware development;
• Medicine - development of medical devices and equipment;
• Materials science, design and production of materials.

Then the speaker gave more detail on each of the areas, paying special attention to Snezhinsk development potential based on the examples of specific projects, proposed for CNCP's review in FY 2005-2006.

Power Engineering and Energy Saving

Snezhinsk's main problem is lack of available power and electrical capacities for new residential construction and industrial development. As a solution to the problem, new generating capacities are being built. Thus, this year a new boiler house will be started, providing sufficient heat supply in Snezhinsk for the next 15 years; and in 2007 a new transformer substation with the capacity of 35 Mega Watts will be commissioned. Besides, new gas distribution lines are being designed and assembled within the City territory.

Telecommunication

Insufficient communication capabilities have several times been considered as one of the factors that slows down the city's economic development and effective promotion of investment projects. A project on Creation of High-Speed Communication Channel between Snezhinsk and Ozersk Computer Networks is being proposed to the CNCP Programme. The project will be carried out by Vega-Internet (Snezhinsk) and InformService (Ozersk), who plan to:

• Connect communication networks of Ozersk and Snezhinsk by a radio-relay channel;
• Reduce the price of Internet traffic by buying it from wholesale for two cities from a Federal provider. That will decrease the cost of Internet services;
• Provide information and communication services to the subscribers in the unified information environment in Snezhinsk and Ozersk.

The funding required for the project implementation is £85,000, which will create 10 jobs for former weapon employees.

Medicine

It is planned to get CNCP's support to set up an interregional medical blood testing lab for northern cities of Chelyabinsk region. The project is initiated by a group of RFNC-VNIITF employees. The project implementation will result in the creation of a chain of medical facilities in the northern part of Chelyabinsk region (Ozersk, Kasli, Kyshtym, Ufalei, etc.) and a central diagnostics laboratory making full-scale blood tests, i.e. cytological, hematological, biochemical, coagulological, immunological, microbiological, and cytogenetical. Total project amount is ?140,000; the number of new jobs is 20, including 11 positions for former nuclear specialists.

Material Science

It is planned to implement a high-tech project in cooperation with Production Company Mayak, where radio luminescent sources of light (LSL) are made in the form of ampoules filled with tritium and phosphor. It is proposed to develop and start manufacture of the final products. i.e. lightning devices, where radio luminescent light source is used a basis, e.g. illuminated placards and signs, which do not require electricity. The project is initiated by a group of RFNC-VNIITF specialists. The required funding is ?190.000; it is planned to create up to 30 new jobs, with 20 positions filled with former nuclear experts.

Machine-Building

Close Company UralPromComplect, the Urals regional distributor of metalworking machines and centres, is requesting DTI's assistance in the machine-building sector. It is planned to invest ?272,000, including ?200,000 requested from CNCP to set up a Snezhinsk-based manufacture of tooling for metalworking equipment, sold and operated in the Urals. The number of new jobs created under the project is 12, with 8 filled by the ex-nuclear employees.

Boris Vodolaga, Deputy Director of VNIITF, spent some time describing one of the projects implemented under CNCP and funded through ISTC. It is expected to create a Site for Experimental and Industrial Solid Oxide Fuel Cells (SOFC) Manufacture. A design scheme of the element and its technical characteristics were presented in the report, along with the review of project goals and stages, including:

• Preparation of the Business Plan for SOFC-based power installations production;
• Development of the State of Work and technical design for facility reconstruction;
• Reconstruction;
• Order placement and equipment manufacture;
• Production of a pilot lot of solid oxide fuel cells; and
• Creation of a web-site and a promo booklet on R&D, conducted in the field of SOFC in RFNC - VNIITF.

A written agreement has been received from DTI to fund the project in the framework of UK--Russian Partnership. The Project has undergone through the registration procedure in VNIITF and Rosatom, and the documentation has been prepared for submission to ISTC. VNIITF participated in the Rusnauka's (Russian Science) Competition with this development and won it. The governmental contract has been prepared.

Ozersk

Sergei Chernyshev, the Mayor of Ozersk, gave a very comprehensive and long report, where he mentioned the city peculiarities, i.e. good geographic location, developed transportation infrastructure, high technological and personnel potential, a powerful construction complex. Industrial and staffing potential formed by the largest city enterprise - Production Company Mayak, and also by Close Company Yuzhouralsky Construction Unit, FSUE Uralsk Design-Research Institute VNIPIET, along with a number of special facilities, and about 25,000 qualified specialists, make the city a favourable place for investment

This is proven by the objective indices, e.g. the industrial production output is growing steadily from 2001 till 2004. The role small business plays in the city economy is getting more and more important. There are 574 small companies and almost 7 thousand private businessmen in the city. The speaker specified small business indices, investment volume in the main assets and the employment structure.

According to the Mayor despite the negative impact of the new social and economical environment, nuclear cities are still trying to stick to the development policy, which is focused on increasing the city competitive advantage, and making internal changes that will result in the city's potential growth and further development.

There are 5 projects currently funded in Ozersk, the status of which had been described earlier. Special emphasis was made on the project promising future, need in engineering personnel, high intellectual component in some of the projects, possibility to employ chemical engineers, technological engineers, who used to work at Production Company Mayak. The overall cost of the projects is over 1million pounds, with 56% provided by DTI.

With the general economical growth, the share of investment from the federal and local budgets is reducing. Thus, the increase of investment (by 44% during the last four years) demonstrated the growing investment activity of the private business in the city. In order to mitigate the negative impacts, for the last decade the local authorities have made every possible effort to diversify the city economy, to develop new companies, which are not directly involved with city-forming enterprise Mayak. The decrease of Mayak's share in the overall production output resulted from development of private small and medium-sized businesses. This argument is supported by the employment dynamics statistics, showing the growth of the employed in the private sector. At the same time, the fact that 31% of the working population is employed by the city-forming enterprise, demonstrates a constant threat of the possible unemployment outburst, given the limited possibilities to absorb the laid-off in the closed city. That makes CNCP's effort crucial for the city.

Possible areas for cooperation between the City administration and CNCP include grants, payment of interest rates, personnel training, assistance in making international business contacts and economic development.

Follow-on work is based on the city development priorities, including:

• Annual increase of industrial production output (excluding Mayak) by 3,5%;
• Maintenance of a stable development pace in Ozersk district;
• Increase of living standards in the closed city through guaranteed employment;
• Future achievement of non-subsidiary city operation in the new environment of inter-budgetary relations; and
• Retention of small and medium-sized business growth rate by at least 8% per year.

Seversk

Aleksander Ageev, the Head of the Science, Innovation and Entrepreneurship Support Department in Seversk City Administration shared the experience of the projects underway in Seversk. He outlined the three principle areas of cooperation with the CNCP Programme, i.e.:

• Training, with English training and seminars on diversification of regional economy being the main activities in this area;
• Financial support (grants), which is also sub-divided into two areas, i.e. projects of Siberian Chemical Combine and projects, initiated by city companies and entities; and
• Business Development Agency (BDA) - a partnership that brings Seversk City Administration, Tomsk Regional Administration, Management of Siberian Chemical Combine and CNCP together.

Future areas for joint work of the City Administration and the Programme include business support infrastructure development in the scientific technical field, i.e.:

• Assistance in setting up a Centre for Science and Innovation at Seversk State Technological Institute;
• Establishment of a city business incubator; and
• Creation of a venture capital/ revolving fund.

It is necessary to improve education system by conducting entrepreneurship training courses for students, working youth and schoolchildren, with BDA-Seversk, SSTI, and Tomsk Universities working closely together.

Sergei Blokhin, the Head of the Marketing Group in the Technical Development and Reconstruction Department at Siberian Chemical Combine, made a presentation of the areas of FSUE SCC's activity under the UK-Russian Nuclear Partnership Program. The opening part was devoted to the Combine, which is one of the largest industrial centres in Russia and is a city-forming enterprise in Seversk.

The forthcoming changes in SCC's structure will result in the lay-off of about 4,500 highly-qualified nuclear weapons specialists; therefore UK-Russian Partnership is very crucial. CNCP has been implemented in SCC since December 2003 through International Science and Technology Centre.

During the first stage the main goal was to conduct market research and analyses of the future projects related to SCC's production commercialisation. At this stage 8 conversion projects were proposed to the British side, 5 of which were selected for follow-on market assessment and sustainability analysis. These included:

1. Manufacture of electrolyte from Lithium Hexafluorophosphate for current sources;
2. Establishment of Nitrogen Trifluoride production;
3. Production of metal oxide powders with particles of less than 50 nm in size;
4. Establishment of Oxigen-18 isotope production;
5. Commercialisation of high-energy constant magnet manufacture.

The results on each of the projects have been assessed, summarizing which, it should be mentioned that the projects are implemented successfully; the customers and the product competitive advantages have been determined, the production set-up has started, and the equipment has been accepted. Budgets for these activities have large amounts. Thus, for the Nitrogen Trifluoride production project Rosatom provided $3.5 million, and an investment loan to the amount of $16 million was received in the bank.

The second stage of the Partnership is related to market research and business planning on the following large-scale projects:

• Joint venture Time Electronics-Seversk. The package of documentation has been prepared and is being reviewed by the Russian Government,
• Production of Boron-10 and ZrBr2 targets. The production is being prepared.

The Seversk Business Development Agency (BDA) project is being completed. The funding has been provided, the director selected, the personnel is being recruited. The ribbon-cutting ceremony for the BDA with participation of all the founders and the Board members is scheduled for July.

Summarizing the year's work, the Head of the Marketing group mentioned that CNCP helped SCC to:

• Avoid mistakes in selecting areas for the Combine's diversification;
• Improve the quality of market research and economic forecasts;
• Avoid funding inefficient projects; and
• Create or commercialise diversified, conversion productions.

In February 2005 at the joint meeting SCC proposed new projects to conduct market studies and business planning activities under CNCP. The proposals were followed by additional information on these new projects and their implementation timeframes. The projects were approved by DTI.

Zheleznogorsk

Sergei Usoltsev, Director of International Development Centre (IDC), CNCP Coordinator in Zheleznogorsk, gave a report about the progress of the UK-Russian Partnership in the city. The Programme started in May 2004, when 18 conversion projects were presented to evaluate their potential funding under CNCP. After a comprehensive review it was decided to continue work with 5 projects, 3 of which has already got the funding. The 5 projects include:

1. Expansion of Block Heating Units Manufacture. CNCP grant will be used to reconstruct the existing production facilities of OAO NPO MP Small Design Bureau, and increase the company's current production capacity of block heating units by purchasing new production equipment. The total project cost is about ?370,000; with DTI's contribution of ?200,000. The project will create 59 new jobs.
2. Expansion and Diversification of OOO Vermiculite's Manufacture. The funding will be used to procure high-capacity compressor units, will enable the company to start an additional line for exfoliated vermiculite production that is now being installed. The overall project cost is over ?190,000; with CNCP providing almost ?145,000. The project will create 28 jobs, 25 of which will be filled by former nuclear specialists.
3. Development of Metalworking Element Manufacture for Kraspan Ventilated Facade System. The base-line information was studied and technical audit was carried out. Currently the project is being developed where Kraspan will be able to attract almost half a million pounds with the DTI's support of only ?90,000. The project will create 123 jobs.
4. Creation of Feeder System Manufacture for Ground and Radio Relay Antennae. The project is initiated by ÎÀÎ NPO PM-Razvitie, proposing to purchase and install production equipment for flexible waveguide manufacture. The project is currently under review. The total project cost is ?535,000, with ?190,000 being requested from CNCP. The project expects to create 35 jobs.
5. Manufacture of Porous Non-Woven Bandages at Closed Company Kollakhit. These bandages are used in medicine and cosmetology and have improved economical characteristics and healing effect. Preliminary evaluation has been done and support has been given to organize meetings with potential partners. It is planned to refurbish the production facilities inside. CNCP contribution is ?200,000, with the total project cost being ?322,000. 13 new jobs will be created.

Personnel training is another area of CNCP's activity; and a number of important outcomes should be mentioned in this regards:

• The project on Organization of Distance Learning under LINK International Management Institute in Zheleznogorsk was reviewed and approved for funding. The training will be carried out at IDC-Zheleznogorsk. In April the first grant money was received. The total grant is about ?18,000.
• In April a group of 15 students completed training in Professional Manager Certificate Course; 11 students from this group continued their training in the Diploma Course. Applications are now being gathered for a new Certificate Course group.

In order to expand the city's information environment, which promotes effective interaction of companies and private entrepreneurs, a project called Creation of Zheleznogorsk Business Portal was developed. The funding started in April. The overall grant is over ?11,000.

To promote commercial links and partnering between Zheleznogorsk and UK businesses, a trip to Great Britain and Germany was organized for a Zheleznogorsk-based company OOO Siberian Electronic Technologies under project Integrated Manufacture of Pre-insulated Pipes from Radiologically-Treated Polyethylene PE-Xc. The trip was funded by CNCP.

Sergei Usoltsev outlined future plans in all the Programme areas. Thus, 13 new projects have been proposed for potential funding.

Special emphasis was laid on the programme to encourage potential entrepreneurs to leave MCC for private business. The goal of the program is to mitigate the barriers that keep MCC specialists from leaving the nuclear complex going to work in the private business sector. The goal is achieved by introducing an entrepreneurship support program. Additional attention was given to Commercialisation of High-Level Nuclear Waste Handling Technologies. MCC has considerable experience in development, manufacture and operation of the equipment used for mobilization and withdrawal of high-level wastes from the storage tanks.

Russian and foreign companies and institutes (Rosenergoatom, Kursk Nuclear Power Plant, Smolensk Nuclear Power Plant, BNFL (UK), US DOE sites, AECL (Canada), and Florida University) expressed their interests in these products and services.

In the area of personnel training it is planned to conduct English language training for MCC mangers and specialists. The training will be attended by 10-15 managers of different levels potentially capable of managing projects aimed at commercialisation of MCC's technologies and experience in various spheres of the company's competence, i.e. handing of radioactive waste, nuclear materials and spent nuclear fuel, facilities decommissioning, technological servicing, engineering services, and communications.

And, finally, to support the overall city business development, it is planned to introduce ISO 9001:2000 standards, which will enable the city to reach the contemporary level in planning, development of evaluation indices, mastering modern information technologies in governmental and municipal management.

Vladimir Shalaginov, Deputy Mayor of Zheleznogorsk and Alexander Markov, Leading Engineer of International Project Group at Scientific Technical Centre of FSUE Mining and Chemical Combine, supported what Sergei Usoltsev said and appraised the Programme activities and achievements in the city.

Sarov

Gennadiy Sosnin, Head of Industrial Partnership Department at Centre for International Relations, RFNC -VNIIEF, briefed the audience about the Programme status in Sarov.

First working meetings between representatives of VNIIEF and CNCP took place back in 2002. Initially 20 projects that had been previously considered by ISTC were submitted for CNCP review. Three projects were approved; and additional market research and business planning activities were conducted for these projects. Later on, three additional high-tech projects were proposed, but they were rejected by the British side, because they required large amounts, i.e. from $$405,000 to 600,000 USD each.

Currently VNIIEF is preparing a proposal on another project, i.e. Creation of Composite Product Manufacture. 1.18 million dollars has been invested in the project in 2003-2005. US Company Advanced Composite Structures Inc. is the partner and the consultant. During this period of time a production area has been set up, and the production has started; the company has identified its market. One production machine will not be able to meet the market demand, therefore it is necessary to expand the production, and thus additional investment is needed.

Gennady Sosnin analyzed the proposal submission mechanisms in CNCP and ISTC and suggested that the format of the proposal should be made similar to the ISTC proposal, but not so long. Then the speaker outlined the implementation mechanism of marketing project GEO Information System as a Key to Safety of Engineering Communication at Nuclear Power Stations. The project was implemented by RFNC -VNIIEF specialists in close cooperation with research-consulting company ALT (St. Petersburg) and Technology Market Strategies (UK). The main challenges in the project were caused by high-tech component in the project that required special knowledge. Nevertheless, a large volume of information about foreign and Russian markets has been gathered, classified and analyzed. Experts among potential customers, manufacturers, scientific research institutes, governmental entities and field organizations were interviewed, and future competitive position was developed. As a result, the project was successfully completed and helped view many marketing issues from a different perspective, and transfer results of theoretical surveys into practice. In August 2004 the Programme management expressed their interest in continuing the works on GEO information systems for nuclear power plants, but the final decision has not been made yet. The speaker pointed out that nuclear power plants are still interested in the introduction of GEO information systems, but the results of the research very quickly lose relevance.

Then Mr. Sosnin mentioned VNIIEF's participation in the training programmes conducted by CNCP. He reinforced good organization of the process by P-E International and its high effectiveness.

Projects for future cooperation under the Programme lie in the traditional areas:

• Use of opportunities to attract investment and jointly commercialise technologies developed within the frameworks of the CNCP Programme;
• Attraction of European partners to co-fund research, developments, manufacture and services in the civil sector;
• Development and expansion of training programmes.

The second report on Sarov's innovation development was made by Sergei Ratkevich, Deputy Head of the City Council, Coordinator of International and External Business Activity.

In the preamble he pointed out the important role science cities and closed cities play in the creation of a national innovation system in general, since they have high scientific, technical, educational and production potential. Such territories have all the preconditions for development of knowledge-intensive productions, increase of competitive products output, which, in its turn will result in proper living standard for citizens, maximum employment in highly-qualified productions, and diversification of both businesses and education one can get in a science city.

According to the speaker, lack of service infrastructure, ineffective marketing, deficit of qualified personnel and lack of venture capital funds are the main barriers between the innovation ideas manufacturers and their potential customers.

ü Contradiction between a high scientific-technical potential and low demand for innovation. Ideas and technological know-hows are in the R&D stage and do not form an attractive product or service (the proposal is poorly packaged);

• Imperfection of the existing innovation activity infrastructure (e.g. it is difficult to solve the intellectual property right issues), and it is extremely difficult to use intellectual property created at the expense of the federal budget, as it is too much bureaucracy and very little market initiative);
• Lack of unified information environment; and
• Insufficient use of small business opportunities.

Unified innovative activity management system, established in Sarov consists of four centres, which are coordinated with each other:

• Innovation Activity Development Centre in the Form of a Non-Commercial Fund;
• Educational-Scientific Centre of Rosatom (a successfully operating entity; the sales in 2004 were about 5.4 million roubles);
• Financial Support Centre of Innovation Projects (Nuclear Partnership); and
• Innovation and Technological Structures of SarIPT and VNIIEF.

It is necessary to keep in mind governmental priorities, determined for the closed city in the long-term perspective. These include:

• Information - telecommunication technologies and electronics;
• Fuel and power engineering;
• Production technologies; and
• New materials.

Given the above-mentioned the speaker presented a large number of promising projects, part of which had been started had received initial funding under START programme, but still require additional funding for effective development. It is necessary to conduct a series of assessments for another part of the projects.

Then the speaker talked about organization of innovative activity training for specialists, including managers, who will manage technological innovative projects. With Sarov having Educational Physical Technological Institute in the city, it is able to train the required personnel for specific projects. On the average, a company needs 2-3 key specialists, i.e. a manager and specialists on the principle areas (engineers, designers, etc).

Based on the presented information a conclusion can be drawn that ZATO Sarov, as a territory of innovation development has all the essential components, i.e. educational and scientific basis, promising R&D works, governmental support and desire to become successful.

That was the end of Day 1.

The second day was devoted to mechanisms of local economic development used by the CNCP Programme and the Programme's cooperation experience with nuclear centres in Kazakhstan, Uzbekistan and Ukraine.

The principle report on this topic was given by Charles Monck, CNCP Economic development specialist.

In his report Mr. Monck first presented the key structure of a balanced economic development. The structure includes such interrelated components, as enterprises, physical resources, human factor, infrastructure and environment, which form a social aspect, employment and the quality of life. Dominance of one employer is the peculiarity of the closed cities, and this is proven by the statistical data. Thus, in the six analyzed closed cities, a city-forming enterprise employs from 27% (Seversk) to 52% (Sarov) of the working population. The cities now have strengths and weaknesses. The strengths include:

• Leading technologies;
• Small but growing base of successful small companies;
• Skilled and well-educated workforce;
• Good security from the point of physical closeness of the territory.

At the same time the following factors have a negative impact of the city's economy:

• Excessive dependence on one key employer;
• Too few managers with experience in commercial sector;
• Limited support for new business development; and
• Isolated from the regional and national economy.

Thus, the cities have potential opportunities to create new commercial enterprises, develop business activity, get access to business information, consulting and training, get access to Russian and foreign markets. But it s very important to keep in mind potential threats, which include:

• Over-dependence of economy on one principle employer;
• "Imports" from outside;
• Migration of people with entrepreneurial talent;
• Reduction of governmental resources available to closed cities; and
• Lack of a dynamic economic development strategy.

The speaker discussed the main tasks CNCP has in the sphere of new job creation for former nuclear specialists. Possible solutions include new commercial projects and new developing businesses, which are spun out from the defence institution, growth and diversification of existing companies, and attraction of external investment projects.

Talking of mechanisms to fulfil these tasks, Charles Monck agreed with the previous speakers, reinforcing the need of entrepreneurship development, training and consulting of managers and support staff, market research and financial assistance. It was mentioned that these mechanisms can only be effective with the support and participation of city administration; therefore it is necessary to improve skills of the city managers, help with city's economic development strategy and conduct training on assessment, research and monitoring.

In conclusion, Mr. Monck drew the audience's attention to CNCP's priorities in the area of assistance to the closed cities with the economic development. These include:

• Increase of the city leaders' awareness by organizing study tours;
• Support of business development centres, i.e. new BDA in Seversk and IDCs in Snezhinsk and Zheleznogorsk;
• Promotion of entrepreneurship, which will result in the increased number of sustainable new businesses;
• Assessment of the commercial potential of new technological developments in order to use them in the production;
• Investment grants and attraction of new investment by, in particular, publishing the information in the Internet;
• Assistance in getting access to the markets by providing support for market research and joint ventures with foreign entities.

Charles Monck gave most of his time to the report on BDA Creation, given by Victor Sukhoveev, Director of Business Development Agency (BDA) - Seversk. Charles mentioned that BDA creation is a good example of DTI's assistance to a closed city in its economic development.

BDA, founded in November 2004 by ZATO Seversk City Administration of Siberian Chemical Combine, works closely with the project initiators, helping prepare presentations and develop brief proposals for funding. The list of projects includes such projects, as Manufacture of Hydro-Massage Mini-Pools, Children Cafe Establishment and Development of Optical Television Control and Diagnostics Systems.

In general, BDA shall help achieve the following aims:

• Support and promotion of entrepreneurship;
• Assistance in investment attraction;
• Creation and development of infrastructure that promotes the investment process; and
• Use and development of scientific-technical and production potential.

There are three main areas in BDA's activity, i.e. development of a business services market, information services and organization of training seminars and workshops.

Initially the Agency will focus on information services, assistance in searching for funding sources and consulting in the areas of marketing research, business planning, business financial analysis and preparation of assessment reports for investors.

The speaker mentioned the future areas and tasks for CNCP in Seversk, which form BDA's strategic goals:

• Participate in the update of the local normative-legislative basis regulating entrepreneurship activity;
• Build a positive image of entrepreneurship in the society;
• Support new entrepreneurs, including personnel laid-off from SCC;
• Use of inefficient or empty facilities in the commercial sector;
• Commercialise innovative and high-techs projects;
• Promote products manufactured by enterprises of ZATO Seversk in the interregional and international markets by using the resources of Tomsk Chamber of Commerce;
• Conduct research on the rationale and viability of establishing Business Support Fund - Seversk to introduce advanced lending investment mechanisms, including leasing and venture investment.

Zoya Mikhitarova, Project Officer of ISTC Secretariat, made a presentation on the cooperation between ISTC and CNCP.

Having outlined the ISTC goals, she made an overview of the Centre's operation, with the science project and partner programs being the key activities, alongside with commercialization support programs, training programs, information, organizational and patenting support.

Currently 7 partner ISTC-CNCP projects are underway, with the overall funding amount of 1.7 million dollars; with 260 specialists being involved, including 80 former nuclear specialists. 3 projects are now being prepared, i.e. initiated by VNIITF (Snezhinsk), Institute of Nuclear Physics (Almaty) and National Nuclear Centre (Kurchatov); 2 projects are being implemented, including those of VNIITF (Snezhinsk) and SCC (Seversk); and 2 projects have been completed, i.e. RASTER- Technology, (Snezhinsk) and VNIIEF (Sarov).

ISTC helped organize the First Annual Conference CNCP-Kazakhstan, Ukraine, Uzbekistan, held at Institute of Nuclear Physics, Almaty in March 2005.

To be able to identify the possibilities for the Programme's expansion, ISTC with its regional affiliate offices organized site visits to several institutes and government agencies in Armenia and Georgia for CNCP representatives in May 2005.

Though ISTC has significant experience, there are ways to optimize the its operation, e.g.:

ü ISTC involvement into the processes of project proposal development from initial stages, which will decrease the number of approval procedures and reduce time needed for registration and document processing at ISTC;

• Optimization of equipment purchase by ISTC during project implementations, etc.
• The following steps were proposed for the future ISTS/CNCP partnership:
• Sign a Framework Memorandum of Cooperation;
• Jointly participate in commercialization initiatives (providing assistance in production development by Beneficiaries, contributing to the creation of technoparks, local centres for business development, etc.);
• Jointly organize training courses; and
• Search for new projects, institutes, regions to attract them to the Partnership activity.

Aleksei Vladimirskiy, Representative of National Nuclear Security Administration at US Department of Energy briefed the audience about the status and the directions of the future development of US Nuclear Cities Initiative (NCI).

US side has gained considerable experience in solving tasks, similar to those faced by CNCP, since NCI and Initiative for Plutonium Prevention (IPP) had been in progress for a long time. Good results had been achieved in the course of these initiatives implementation. Thus, working relations were established with the top-management of the Russian entities and organizations, over 16,000 scientists are engaged, over 300 million dollars had been invested and over 3,000 civilian jobs for former defence personnel had been created. Great progress is achieved in Sarov, Snezhinsk, and Zheleznogorsk

It is planned to continue these activities, negotiate a new long-term Government-to-Government Agreement for NCI, and support professional retraining and employment of specialists, laid out from the nuclear complex in the result of the planned shutdown of plutonium-producing reactors in Seversk and Zheleznogorsk

The speaker briefly mentioned a number of large joint projects in such fields, as medicine, information technologies, and industrial material manufacture.

Summarizing the existing challenges, Alexei Vladimirskiy pointed out the necessity to increase efforts in preventing proliferation of mass destruction materials and technologies, addressing the issue of reactor shut-down in Seversk and Zheleznogorsk, solving environmental problems and challenges related to the legislature, especially in taxation.

NCI sees the following areas as top-priorities in solving these problems, i.e. active cooperation with Russian partners, a new NCI long-term GTGA, use of Global Partnership's leverage resources and a strategic program for workforce transition in closed cities.

NCI accomplishments in the industrial partnership could be backed with the following data: 156 projects are underway, with 68 projects being in active stages in closed nuclear cities with 26 businesses started or expanded as a result of NCI support. 1,600 jobs have been created; over 500,000 sq. feet have been converted for commercial applications and have made the basis for new civilian businesses.

Training has been developing with economic workshops organized. 2 business centres have been started under the Programme.

The series of final reports were devoted to CNCP cooperation with nuclear centres in Kazakhstan, Uzbekistan and Ukraine.

This series of reports was opened by Ivan Karnaukhov, Deputy Director of Kharkov Institute of Physics and Technology (KIPT). Having briefed the conference participants about the history of the Institute and its role in establishing Soviet nuclear science, the speaker mentioned that brining the technologies developed at KIPT into production in Ukraine is challenging for several reasons. One of the reasons is absence of experience in commercialising scientific and technological developments and establishing profitable productions. In this regards, the initiative of the UK Department for Trade and Industry to introduce CNCP in Ukraine, was extremely helpful.

At the first stage of CNCP-KIPT cooperation, over 20 technologies were proposed. These technologies covered nearly all KIPT's scientific activity areas and met the Programme's objectives and selection criteria. As a result, three projects were selected, i.e.:

• Use of Beryllium Distillation Technologies for Beryllium Foils Manufacture;
• Production of Prostheses for Cardio Surgery from Tantalum, Titan and Stainless Steel;
• Application of Ozone Technologies for Used Car Tire Recycling.

At the second stage market research and business planning activities should be made on each of the projects. At the same time, CNCP representatives offered their assistance in attracting professional consultants to ensure project support and to provide training for KIPT specialists in marketing basics, management and international accounting standards. These people could form the basis for the department responsible for scientific developments in KIPT.

Such understanding of KIPT's problems by English experts and an integrated approach to their solution inspired optimism in the Institute management and specialists directly involved in the project implementation.

There were two speakers from Kazakhstan. Albina Borisenko, Chief Engineer of Nuclear Medicine Project, Institute of Nuclear Physics (INP) of Almaty.

CNCP started working with INP for a short period of time; the first meeting took place in 2003, and in 2005 the Institute proposed 12 projects within the key commercial activity areas, i.e.:

• Radioisotopes Production;
• Radioecology and Nuclear-Physical Analytical Methods;
• New materials and Devices; and
• Radiation Processing of Materials.

Then Albina Borisenko gave a more detailed overview of the projects supported by the CBCP Programme. These are:

1. Production of Sealed Radioactive Sources for Medical and Industrial Applications. A detailed analysis of Kazakh market is being done to determine the key customers and the most demanded sources. It is necessary to develop a plan of production creation given the required expenditures and expected commercial outcomes. A list of companies that use sealed radioactive sources has been made. The range of companies is quite wide and that ensures the project's success. It is planned to consider the opportunity to provide a complex service, from manufacture of the ordered source to its utilization after the active operation time. That might give the Institute a considerable competitive advantage in the internal market.
2. Creation of Neutron Activation Samples Analyses Site for Kazakhstan industry. The goal of the project is to organize large-scale analytical servicing using the above-mentioned method to meet the needs of Kazakhstan geological and environmental enterprises. The method ensures extremely high sensitivity level, i.e. -10-4-10-8 %. The planned production capacity makes up to 10,000 samples per year. The expected number of new jobs created is from 15 to 50.
3. Establishment of Hydro-gel Medical Bandages Production on the Basis of Electron Accelerator ELV - 4

As a result of polymeric components cross-linking under radiation, the initial mixture turns into transparent elastic water-insoluble jellylike gel. The hydro-gel bandages based on this material are used for burns, gun-shot and explosion wounds, bruises, etc. They are very effective in healing trophic ulcers and bed-sores. 14 people will be engaged at the pre-production stage; it is planned to employ 12 people at one-shift operation and 20 at two shifts. Special attention in the Partnership is given to the creation of Nuclear Medicine and Bio-Physical Centre in Almaty. At this stage intellectual support is provided by information and experience exchange, assistance in designing, planning of the Centre's activities and services. Potential cooperation in the staff training is being discussed. The final part of the report was devoted to business training, including participation of INP's specialists in one-month Business English course, held in Great Britain; study tour to the UK to get exposed to the experience in technology commercialization and in the creation of sustainable businesses; training courses in marketing, business planning and project management, being currently attended by 16 INP specialists. In conclusion the speaker gave a very optimistic appraisal of the expected outcomes of cooperation with CNCP. Ms. Borisenko expressed confidence in the creation of effective businesses and sustainable new jobs for former nuclear specialists in the civilian sector of Kazakhstan's new market economy.

The second report of Kazakhstan's representatives was on a large project Nuclear Technologies Park in Kurchatov, given by Victor Dzalbo, the Park Director.

First, the legislative constituent documents, from Kazakhstan President's Decree About National Nuclear Centre and Nuclear Energy Agency, Republic of Kazakhstan to several Minister Cabinet's decrees were reviewed.

The main areas of conversion activities at National Nuclear Centre include:

• Decommissioning of Semipalatinsk nuclear testing ground infrastructure and other facilities of Kazakhstan nuclear industry, decommissioning of BN-350 reactor
• Participation in scientific research programmes on nuclear safety and then on thermo-nuclear power (construction of material testing Tokamak KTM); and
• Establishment of Nuclear Technologies Technopark in Kurchatov.

The Technopark is created to achieve a series of objectives, including:

1. Support and development of the national "nuclear competence";
2. Establishment and operation of up-to-date power reactor facilities;
3. Sufficient staff for Kazakhstan nuclear science and industry;
4. Development of new knowledge-intensive nuclear and adjacent technologies, their industrial application and foreign markets penetration;
5. Social and economic development of the former Semipalatinsk testing ground region.

At the initial cooperation under CNCP that started in December 2004, a working meeting was held to get exposed to the Nuclear Institute departments and Technopark. The meeting was followed by a feedback on the Technopark's feasibility study prepared by CNCP experts and a conference held in Almaty in March 2005.

The second stage dealt with a comprehensive market research of the three selected Technopark's innovative projects, i.e.:

• Development and production of X-ray diagnostics systems;
• Gas-dynamic pipe line cleaning; and
• Neutron-capturing therapy.

In May 2005 a meeting of CNCP experts with NNC RK specialists was held in Kurchatov, followed by the participation of Technopark Project manager in the Study Tour to Great Britain.

Currently an ISTC project on market research is being prepared and training programmes for nuclear specialists in Kazakhstan Institute of Marketing and Management are planned. NNC specialists visited Great Britain to study the experience in establishing technoparks and commercialisation of nuclear technologies.

The last report was given by Uzbekistan representative Ilkham Sadykov, Laboratory Head at Institute of Nuclear Physics (INP). He started with a presentation of his Institute, which is the largest scientific centre in Uzbekistan. Unique for Central Asia nuclear units were introduced at Institute of Nuclear Physics, i.e. Reactor WWR-SÌ, pool-type Gamma facilities, and cyclotrons. A heavy-ion accelerator is being built at the Institute. INP has daughter enterprises that manufacture isotopes and isotope-based products, and an experimental plant. 14 international programmes and grants are being carried out.

The Institute started working under CNCP in September 2003, and has been cooperating closely on various projects. During this period 15 projects have been submitted for review; market research has been started on the three most promising projects, including Energy-saving Technologies of Water Treatment, Decontamination and Desaltation; Radiation Coloration of Precious Stones and Technology of Sealed Gamma-Radiation Ñî-57 Sources Manufacture. 24 employees are being engaged in the market research, including 13 former nuclear specialists. CNCP provided 30,000 pounds for these activities.

The speaker drew the audience's attention to the fact that nuclear institutes had lived in one large market till recently, and INP specialists had not done market research and had not had such experience, especially in the frameworks of international projects. Therefore, the courses and study tours organized by P-E International in Great Britain in February and May of 2005 were extremely helpful. Special emphasis was laid on the study tour to Oxfordshire, which gave an opportunity to study the UK's experience in commercialisation of scientific developments.

In conclusion, Ilkham Sadykov expressed his gratitude to the CNCP Programme and wished them success in their honourable mission.

After the reporting part was completed, the issues that raised special interest were discussed. The succession in the Programme management was mentioned. Many participants made compliments to P-E International, which is CNCP managing company and conference host.

At the end of the conference CNCP management on the British and Russian sides, as well as other participants made short speeches where they mentioned the success of the conference and satisfaction with the outcomes.