Memorandum from Biagosch to Klaus Barthelt, 'Nuclear Power Plants Iran; Here: Call from ORR Kaye, BMFT; Meeting Today with Dr. Arabian'

[Internal Communication]

From: KWU^[1]/KVF 2

Biagosch

To:

Mr. Barthelt^[2]

Erlangen^[3]

Frankfurt, 3 September 1974

Bia/sz

Nuclear Power Plants Iran

Here: Call from ORR^[4] Kaye, BMFT^[5]

Meeting today with Mr. Dr. Arabian

Mr. Kaye, who is involved in preparations for the visit of Dr. Etemad^[6], called me yesterday to inquire about the status of our enrichment negotiations in the USSR. Furthermore he wanted to know, whether regarding the Iran issue URENCO^[7] has been approached from our side; since the BMFT is expecting Dr. Etemad to ask for back-up guarantees in case Russian deliveries do not materialize. According to his [Kaye] opinion, such  a back-up guarantee means at the same time also the use of the German stockpile.

I have referred Mr. Kaye on this entire enrichment issue to Mr. Dr. Hildenbrand without making comments myself. Since Mr. Dr. Hildenbrand was not available yesterday, I asked Mr. Klein by phone to inform Mr. Dr. Hildenbrand about the call [from Kaye] and to ask him to call Mr. Kaye back.

Otherwise I had today a longer talk with Mr. Dr. Arabian who had interrupted his flight to New York for a couple of hours here [in Frankfurt].

Mr. Dr. Arabian informed that, upon request by Mr. Dr. Etemad, he will be participating in the latter’s entire visiting program [to West Germany] from 23 September until probably 28 September 1974. From today’s perspective, a separate program for himself [Arabian] is thus not foreseeable.

Asked by me about his impression after reading our proposal as well as the technological offer, he said one was extraordinarily surprised about the quality and depth of both documents, especially so in light of the short time available; he also said that Dr. Etemad had extensively informed the Shah about it.

According to the impression of Dr. Arabian, all signs for us are standing on Green. In addition to the trust we would have gained ourselves, one is completely annoyed by the French with whom Dr. Etemad has suspended the dialogue (reason: the French argue with the viewpoint the purchase of 5 nuclear power plants from them had been adopted, so that there is not reason to have longer discussions about technology and conditions. Dr. Etemad had explained to the Shah that he is not willing to negotiate on this base and was met with the full understanding of the Shah on this matter).

Regarding the activities by Westinghouse, Dr. Arabian just said laconically “they had their chance”. Talks with WE^[8] are currently no longer held. Except for the extensive but hardly informative technological offer by Aseatom, one now does only still study the proposal from KWU and is prepared to now build the first facilities with us. A critical aspect remaining in his opinion is just a satisfactory course of talks in Bonn, especially regarding the enrichment and the possibility of German administrative support for pricing review. If in these regards a positive agreement will be reached, from his perspective the order with us for the first 4 facilities would be safe.

After recent considerations, the subsequent facilities would already reach the 1000 to 1200 MW [Megawatts] range.

He is recommending to establish contacts concerning issues of cooperation in Iran with the INECO (Iran Nuclear Energy Company), which according to his knowledge has just been founded by Mr. Mahvi^[9].

At the end, he offered the private recommendation not to stretch the patience of his agency [AEOI] too much with follow-up requests regarding site inspection, asking for other drawing scales, et cetera. He would deem it useful if we ourselves send experts to Bushehr so that they obtain an impression on site.

Also, our price offer should be based on the assumption that the Agency will of course negotiate over additional costs, if the assumptions would turn out as incorrect.

KWU/KVF 2

[handwritten signature]

Biagosch

CC:

Mr. Dr. Frewer

Mr. Hirschmann

Mr. Dr. Sutholt

Mr. Sauerwald

Mr. Dr. Keller

Mr. Dr. Hildenbrand

Mr. Schirnack

Mr. Helke

Mr. Killer