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Russia: St. Pete Officials Sign Deal With Iran

St. Petersburg, 20 May 1999 (RFE/RL) -- Officials from the Russian city of St. Petersburg have signed a first-ever economic agreement with Iran.

The agreement will allow for expanded cooperation in the fields of shipbuilding, engineering and nuclear energy.

The deal follows a visit earlier this month by a city delegation to Iran for discussions with leading officials, including the Vice President for Atomic Energy Qolam Reza Aqazadeh-Khoi.

At a press conference this week in St. Petersburg held to announce the agreement, Deputy Governor Vladimir Grishanov said Iran was impressed with what the city has to offer, especially in the field of nuclear technology. An Iranian delegation is expected soon in St. Petersburg to explore further areas of cooperation.

Several St. Petersburg companies are already doing significant amounts of business with Iran. Electrosila recently signed an $18 million contract to supply power generators for Iran's Bushehr nuclear power station. The company Izhorsky Zavod has signed a $44 million agreement to supply one reactor to the station.

In the coming weeks, the Leningrad Metal Factory is expected to sign a contract worth tens of millions of dollars to provide Bushehr with turbines.

Officials have also singled out other areas of high technology offering potential for cooperation, including aviation, electronics and rocket technologies. No details of any concrete deals in these fields were provided.

Anatoli Krotov, a St. Petersburg official from the Committee on Economics, Investment and Industrial Policy, says Iranians are eager to do business because they see St. Petersburg as a major industrial and scientific center.

Correspondents say the agreement will offer the prospect of much-needed hard currency for Russian companies. However, the deals have also raised suspicions in the West that Russian firms may be passing on valuable military and nuclear technology.

U.S. officials have accused Iran of developing a covert nuclear weapons program and have cited Russian cooperation in the past as a major source of the technology. The U.S. has gone as far as to blacklist 10 Russian research institutes, including St. Petersburg's Baltic State Technical University, for alleged military cooperation with Iran.

Both Iran and Russia have denied the allegations.

St. Petersburg officials say none of the technologies covered under the cooperation agreement have military applications.

Valentin Makarov, the deputy chairman of the city's Committee for External Relations, says no technology with potential military applications would be sold to Iran. He says the city has controls to prevent the transfer of such technology.

He says all military equipment for export goes through the state-owned company Rosvooruzhenie.

City officials say the cooperation agreement should not be seen as exceptional because Russian-Iranian relations go back several centuries.

They also say such agreements are to be expected since Iran prefers to do business with Russia instead of the West.

Officials, on the other hand, say securing credits to finance bigger projects remains a major stumbling block. In this respect, they say, Western companies still have an advantage.