Nuclear Safety

In March 1994, the Export-Import Bank guaranteed a loan of $317 million for work done by Westinghouse Electric Corporation on a nuclear power plant in the Czech Republic. The project entailed integrating Western technology into a Soviet-designed pressurized water reactor. Although U.S. officials saw an opportunity to gain more than $330 million in U.S. exports and to make the reactors safer, the Austrian government and some Members of Congress have expressed concern about the safety of the Soviet-designed reactors and the extent of potential U.S. liability in the event of a nuclear accident. This report discusses (1) the reasons for the Export-Import Bank's loan guarantee for the nuclear power plant, (2) the steps the Export-Import Bank took to ensure the project's soundness, including the project's safety; and (3) the U.S. government's potential liability as a result of the Export-Import Bank's loan guarantee.

GAO found that: (1) U.S. government officials believe that Western technology can make the Soviet-designed Temelin reactors safer, provide more than $330 million in U.S. export earnings, and contribute to international economic goals; (2) U.S. experts concluded that the least safe Soviet-designed reactors should be shut down as soon as possible and that other reactors should be upgraded to acceptable safety standards; (3) Eximbank evaluated the project's technical and commercial feasibility, capital cost and schedule estimates for the project, and the project's environmental effects; (4) the National Security Council confirmed for Eximbank that the Czech nuclear regulatory body met applicable criteria for regulatory competence; and (5) Eximbank concluded that there was only a remote chance that it would be held liable for damages in the event of a nuclear accident at Temelin.