JE' Ce r n an Co n jnzrn- Cancels 1W aclear Contract fl>itft Iran Renter TEF -IflAN, July 31—The West Ger- man Company iCraftwerk Union today formally terminated its contract to build two nuclear power stations for iran near the Persian Gulf port of Bu- shehr. a company spokesman said. Iran has already spent $3 billion on construction of the two 1.200-mega- watt plants. Though more than half completed, the facilities could be ruined within six months unless the Iranians maintain the site properly, according to the Kraftwerk spokes- man. - The spokesman said the company has preparing to claim at least $550 million to cover its losses. in political developments, Iranian authorities today released 16 Kurdish hostages captured by Islamic Revolu- t ionary Guards during recent fighting in Marivan in northwestern Iran as thousands of angry }Curds closed in on the town. A procession of about 5,000 Kurds. wearing traditional costumes and es- corted by armed guerrillas, ap- proached Marivan after marching 75 miles from the provincial capital of Sanandaj to demand the hostages' re- lease. Marvin. near thc Iraq border, was nearly deserted. Most of its 20J100 kurd ish inhabitants have been camped in the surrounding hills since fighting between Kurclish guerrillas and the Revokutionary Guards broke out there eatlier this month. - The Iranian authorities have been ne- gotiating wijJi the Kurds and the Rev- olutionary Cuards in Marivan over the last few days to avoid any further clashes in the tense Kurdistan region.