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Federal government formally offers AECL reactor division to bidders

OTTAWA - The federal government is formally inviting offers as it seeks to privatize the nuclear reactor division of Atomic Energy of Canada Ltd.

OTTAWA - The federal government is formally inviting offers as it seeks to privatize the nuclear reactor division of Atomic Energy of Canada Ltd.

In announcing the request for "investor proposals" Thursday, Natural Resources Minister Lisa Raitt pitched the sale of the heavily subsidized Crown corporation as an environmentally friendly, emissions-free buy in a global market experiencing a nuclear renaissance.

The reactor division, said Raitt, "needs strategic investors to take full advantage of this opportunity, strengthen its global presence and reduce the financial risks carried by taxpayers."

She touted Canada's nuclear industry as employing 30,000 people and said the government is "committed to making sure these jobs are retained and more are created."

The research-and-technology division of the Crown corporation, including the Chalk River laboratories and its troubled medical isotope production, are not part of the government sale.

The Conservative government announced last May it would put parts of AECL on the block, after a National Bank study it commissioned found there was "significant private sector interest" in a stand-alone CANDU reactor business.

AECL has a profitable international service operation, with 18 CANDUs currently working or being refurbished around the world.

Prime Minister Stephen Harper finalized an agreement with India on civilian nuclear technology co-operation late last month during a Commonwealth summit in Trinidad and Tobago. Some market observers feel the Canada-India deal could boost the reactor refurbishment side of AECL. India has developed its own expertise on heavy-water reactors during the 30-year hiatus since Canada helped India attain nuclear capability.

India went on to use Canadian technology to help build a nuclear arsenal, which soured the relationship for a generation.

Several companies have expressed tentative interest in buying a piece of AECL, including Montreal's SNC-Lavalin and Areva Group of France.

However the government may have undercut its own bargaining position when Prime Minister Stephen Harper's chief spokesman described the Crown corporation as a "dysfunctional" $30-billion "sink-hole" last June.

That same month, the Ontario government put off a decision on new reactor construction after deciding all the bids - including one for an untried, next-generation AECL reactor - were too costly.

Ontario is the biggest customer of CANDU technology and the province is also home to the bulk of the AECL supply chain. As such, an Ontario purchase of the ACR 1000 is deemed critical to the launch of AECL's next-generation reactor fleet.

Earlier this week, the Alberta government announced it was open for nuclear business, while stressing it would not be publicly subsidizing reactor construction projects or their subsequent energy sales.

And Saskatchewan announced Thursday that it will put off nuclear power generation aspirations for the next decade and instead will continue to focus on the uranium mining business and nuclear research.

Outside Ontario, AECL has a single CANDU reactor in Quebec and one in New Brunswick. Both are in the process of undergoing billion-dollar refurbishments.

 
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