I don't recall the Harper campaigning on the sale of AECL to a private investor.
Buyout under discussion, sources say
Areva interested in our reactor business
Jun. 21, 2006. 05:10 AM
France's state-owned Areva Group, the world's largest nuclear company, has had discussions with Ottawa about the possibility of acquiring the commercial reactor business of federally owned Atomic Energy Canada Ltd., the Star has learned.Sources say Areva has expressed an interest in AECL's Candu reactor business and that a sale to the French nuclear giant, which had $14 billion in revenues last year and touts a global workforce of more than 58,000, has been entertained by Ottawa.
"There has been discussion," said one former high-ranking nuclear industry official, adding that talks were as recent as last month. "The Candu technology is something they have a lot of interest in. If I'm Areva, I'm going at them hard right now."
AECL has been the epicentre of Canada's nuclear industry for more than 50 years. Its technology is behind the construction of 22 nuclear power reactors across the country over the past four decades, most of them in Ontario where the crown corporation's workforce is approaching 4,000.
But AECL is now at a crossroads, experts say. The latest talks come as Ontario embarks on a controversial plan to build two new nuclear reactors to rejuvenate its aging power system. If Queen's Park selects a foreign supplier, or decides to purchase current generation Candu 6 technology, plans by the struggling nuclear company to sell its next-generation Advanced Candu Reactor overseas are likely sabotaged.
"If I'm the current prime minister I'm thinking, `How the hell am I going to get an Advanced Candu Reactor built unless I get it built in Ontario?" said the industry source. "If Areva took (AECL) over, they would have the financial wherewithal to say, we can build it here, here and here."Under proper terms, a sale to Areva could keep jobs in Canada, prop up Candu technology in the global marketplace, and shift the risk of new reactors in Canada from taxpayers to a large foreign company, the source said.
Ottawa has explored the privatization of AECL's Candu reactor business before, most recently in 2002 when the then-Liberal government hired BMO Nesbitt Burns to study the idea.Ontario Energy Ministry Dwight Duncan has said the province, while it prefers to select home-grown technology, is open to choosing a foreign provider if it means the best deal for taxpayers, who still harbour memories of delays and cost overruns at Darlington.Mike Richmond, an energy lawyer with McMillan Binch Mendelsohn, said a sale to Areva could fly politically if it was properly crafted and if Ottawa retained ownership of its prized Chalk River laboratory, AECL's major research and development arm.
"I don't think you'd see the same kind of uproar as you did when the Ontario government tried to sell Hydro One," said Richmond. "It's more a matter of national pride than an economic concern. The federal government would want to put conditions on such a sale to make sure some of the long-term benefits stay in Canada."
Tom Adams, executive director of Energy Probe, said the federal Conservative government may find that a sale of AECL is easier to swallow politically than a decision to subsidize new reactors in Ontario."Looking at it from their (Tories) point of view, there's no upside for them (to support Ontario)," said Adams. "They don't have a lot of seats in Ontario, the nuclear program isn't that popular here. If they start paying for one province's power bills then other provinces start putting their hands out.
"So there's a political logic to dropping this hot potato."Emma Welford, a spokesperson for Natural Resources Canada, the ministry overseeing AECL, confirmed Ottawa has explored the idea of selling parts of the crown corporation.
"There have been discussions with stakeholders, whether Areva or anybody else, that's talked about this possibility," she said. "There's been interest expressed in the privatization of AECL, but while that's the case, the government of Canada is not planning on pursuing privatization in the near future."
Dale Coffin, spokesperson for AECL, said the company has not received any purchase offers. "To my knowledge nothing recently has transpired."
But Tom Christopher, Areva's chief executive for North America, told the Star in a telephone interview that his company does have its eye on AECL. "Of course," he said, when asked if Areva would be interested in an acquisition. "AECL is a fine company that might produce excellent synergies with any one of the (nuclear) vendors."
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