[LINK] "New Brunswick throws a wrench into AECL sale plans"

[rfmcdonald]

If New Brunswick really is buying a French reactor to expand its Point Lepreau complex instead of turning back to the the problematic CANDU design, the future of the Canadian nuclear civil industry is bleak indeed.

New Brunswick has cast a pall over Ottawa’s effort to sell off Atomic Energy of Canada Ltd., announcing that it has dropped AECL’s proposal to build a new reactor and is turning instead to the Crown corporation’s arch-rival, France’s Areva Group.

The New Brunswick decision, made public on Thursday, is the second major setback for AECL in the past year. Last summer, the Ontario government postponed indefinitely the purchase of the corporation’s next-generation Candu reactor, which is still in development.

The Harper government is trying to sell AECL, and the bidding process, managed by New York merchant bank N.M. Rothschild & Sons closed on June 30. Industry insiders say there were multiple bidders, including Montreal-based engineering giant SNC-Lavalin Group Inc. and Westinghouse Electric Co. LLC, a unit of Toshiba Corp.

Areva had indicated during the Ontario competition that it would consider seeking a stake in Canada’s flagship nuclear company, but its interest has cooled, and sources said on Thursday that the French multinational has dropped out.

It remains uncertain whether the would-be buyers are willing to pay a price that Ottawa would find acceptable, including the assumption of AECL’s liabilities. And the announcement from New Brunswick undermines confidence in the company, although AECL’s call for private financing of new reactors had made it a long shot.

“I get the impression there’s not a heck of a lot of interest” in buying control of AECL, said Bryne Purchase, a former deputy minister of energy in Ontario and now a professor of energy policy at Queen’s University.

He added that any buyer would be unlikely to assume AECL’s liabilities, and might demand additional guarantees from Ottawa to support the company in the international marketplace. In fact, the market is dominated by companies that are seen as “national champions” at home and are well supported by their governments, he said.

Mr. Purchase said the New Brunswick agreement fuels the perception that AECL is unable to sell reactors, has little government support in Canada, and is essentially being sold as a company that is in the business of refurbishing its existing reactors.