Harper's Great AECL Rip-off!

[Oscar]

Harper's Great AECL Rip-off

AECL saga shows Conservatives have no business being in government

http://www.thestar.com/news/canada/politics/article/
1018123--walkom-aecl-saga-shows-conservatives-have-no-business-being-in-government

By Thomas Walkom National Affairs Columnist July 1, 2011
Let me see if I’ve got this straight.
Stephen Harper’s Conservative government has agreed to sell the reactor division of its billion-dollar crown corporation, Atomic Energy of Canada Ltd., to the private firm SNC-Lavalin Inc.
But taxpayers aren’t guaranteed any money from this sale. In fact, when the back and forth is totalled (Lavalin gives Ottawa $15 million; Ottawa gives Lavalin $75 million), we end up paying $60 million for the privilege of no longer owning that chunk of AECL.
Lavalin gets the lion’s share of the nuclear technology company’s $1.1 billion worth of assets — including land, buildings and tools.
The public, on the other hand, is stuck with all of all of AECL’s $4.5 billion worth of liabilities.
That means, says Lavalin vice-president Leslie Quinton, that the public is still responsible for decommission existing AECL atomic reactors and disposing of their waste.
Canadian taxpayers are also on the hook for any cost overruns from past and current AECL projects, including an estimated $1 billion that New Brunswick says it is owed for its Point Lepreau nuclear power station.
Oh yes. And Lavalin is expected to lay off at least 40 per cent of AECL’s 2,000-person commercial reactor division. Most are scientists and engineers.
In short, we pay Lavalin to take the good stuff and slash high-tech jobs. We’re left with the debts — plus the promise of unspecified royalties in the future.
Which is a pretty good deal for the Montreal-based firm. If I’d known what patsies Harper’s Conservatives are, I’d have tried to “buy” AECL. [ . . . ]

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AGREEMENT SIGNED TO ACQUIRE AECL’S COMMERCIAL REACTOR DIVISION BY CANDU ENERGY

http://www.snclavalin.com/
news.php?lang=en&action=press_release_details&current_year=2011&id=1469

Toronto | June 29, 2011

CANDU Energy, a wholly-owned subsidiary of SNC-Lavalin Group Inc. (TSX: SNC), is pleased to announce that it has agreed with the Government of Canada to acquire certain assets of Atomic Energy of Canada’s (AECL) commercial reactor division for a purchase price of $15 million and royalty payments from future new build and life extension projects. AECL will retain its past liabilities.

Approximately 1,200 employees are expected to be transitioned from AECL to CANDU Energy.

AECL is the Crown Corporation responsible for managing Canada’s nuclear energy research and development program. The commercial reactor division began developing the CANDU technology in the 1950s, and has built 34 reactors in seven countries. It has made a significant contribution to a key Canadian sector but in its current form, AECL was judged to be no longer sustainable. The privatization of AECL is an important turning point to allow for a new competitive business model, following years of challenges faced by AECL, and is an endeavour to keep alive the Canadian nuclear industry.

“This acquisition will require concerted and coordinated effort on the part of all stakeholders to work together. We will strive to make it a success both for the people who have built it, and for our shareholders,” said Patrick Lamarre, Executive Vice-President Global Power, SNC-Lavalin.

“The CANDU commercial reactor business will benefit greatly from SNC-Lavalin’s entrepreneurial capacity and global scale”, said the Honourable Joe Oliver, Minister of Natural Resources. “The transaction will place CANDU technology in proven, competent hands to be serviced and deployed in Canada and abroad, meeting energy needs and stimulating a supply chain located largely in Canada.”

The successful support and development of this technology is critical to sustaining Canada’s nuclear industry, which currently employs more than 30,000 workers in 150 companies across Canada. For CANDU Energy, the purchase of certain AECL assets means committing to preserving a homegrown, proven technology with good potential. CANDU Energy will focus on the new build, life extension and services product lines.

Lamarre continued, “Continuity and the quality of our services to the CANDU customer base are our top priorities going forward in Canada and internationally. With our expertise and experience in the nuclear sector, we believe that CANDU Energy will allow us to open new markets and capitalize on existing ones.”

CANDU Energy will work towards completing the Enhanced CANDU reactor (EC6) development program, with the support of the Government of Canada of up to $75 million. CANDU Energy will target new build projects in Ontario, Canada as well as in other countries around the world such as Jordan, Romania, Argentina, Turkey and China. The new company will also complete the remaining obligations under the ongoing life extension projects at Bruce Power, Wolsong, Point Lepreau and Gentilly-2 through subcontract service agreements with the Government of Canada.

The company will work hard to increase its share of the services business, on obtaining new life extension projects and additional scope on existing ones, and developing new build projects in order to build the CANDU Energy backlog.

The acquisition is expected to be finalized in early fall 2011, subject to the fulfillment of certain conditions including Competition Act compliance and other administrative approvals.

SNC-Lavalin is one of the leading engineering and construction groups in the world and a major player in the ownership of infrastructure, and in the provision of operations and maintenance services. SNC-Lavalin has offices across Canada and in over 35 other countries around the world, and is currently working in some 100 countries. In business since 1911, the Company celebrates its 100th anniversary in 2011. - 30 -
Media Contact
Leslie Quinton
Vice-President, Global Corporate Communications
SNC-Lavalin Group Inc.

SNC-Lavalin Inc.
514-393-8000 x7354
leslie.quinton@snclavalin.com

Investors
Denis Jasmin
Vice-President, Investor Relations
SNC-Lavalin Group Inc.

SNC-Lavalin Inc.
514-393-8000 x7553
denis.jasmin@snclavalin.com

- - - - - - -

LAVALIN Board of directors:

http://www.snclavalin.com/investors_board.php?lang=en

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Ottawa basically paying SNC to take AECL

http://www.cbc.ca/news/politics/story/2011/06/29/
aecl-sale-snc-weston.html

By Greg Weston, CBC News, Jun 29, 2011

The federal government's long-awaited deal to sell off its money-losing nuclear reactor business is more like a perpetual partnership than a sale, leaving Canadian taxpayers stuck with the fiscal fall-out for years to come.
The government-owned Atomic Energy of Canada Ltd. has announced it has finally reached a tentative deal to sell its commercial reactor development and repair division to Quebec-based engineering giant SNC-Lavalin.
The Montreal-based company was the only suitor in the world left at the negotiating table, a fact that helps to explain why the government is effectively paying SNC-Lavalin to take over the Crown corporation.
Under the deal, SNC will pay a paltry $15 million for AECL's nuclear reactor division, plus some as yet undisclosed "royalties" on future reactor sales.
In return, the government will give SNC up to $75 million toward the development of the next generation of AECL's once internationally successful Candu reactors.
In other words, Canadian taxpayers are giving the Quebec company $60 million to take AECL off their hands.
If that were the whole deal, it would actually be a bargain for taxpayers.
AECL may be world-famous for its Candu reactors, but it hasn't sold one in 15 years, and now generates mainly massive amounts of red ink, the Crown corporation having cost Canadian taxpayers more than $820 million last year alone. [ . . . ]

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Atomic Energy sold to SNC-Lavalin for $15 million

http://www.thestar.com/article/
1016964--atomic-energy-sold-to-snc-lavalin-for-15-million?bn=1

Maria Babbage, The Canadian Press (Toronto Star), June 29 2011

TORONTO—The federal government has sold nuclear company Atomic Energy of Canada Ltd. to Montreal-based engineering giant SNC-Lavalin Group.
Natural Resources Minister Joe Oliver announced the sale late Wednesday, ending at least two years of attempts by Ottawa to privatize AECL.
The sale price was $15 million, but Osborne said the government will have opportunity to get royalties down the road because it’s keeping intellectual property rights.
Meanwhile, SNC-Lavalin is creating a new division called CANDU Energy that will house AECL’s three former business lines.
SNC-Lavalin (TSX: SNC) was the sole bidder to meet Ottawa’s conditions for buying the financially troubled Crown corporation.
AECL has long been a headache for successive federal governments and has cost Canadian taxpayers billions of dollars in subsidies, including about $1 billion in the last two years alone.
The company has also faced major cost overruns at key projects in recent years while struggling to find a buyer. [ . . . ]

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Used nuclear company is no bargain

http://www.thestar.com/opinion/editoria ... n/article/
927373--used-nuclear-company-is-no-bargain

Jack Gibbons, Toronto Star, Monday January 24 2011
(Jack Gibbons is chair of the Ontario Clean Air Alliance.)
Hey buddy, want to buy a used nuclear company?
Sure, there’s a huge pile of debt under the hood and nobody will buy its products without massive taxpayer handouts, but there might be a few miles left in fixing crumbling reactors in Ontario and if it could ever get that New Brunswick job finished that would be one less anchor tied to the back bumper.
SNC Lavalin, the engineering and construction giant, and Bruce Power have both kicked the tires and decided to pass on the idea of buying Atomic Energy of Canada Ltd. (AECL). But that hasn’t stopped Ontario Energy Minister Brad Duguid from asking taxpayers all across Canada to pony up for AECL so Ontario can build more high-cost nuclear generating stations.
If I were a taxpayer in B.C. or Newfoundland, I would not be racing to get a cheque in the mail to Ontario. But if I were a taxpayer in Quebec or Manitoba, I probably would drop Ontario a line, pointing out that my province has lots of low-cost hydro power it would be happy to sell my neighbour at less than a third of the price of new nuclear.
I’d point out that Quebec, for example, just inked a 26-year deal with Vermont to supply power starting in 2012 at a cost of under 6 cents per kilowatt-hour (kWh). Compare that to the 21 cents per kWh we know is the minimum cost for new nuclear power in Ontario (because that is what AECL’s most recent bid works out to).
Transmission capacity? We’ve got it — Ontario and Quebec have recently expanded the connections between our provinces, although Ontario energy planners just don’t seem to want to use it. Supply? Quebec has it now, and by increasing the province’s rock bottom energy efficiency, can free up millions of kilowatts more.
But, in reality, I am a taxpayer in Ontario, so I am going to point out to Minister Duguid that he can help all of us use electricity more efficiently and help reduce our electricity bills at a cost that is even cheaper than importing water power. We know from Ontario Power Authority spending figures that we can reduce electricity usage at a cost of under 4 cents per kWh. So we can build a “virtual” nuclear power plant by eliminating wasteful energy use at less than one-fifth the cost of a real one. [ . . . ]

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"Ottawa must get deal quickly on AECL" – says Ontario's energy minister

http://toronto.ctv.ca/servlet/an/local/ ... /20110118/
aecl-duguid-110118/20110118/?hub=TorontoNewHome

BY MARIA BABBAGE, Canadian Press, Mon Jan 17 2011

TORONTO -- With the sale of Atomic Energy of Canada Ltd. possibly in
jeopardy, Ontario's energy minister is calling on Ottawa to move quickly
in deciding the fate of the Crown-owned company.
Two major bidders for AECL have apparently bowed out, which leaves
Ontario's plan to buy two nuclear units in limbo.
The federal government put AECL's troubled CANDU reactor business
up for sale in 2009, which delayed the province's ability to move ahead
with the purchase, Duguid said Monday.
"We feel the federal government has an obligation here to ensure that it
gets this together quickly," he said in an interview. "They have a
responsibility to Ontario and Ontario families to get their act together on
this file."
The Conservative government also needs to get behind Canada's nuclear
industry and the 70,000 workers it employs, Duguid added.
"What's been frustrating for us is that in most other countries with a
nuclear industry, their national governments take a much greater level of
commitment towards ensuring that that industry is viable," he said.
"We're not sure we're seeing that level of commitment from the federal
government in the nuclear industry."
His comments come in the wake of reports that Bruce Power and
SNC-Lavalin Group are no longer interesting in buying the heavily
subsidized Crown corporation.
A source confirmed to The Canadian Press late last week that Bruce
Power walked away from the table after the union representing
scientists and engineers raised a red flag in a letter to its members.
The Society of Professional Engineers and Associates suggested that
SNC had also pulled out.
The union said it was "extremely concerned" that talks had collapsed
and feared the government would allow AECL to die a slow death or
sell it off piecemeal. [ . . . ]