Bruce Power out of talks to buy AECL

Bruce Power’s Bruce A & Bruce B Nuclear Generating Stations

TORONTO – The Conservative government’s plans to sell Atomic Energy of Canada Ltd. may be in serious jeopardy, The Canadian Press has learned.

At least one of two major bidders for AECL’s troubled CANDU reactor business — Bruce Power — has pulled out of talks with Ottawa, a source confirmed Friday.

Bruce Power’s CEO told staff Friday that the company has dropped out of the bidding process, the source said. The decision was apparently made Thursday by Bruce’s board of directors.

It’s unclear why the company pulled out, but the source said it was likely a money issue. Bruce is going through a major refurbishment project and had large cost overruns on a few units.

“They’ve got three major investors and two of the three, I think, just don’t want to put any more money into it right now,” the source said.

“I think that’s what it comes down to.”

SNC-Lavalin Group was also in talks to buy the heavily subsidized Crown corporation, which the federal Tories put up for sale.

An offer was also reportedly submitted by Toronto businessman Andrew Day.

The union representing scientists and engineers at AECL sent a bulletin to its members Friday suggesting that both Bruce Power and SNC-Lavelin have walked away from the table.

“As you may have heard, rumours have been swirling this week that negotiations between the remaining bidder, Bruce Power, and the government have broken down,” said the Society of Professional Engineers and Associates.

“We have heard those same rumours from multiple credible sources and consequently we believe them likely true.”

The letter, signed by SPEA’s executive, goes on to say that its “extremely concerned” by the development.

“Our fear is that the government may now simply allow AECL to die a ‘death by a thousand cuts,’ or sell off AECL piecemeal, which would amount to the same thing,” it said.

The group is urging its members to contact their local MPs and put pressure on the government to allow AECL to seek new business opportunities while the restructuring process is going on.

Richard Walker, a spokesman for Natural Resources Minister Christian Paradis, wouldn’t comment on the report.

“While the process is still ongoing we do not comment or speculate on procedures,” he said in an email.

A spokesman for Bruce Power was also tight-lipped when reached by phone.

“Business development opportunities are something that Bruce Power doesn’t comment on, so this isn’t something that I can make any comment on,” said John Peevers.

The government announced in 2009 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.

Ontario is the biggest customer of CANDU technology and the province is also home to the bulk of the AECL supply chain.

Many analysts believe if AECL doesn’t secure the new builds in Ontario it won’t attract any new international customers, and will be left with only the business of repairing its old reactors.

The agency submitted a bid for the two new reactors Ontario wants to build, but the province put off the multibillion-dollar decision, saying the bids were too costly.

Ontario’s governing Liberals say they want to move ahead with the project, but are frustrated waiting for Ottawa to make a decision on the future of AECL.

Premier Dalton McGuinty made a personal appeal to Prime Minister Stephen Harper to confirm AECL’s position so the province could buy the two reactors, and keep AECL in business.

Ontario Energy Minister Brad Duguid lashed out at the federal government last fall, saying his biggest challenge was Ottawa’s “lack of interest” in standing up for 70,000 workers in the Canadian nuclear industry.

“Their decision to sell of AECL in the middle of our procurement process was very troublesome to us,” he said last November.

AECL’s bid for the two new Ontario reactors was reportedly $26 billion — the entire budget for the province’s nuclear program, which was also supposed to refurbish 10 older reactors.

© 2011 The Canadian Press