Hold the extras

Jennifer Wells
Report on Business Magazine
October 1, 1998

“My train reached the Danube at Cernavoda, a name that sounds ominously similar to Chernobyl. Here, in one of the world’s most unstable earthquake zones, Ceausescu had decided to build Romania’s first power station.”

In the spring of 1990, six months after the execution of Nicolae Ceausescu, self-proclaimed Genius of the Carpathians, journalist Robert Kaplan travelled to Cernavoda, penning his lyrical Balkan Ghosts. Ceausescu’s grand nuclear plan had been to see five Candu reactors, the pride and joy of Atomic Energy of Canada Ltd. (AECL), rise in this place just in from the Black Sea. None, then, had been completed.

What was the meaning of this Pharaonic-scale project, wondered Kaplan? Something Stalinesque? “A means to keep the masses occupied, to give them something to do, while reducing them to a subsistence existence?”

Eight years on, and the Romanians, thanks greatly to AECL and the Canadian taxpayer, via the Export Development Corp., have one nuclear reactor up and running at Cernavoda. A second sits half-built, and while the government of Emil Constantinescu cannot afford to purchase spare parts for reactor No. 1, AECL desperately wants to see reactor No. 2 completed. And 3, 4 and 5 would be nice too.

Last summer, as Romanian workers at the second reactor protested months of work with no pay, the Romanian government awarded a $142-million (U.S.) contract to AECL to take the project through the next stage of construction. Yet the Romanian government could finance only $40 million of that, and so we await word on which export credit agencies and/or international financial institutions will carry the lion’s share of the financing.

Romania does not need the power: The country has excess capacity as it is. And even after the $142-million phase, the Romanian government estimates it will need another $650 million to finish reactor No. 2, though according to an AECL spokesperson, that figure might be adjustable. “Either you want a really, really good stereo or just a stereo,” he offers.

There is no time line on the project. Yet AECL remains ever hopeful. “If all five go ahead, it would eventually be our biggest export market,” an AECL marketing man told The Globe and Mail’s Geoffrey York. That plan, which would fulfill Ceausescu’s grand vision, would only require an investment of a few billion dollars.

AECL needs to put a positive spin on Romania. As of early September, it was still awaiting word on whether it would be awarded a contract to build two Candu model 6s in Turkey, a market that it has sought for years. The competition includes a U.S. consortium led by Westinghouse Electric Corp. (joined by Mitsubishi Corp. of Japan) and the group known as German Nuclear Power International, led by Siemens AG of Germany and backed by Framatome SA of France.

Should Turkey reject the Candu, AECL’s order book, China aside, is sparse. To date, South Korea has been the technology’s best customer, outside of Ontario, that is.

AECL’s hopes otherwise are less developed – and less financially able – customers. “If Chrétien insists on spreading these bankruptcy factories around, he should send them to rich countries,” says Norm Rubin, director of nuclear research with Energy Probe in Toronto. “It’s really vicious to send them to poor countries like Romania where the people are going hungry.”

 

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