Federal nuclear firm $160M over budget on new reactors

April Lindgren
National Post
March 31, 2004

Toronto: Atomic Energy of Canada Limited’s only domestic project for new reactors is running $160-million over budget and four years behind schedule even as the company is pushing to sell the Ontario government advanced nuclear power plants worth billions of dollars.

MDS Nordion, the firm that hired AECL to design and construct two reactors to produce radioisotopes at Chalk River, has signalled it expects the federal Crown corporation to foot the bill for at least some of the project’s skyrocketing costs.

“It was part of the original contract to share any cost overruns,” company spokeswoman Olivia Nixon said yesterday.

Neither side would comment on the financial implications of the contract terms for AECL. But a recent report from publicly traded MDS Inc., Nordion’s parent company, said discussions are underway with the Crown corporation to “resolve issues related to cost overruns on the project.”

The two MAPLE reactors, designed to produce radioisotopes for medical diagnosis and treatment purposes, were supposed to be delivered for $140-million. Instead, MDS Nordion has invested $304-million to date. AECL refused to provide information on how much it has spent on the project, citing proprietary concerns.

Plans to complete the first of the reactors in 1999 and the second in 2000 have also fallen by the wayside due to major technical difficulties, including serious problems with emergency shutdown systems. In its latest quarterly report, MDS Inc. observed that “AECL continues to advise us that they are cautiously optimistic that the commissioning of the MAPLE reactors will resume later this year.”

AECL’s critics acknowledge the MAPLE reactors are not the same as the company’s Candu nuclear power units. They nonetheless argue the problems at Chalk River, 190 kilometres northwest of Ottawa, should serve as a warning to Ontario’s Liberal government at a time when it is under growing pressure to build more nuclear power plants to resolve the province’s looming electricity shortage.

“It is still a major reactor project, so I think AECL’s track record on MAPLE is relevant,” said Tom Adams, executive director of the energy watchdog Energy Probe.

Mr. Adams warned taxpayers will still be at risk if Ontario chooses a nuclear solution to its electricity problems and then, to guard against cost overruns, signs guaranteed price contracts for new AECL reactors.

“AECL is just another federal department” funded by the government in Ottawa, he argued, noting the Crown corporation also played a key role in the redesign and refurbishment of Ontario’s Pickering A nuclear plant. That project is also running years behind schedule and billions of dollars over budget.

AECL spokesman Ian Dovey insisted the company’s nuclear power and radioisotope reactors cannot be compared.

“We’re talking about two different types of reactors. You can’t lump them together – it’s like comparing a car to a truck for God’s sakes,” Mr. Dovey said. “There are no other reactors on the face of the Earth like the ones we’re building [at Chalk River].

“It’s not uncommon to run into glitches [with new designs]. . . . There are glitches in cars that exist today.”

AECL has been lobbying the Ontario government to spend about $12-billion on eight new reactors required to meet the province’s energy needs over the next 20 years. The company is pushing its not-fully-designed advanced Candu reactor (ACR) as the technology of choice.

Bruce Power, the company that operates the Bruce nuclear station under a long-term lease with the Ontario government, is already studying the feasibility of adding one or more advanced Candu reactors to its assets.

“But if we were ever going to do anything of that nature [build one of the new units], I would have to reassure our shareholders that I would not be putting the company at risk on the basis of a massive cost overrun,” Bruce chief executive Duncan Hawthorne said in an interview.

“We’d have to be very certain that the project risk is not ours,” said Mr. Hawthorne, who added he would seek a guaranteed price making AECL responsible for cost overruns.

Energy Minister Dwight Duncan is not expected to decide whether more nuclear power stations are the solution to Ontario’s energy woes until sometime next fall.

In the meantime, a provincially commissioned task force headed by former deputy prime minister John Manley has strongly endorsed new nuclear power plants as a future source of clean, cost-effective electricity.
Energy Probe’s recommended references on safety, business and nuclear weapons proliferation problems with MAPLE reactors

For details on the CNSC’s staff December 2000 analysis of AECL’s review of the mechanical problems with the MAPLE 1 safety systems, see http://www.nuclearsafety.gc.ca/eng/commission/pdf/121300-m.pdf

For AECL’s March 2001 testimony to the CNSC on the safety and management problems at MAPLE 1, see http://www.nuclearsafety.gc.ca/eng/commission/pdf/transh09.pdf

For a newpaper report on AECL’s cover-up of safety flaws with the safety systems of MAPLE reactors, see “Agency hid reactor safety flaws: Report; Canada’s nuclear watchdog reveals Chalk River woes” The Toronto Star, Thursday, December 14, 2000.

For newspaper reports on the discovery in late 2003 that the reactor physics of the MAPLE design have been miscalculated, North Renfrew Times newspaper, December 23, 2003 and March 10, 2004. The March report includes the follow:

However, a series of problems have pushed the project well behind schedule and over budget.

In the most recent case, the Maple 1 reactor was shut down temporarily last June after tests showed the reactor operating with a “positive power coefficient,” even though the Maple reactors are designed to operate with a negative coefficient.

In a report to members of the Canadian Nuclear Safety Commission in July, Barclay Howden, the CNSC’s acting director general of nuclear facilities regulation, said the positive reading for Maple 1 was “contrary to the (reactor’s) core design characteristic” and “could have a negative impact on safety.”

In the National Post March 31, 2004 article on AECL’s problems with the MAPLE reactors, AECL’s spokesperson said, “There are no other reactors on the face of the Earth like the ones we’re building [at Chalk River].” In fact, South Korea used the MAPLE design to build the HANARO reactor. For details see http://hanaro.kaeri.re.kr/hanaro.html

For analysis of nuclear proliferation problems associated with AECL/Nordion’s reliance on the use of weapons grade uranium in the MAPLE design, in defiance of US anti-proliferation law (Schummer Amendment), see http://www.nci.org/

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