Oilweek: Canada’s Gas & Oil Authority
July 6, 2007
Toronto: The partial sale of Canada’s Crown-owned nuclear giant is the source of speculation once again.
Following a published report which said Ottawa is in advanced negotiations to sell part of Atomic Energy of Canada Ltd. to General Electric, a spokesman for the Natural Resources Department confirmed Ottawa is in “discussions” to sell part the Crown corporation.
But both the office of Natural Resources Minister Gary Lunn and AECL said they don’t have anything to announce. The minister’s office said the government isn’t negotiating with any company “at this time” but does get “expressions of interest in AECL from time to time.”
AECL spokesman Dale Coffin would not comment on what he called “speculation and rumours,” but disputed suggestions that AECL needs a strategic private-sector partner to compete in the world.
The Crown corporation has built six reactors in the last 11 years, and a seventh is about to go on stream in Romania, he said.
“That’s a lot in a period where the industry has been at a snail’s pace,” he said. “Now every country in the world is looking at the nuclear option, and we think we’re in a very strong market position.”
Speculation about a partnership with General Electric or French nuclear giant Areva has been rife since the Conservatives were elected in January 2006, with several similar reports leaking out that the jewel in Canada’s nuclear crown was close to being partially sold.
Still, many industry analysts don’t expect to hear a final sale announced any time soon. Murray Elston, president and CEO of the Canadian Nuclear Association, said it’s not inevitable that AECL must partner up with a private company to survive.
The attention on Canada’s nuclear giant is encouraging and shows the country has valuable expertise in the industry, he said.
“The question for the industry worldwide . . . is about having the capacity to meet the demand that’s out there,” Elston said. “I’m not sure that consolidation is the way to necessarily do that.”
Despite all the speculation, Elston said it usually takes some time to negotiate such a complicated partnership.
“The government here in Ottawa is going to be very cautious,” he said. “While I think philosophically they’re interested in having government out of commercial enterprise, they’ll want to make sure they get value.”
But one industry analyst said getting value for taxpayer dollars will be a challenge under such a public-private partnership.
Tom Adams, executive director of Energy Probe, said past partnerships with AECL have left taxpayers on the hook for huge cost overruns and liability for messy production.
Meanwhile, he said, the private company has walked away with the profits. But Adams said Lunn has personally been campaigning to sell off parts of AECL since he became minister of natural resources.
“It’s a complete disaster for taxpayers,” Adams said. “That’s AECL’s track record when it comes to privatization, and that raises a major concern about what AECL’s up to now.”