Ross Marowits
CBC News
January 19, 2007

Montreal: Expectations of a nuclear power renaissance has SNC-Lavalin contemplating the use of its private-sector Team Candu partnership as a possible vehicle to purchase Atomic Energy of Canada Ltd., says the head of the Quebec company’s nuclear subsidiary. "We’re always looking for acquisitions, whether it’s in the nuclear industry or hydro we’re looking for good companies that have good products that can help us compete and grow on the international market," said Patrick Lamarre, president and CEO of SNC-Lavalin Nuclear Inc., a wholly owned subsidiary of SNC-Lavalin.

Last year, SNC-Lavalin formed a partnership with AECL, GE Canada, Hitachi Canada and Babcock and Wilcox Canada to secure new Ontario nuclear projects.

Team Candu is aiming to build two new nuclear units at the existing Darlington facility, east of Oshawa, Ont., that would come on line in about eight to 10 years.

It faces competition from foreign companies, including France’s Areva SA, the world’s biggest builder of nuclear reactors.

The partnership structure could eventually be adapted for other projects in Canada – New Brunswick and for Alberta’s tar sands – and around the world. Lamarre said it might also be the basis of a bid to purchase the federal Crown corporation, which builds Candu reactors used in Canada and elsewhere.

"That’s one thing that we could be looking into," he said in an interview.

"We have not talked to those partners about it so we do not know if the partners of Team Candu would be interested or not."

Competing internationally requires moral and financial support from the federal government, in terms of loan guarantees, Lamarre said.

Purchasing AECL is attractive to the Quebec-based engineering and construction conglomerate because it gives it an entry to the nuclear side of the business, in addition to its current expertise outside the nuclear operations, Lamarre said in an interview.

In Team Candu’s current form, SNC-Lavalin is responsible for engineering design for areas outside the nuclear plant.

"When we have good partners you can always be considering purchasing them to further your line of businesses and that acquisition would have expanded our line of businesses further into the nuclear field than we have now."

SNC-Lavalin would most likely just be interested in the engineering part of the AECL business, Lamarre said.

Musings about a potential sale come two months after Natural Resources Minister Gary Lunn said the federal government had no plans to sell the Crown corporation.

Nothing has changed, said a department spokesman, who spoke with Lunn about the matter a couple of weeks ago.

"The last time I spoke to the minister about that, it was it’s not for sale," said Ghyslain Charron.

Last year, Ottawa gave AECL $160 million, including $60 million for research on a new generation of reactors and $100 million for nuclear laboratory support.

Tom Adams, executive director of Energy Probe, said the Conservative government would love an exit strategy that removes "a big ticket item" from its books.

"When Gary Lunn is looking for the exit on this – which is what I think he’s doing – he’s doing it for a reason," said Adams, who isn’t necessarily opposed to AECL’s privatization.

"This is an expensive habit the federal government has gotten itself into."

Adams also rejects any talk about a nuclear renaissance.

While China and India plan to build several reactors, only two projects in Finland and France are being built in the western world, he said.

The recent interest in nuclear energy is being advanced due to concerns about the production of greenhouse gases from the burning of fossil fuels, Adams said. But the interest will pass, as it did at the conclusion of each past energy crisis.

Global interest in new reactors and the need to upgrading aging facilities produces growth opportunities, said Anthony Zicha, a financial analyst at Scotia Capital.

"If you look at where we are in the energy cycle and increasing demand for nuclear energy, then obviously this is an attractive asset that is exportable around the world and SNC does operate around the world," Zicha said.

"So it’s another vector of growth for SNC-Lavalin."

SNC-Lavalin shares closed down 42 cents to $32.23 Friday on the Toronto Stock Exchange.