What’s the future of AECL under SNC-Lavalin control?
The deadline to submit purchase offers for Atomic Energy of Canada Ltd. was last week, and from what we’ve heard so far only SNC-Lavalin has made its bid public. We’ve had an interesting situation here in Canada: a federal government looking to sell the homegrown maker of heavy-water nuclear reactors, and an Ontario government looking to buy at least a couple of nuke reactors. Ontario says the price so far is too high and, besides, it doesn’t want to do any deals with AECL — its preferred partner, apparently – while its future is so uncertain. Only when the feds deal with AECL’s ownership issues will Ontario get back into serious discussions, so I’ve read. The feds, meanwhile, have blamed Ontario’s decision to delay a purchase on the difficulty of finding a private buyer for AECL. Who, after all, wants to buy a company that can’t sell it’s latest and greatest product on its home turf?
Now we know that Canadian engineering giant SNC-Lavalin wants to take control of AECL. Personally, I don’t care who owns the thing as long as taxpayers aren’t on the hook for its future losses and liabilities. The question, at least for the scientists who have built their careers at AECL, is whether the new controller cares about Candu intellectual property, advanced reactor designs, and staying in the game with the big boys of nuclear — i.e. Westinghouse, GE and Areva — or simply wants to milk the company’s pipeline of refurbishment opportunities as previously sold reactors around the world reach their mid-life crisis. SNC-Lavalin is an engineering company. It just wants work and it wants profits. It doesn’t really care, as a matter of national pride, if we build AECL’s next-generation Advanced Candu Reactor. It’s just as happy fixing up old Candu 6s and building new Candu 6s in developing countries just getting into nuclear and which don’t need the mammoth reactors being pitched by the competition.
Here’s a little anecdote: When Linda Keen, former head of the Canadian Nuclear Safety Commission, required that the Candu 6 design after 9/11 be improved to handle major impacts, like from an airplane, SNC-Lavalin had a shit-fit. Back in 2006, Ontario Power Generation was more interested in building a Candu 6 than an Advanced Candu Reactor. The Candu 6 was a known design, had previous approvals, so in the minds of SNC-Lavalin — which was part of the Team Candu build consortium — constructing a Candu 6 would be a cakewalk compared to getting approval for a new design. Keen apparently deflated those hopes. In her view, it was SNC-Lavalin more than AECL that was gunning for her dismissal. Here’s a quote from Keen from an interview I had with her in July 2009 in which she discusses SNC-Lavalin’s reaction to Keen’s decision. This part of my interview has never before been published:
”What they had felt in October 06 was this (Candu 6 contract) is a sure deal; that we’re going to get this contract as part of the Candu group…. They were really upset, because this was money in the bank that they were going to get this.”
Keen said in early 2007 that SNC sent one of its vice-presidents to a Canadian Nuclear Association meeting to raise a storm over the regulatory uncertainty Keen was creating. Keen went to SNC-Lavalin’s board meeting in August 2007 to chat about it. “They were super furious. They said, ‘You’re not being patriotic. How could you do this? It’s being built in other places.’ ” What followed was “the Slaughter on Slater,” she said, with 280 Slater St. being the regulator’s address in Ottawa. Keen said SNC, with the help of lobbiest Hill & Knowlton, began to make life miserable for Keen and demand that she be replaced.
Let’s remember, SNC-Lavalin is an engineering firm. It doesn’t care whether it’s building bridges, refineries, desalination plants, or nuclear plants, and when building nuclear plants it doesn’t care what it’s building — as long as someone buys it and it gets built, because building is what they do. It has received plenty of business from AECL over the years, and it fears not getting as much in the future if someone else buys it. This proposal to purchase is about protecting its turf; it’s not about preserving AECL’s legacy and pushing forward on new technologies.
I’m not passing judgement. It’s a smart move on SNC’s part. I’m just offering some perspective on why it may want AECL.