Wednesday, November 10, 2010

Bungled AECL privatization in the offing?

Recall the initial pitch on what the Harper government's privatization of Atomic Energy Canada Limited would bring:
The decision to seek strategic investment was made in order to help the CANDU Reactor division strengthen its global position, access opportunities around the world, and reduce the financial risks carried by taxpayers, all at a time of global nuclear expansion.
Now look at what's transpired, word today that the bid process has attracted just two low ball bids from SNC-Lavalin and Bruce Power:
"Both prospective buyers are offering far less than what Ottawa believes the company to be worth, based on a confidential valuation provided by Wall Street investment firm Rothschild Inc. And neither is willing to make a commitment to finance the completion of AECL’s Advanced Candu Reactor – known as ACR-1000 – technology the company is relying on to compete in both foreign and domestic markets.
The assist that Kory Teneycke possibly gave to the process is noted in the Globe report, his terming of AECL as a "sinkhole" while the Prime Minister's spokesman likely didn't go unnoticed by bidders.

Some issues to watch here as we learn more about's not clear how "opportunities around the world" like those in India will be helped by AECL buyers who don't want to finance AECL's new technology that it says it is relying on. Unless we finance it for them? Why would we do that?

It's also not clear how this deal helps reduce financial risks for taxpayers. The report suggests we'd be on the hook for many costs to come.

Canada has a 50 plus year investment in this crown corporation that sounds like it isn't going to be recouped here. Canadians have indicated that they do not want AECL to be privatized. Yet here we sit with what looks to be a forthcoming situation where we get less return than AECL is worth and AECL's potential will be under-utilized. Not looking good.