AECL Sale Update: What We Know

300px SNC Lavalin logo.svg AECL Sale Update: What We Know

SNC-Lavalin

Two weeks ago, the Canadian government announced the sale of Atomic Energy of Canada Ltd, a crown corporation which is responsible for Canadian nuclear research and development and the sale of CANDU reactors. Few details regarding the controversial sale have been released. That being said, we’ve taken it upon ourselves to construct a breakdown of the information we’ve gathered so far:

1.Businesses Transferred

SNC-Lavalin will take over the commercial division of AECL which includes three business lines: services to the existing fleet, life-extension projects and new reactor builds. Canada will retain the Chalk River Laboratories, which are responsible for the AECL’s major research and development, as well as the production of a considerable portion of the World’s medical isotopes.

2. Jobs

Despite the fact that Renfrew-Nipissing-Pembroke MP Cheryl Gallant praised the deal, explaining that “1,200 jobs will be protected at the closing of the transaction”, large job losses are expected. AECL’s chief executive Hugh MacDiarmid estimates there will be 800 to 900 layoffs which include 310 scientists and engineers, 155 technologists, 240 accountants and project managers, 45 employees who specialize in design drafting and 150 people in management.

3. Money

SNC Lavalin got a good deal, paying only $15 million for the company. The government will also underwrite any life-extension project – such as Point Lepreau and the Bruce nuclear station – and contribute up to $75 million towards designing the new Enhanced CANDU (EC6) reactor. The government will retain the ownership of CANDU intellectual property. Royalties, paired with the sale of Canada’s heavy water inventory, are estimated to net the government $285 Million. In addition, Canada could receive income from a five year agreement for AECL’s nuclear laboratories to provide services to SNC Lavalin; details on that agreement are not yet known.

4. Projects Threatened

Ontario had been attempting to purchase two new reactors from the AECL. However, the deal relied heavily upon a federal discount. Finance Minister Jim Flaherty says the deal should go through as planned but critics are expecting SNC Lavalin will end the provincial subsidies and render the deal financial impossible for Ontario. That is, unless, the feds directly loan the money directly to the province which would be out character for Harper’s ever-belt-tightening government.

That’s all the information we have been able to find. It has been tough to cull the facts from the spin as everything is positive (“1200 jobs protected” instead of “900 jobs lost”). With time the details will become clearer.

 AECL Sale Update: What We Know
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