AECL to be privatized??

> Is shuffle at AECL prelude to a sell-off?
> Memo triggers talk of plan for privatization
> TORONTO STAR
> Oct 31, 2007 04:30 AM
> Tyler Hamilton
> Energy Reporter
>
> An internal reorganization at Atomic Energy of Canada Ltd., detailed
> last week in a confidential memo to employees, could signal that the
> federal government is quietly preparing to privatize a portion of the
> Crown corporation, industry observers say.
>
> Atomic Energy, designer of the Canada deuterium uranium "Candu" nuclear
> reactors, will abandon a management structured around five business
> groups and instead operate as two distinct divisions - a Candu reactor
> division focused on commercial reactor sales and services, and a
> research and development division that will also oversee nuclear waste
> management.
>
> "It is a flag that something is going on," said lawyer Robert Power, who
> co-leads the national energy practice of Blake, Cassels & Graydon LLP.
> "Whether they're preparing to compete more efficiently, or whether
> they're going to prepare to spin off their assets, we don't know yet.
>
> "Obviously they're preparing for their best options."
>
> The Toronto Star reported in July that the federal government was in
> talks to sell a share of Atomic Energy to U.S. industrial giant General
> Electric Co., though informal meetings have also been held with French
> nuclear company Areva SA.
>
> Officials from Natural Resources Canada, the department that oversees
> Atomic Energy, maintain there are no formal discussions to sell the
> agency, though sources say senior federal bureaucrats - led by former
> Bay Street analyst Rohit Gupta, recently a policy adviser to Prime
> Minister Stephen Harper - have begun approaching the banking community
> with plans to restructure the Crown corporation.
>
> Gupta, also in charge of the federal government's public-private
> partnership program, did not return calls from the Star.
>
> One scenario being pitched, sources say, is to sell a third of Atomic
> Energy, or AECL, to GE and another third to Canadian engineering firm
> SNC Lavalin Group Inc.
>
> Both companies have a strong working relationship with Atomic Energy as
> part of "Team Candu," and both have expressed an interest in buying into
> the Crown corporation.
>
> Peter Mason, president and CEO of GE-Hitachi Nuclear Energy Canada Inc.,
> said the three companies would fit well.
>
> "It's based on the historic relationship we've had with GE and AECL, and
> our involvement in the technology and projects over the years," said
> Mason, adding that GE's own nuclear reactor technology and the Candu
> design complement each other and would offer customers more product
> choices.
>
> He agreed that SNC-Lavalin, or some other Canadian link, would be
> important.
>
> "If we're talking hypothetically and the government were looking for a
> partnership with AECL, then I think it would be important that we would
> have companies like SNC-Lavalin, possibly even Bruce Power, involved in
> such a project."
>
> In the employee memo, Atomic Energy chair Michael Burns said the new
> management structure, which is "effective immediately," will better
> define the company's activities and financial performance. Atomic
> Energy's "board of directors believes these improvements will help the
> company focus on, strengthen and grow the value of the business."
>
> Atomic Energy spokesperson Dale Coffin said the corporate realignment is
> merely "formalizing" the way the company has already operated by
> assigning a president to oversee each group. The internal announcement,
> he said, came in advance of the retirement next week of chief executive
> Robert Van Adel.
>
> Ken Petrunik, who maintains his title as chief operating officer of the
> company, is now president of the reactor division, while chief
> technology officer Dave Torgerson has been named president of R&D and
> executive vice-president. No CEO has been named to replace Van Adel.
> Burns, in his memo, said each division is responsible for its own
> operational and "bottom line" performance.
>
> Dennis Bevington, federal energy critic for the NDP, said it makes sense
> that the Conservative government would want a clearer separation between
> the commercial reactor business and Atomic Energy's research and
> development operations, the latter being excluded from any privatization
> efforts.
>
> He said the changes are just the latest sign the government is prepping
> Atomic Energy's commercial business for some kind of sale. A bill moving
> through Parliament, he pointed out, aims to set a minimum liability
> limit in the event of a nuclear accident, lowering a major risk barrier
> for foreign investment in Canada's nuclear industry.
>
> "We wonder whether this is another move to line up our industry for
> sale," Bevington said.
>
> When contacted by the Star, Omar Alghabra, who follows the activities of
> the nuclear agency as the Liberal Party's natural resources critic, said
> he wasn't aware of last week's internal changes.
>
> "My fear and concern is that the Conservatives are going about it in a
> very secretive way," he said, regarding the government's strategic plans
> for Atomic Energy. "This is a very important question that deserves
> public debate and openness."
>