Cyberwanderer’s Blog

October 19, 2009

AECL Privatization Does Not Add Up

Filed under: Canada,Politics — cyberwanderer @ 8:36 pm
Tags: , , , , , , , , , ,

The government’s argument for privatizing AECL does not add up. They claimed they are trying to save Canada’s nuclear industry but refuse to put in a condition that the buyer, who could be AECL’s competitor, can’t decide to get rid of CANDU after buying it. They claim Canada is not competitive internationally while contracts are being signed in China, who is expected to be one of the world’s largest market for new reactor build. China already uses CANDU technology and was happy with the on time and on budget completion of the projects. This weekend, international news is talking about deal being work out by AECL and India’s 3 utilities. So imagine all this expected influx of profit in the near future from new nuclear plant going to foreign companies or whichever private firms buy AECL. A likely scenario is Areva or its major competitors buy it just to get rid of the competitor.

An AECL scientist said:

“Historically, whenever you sell a technology to a foreign country, you lose it,”

The government want to sell off the only division at AECL that has large potential to see huge profit in the near future (the Nuclear plant division) while retaining the research division. But that’s not the end of it. The research division will be contracted out. Based on past contract related scandal, contracting out the research division open up huge potential for corruption. Haliburton, Sponsorship Scandal, the “billion dollar with nothing to show for it” Ontario’s Health Contract are just few of the latest and most prominent scandal. Contracting out work especially when it involves research just does not make sense unless you are a lobbyist of contracting firm.

AECL would do better if they are left alone without constant political interference and constantly changing executive officials made up of political appointee of which ever political party happens to be ruling at that time. We can have the brightest scientist and engineers but if the upper management who are indebted to politicians, who are in turn indebted to their campaign contributor, is constantly reorganizing and restructuring the company, then it won’t matter. Politicians who constantly sell profitable or soon to be profitable division (like Mulroney selling off medical isotope division profit to Nordion) to private firms, then public funds will just continue to be wasted.

Harper’s government claim AECL need to be commercialized. But with Canada’s energy future at stake, can we just simply dumb down the value of scientific research to how much profit we can make right now? What’s more troubling is there’s enough evidence that the expected and inevitable nuclear renaissance, and the foothold AECL’s CANDU already have in China and India – two potentially biggest market in the near future, are about to provide AECL with influx of rich revenue. But the government is now rushing to privatize them? This same division is also where AECL get most of its profit right now with the continuous contract in refurbishment of Canada’s nuclear plant fleet.

Privatize the revenue generating division and contract out research division? Make sense for private company looking to make profit but does not make sense if you care about Canadian interest and its future international reputation in research and technology. So taxpayer would be left with a totally profitless crown corporation and paying more to contracting firm.

For now, Harper is keeping a tight lid on the privatization plan for AECL.

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2 Comments »

  1. “The government want to sell off the only division at AECL that has large potential to see huge profit in the near future”

    Yeah, they’re still using this line… the same one they’ve been using for the last 40. “Don’t cancel us now, we’re about to make all this money!” But they don’t. And they’re not going to, they simply cannot compete with the larger companies like Westinghouse, Ariva and GE, not on price and not on marketing muscle.

    Maury

    Comment by Maury Markowitz — December 21, 2009 @ 12:56 pm | Reply

    • Can’t compete? What about the reactor that was built in China and Korea? If they can’t compete, why did China recently signed agreement to adopt CANDU to use Thorium. China have more Thorium than Uranium and CANDU is best suited for that. Of course if you listen to Harper, they keep dissing CANDU as if nobody want to buy CANDU, just so they can justify the sale. The truth is China is set to be the world’s biggest market for new nuclear plant and they are very interested in CANDU.

      Comment by cyberwanderer — December 21, 2009 @ 6:12 pm | Reply


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