Canadian National Energy Alliance selected to manage and operate former AECL labs

Canadian National Energy Alliance (CNEA) has been selected as the manager and operator of Canadian Nuclear Laboratories (CNL — the massive nuclear facility in Chalk River spun off last year from Atomic Energy of Canada Ltd. Unveiled June 26th, the consortium's selection culminates a seven-year process triggered by a review recommending that the crown corporation be restructured.

CNEA won the bid over three competing consortia and will enter negotiations with the government for the transfer of management and operating authority under a government-owned contractor- operated (GoCo) model selected by the government in 2013. The consortium — composed largely by US firms or subsidiaries of foreign-based multinationals — will reportedly sign a six-year contract with a four-year extension option. Its mandate is to:

• deliver on Canada's obligations for decommissioning and waste management;

• provide nuclear expertise to support federal responsibilities;

• offer S&T services to third-party customers on a commercial basis; and,

• Strengthen accountability and bring private sector rigour and efficiencies to the management of all facilities and services.

The Canadian component of CNEA is SNC-Lavalin, the Montreal-based construction and engineering multinational that purchased AECL's Candu reactor division in 2011 for $15 million through its wholly owned subsidiary Candu Energy Inc.

At a public meeting last fall in Deep River ON near the CNL Chalk River facility, a CNEA spokesperson said the consortium had a "vested interest" in the facility as well as "keeping the Candu brand alive".

None of the involved parties have addressed the possibility of constructing a new nuclear reactor to replace the 58-year-old National Research Universal (NRU) reactor.

The government announced earlier this year that the NRU would be officially shut down at the end of FY17-18 (R$, February 10/15). The scientific community that depends on the NRU for its research and skills training have acknowledged a "neutron gap" that could become permanent. Many researchers are making arrangements with nuclear facilities outside Canada to continue their work.

While the fate of AECL was being determined, the federal government has poured hundreds of millions of dollars into its operations to maintain and upgrade facilities to make them more attractive for private sector bidders. In the most recent Budget, AECL received $72.3 million for FY 2015–16 "on a cash basis... to maintain safe and reliable operations at the Chalk River Laboratories."

Financial support

In 2011 — the year of the Candu sale to SNC-Lavalin — the Budget allocated $405 for FY11-12 "to cover anticipated commercial losses and support the corporation's operations, including to ensure a secure supply of medical isotopes and maintain safe and reliable operations at the Chalk River Laboratories." A staggering $2.2 billion was allocated in the previous three years between 2008 and 2010.

More recent injections of federal cash subsequent to the Candu sale to SNC include $117 million for FY14-15 and FY15-16 (2014 Budget), $141 million for FY13-14 and FY 14-15 (2013 Budget), and $107 million in FY12-13 "to ensure a secure supply of medical isotopes and maintain safe and reliable operations" (2012 Budget).

Medical isotope production will not be part of CNL's operations under CNEA management. The government previously announced its intention to get out of the isotope production business by 2016.

Note: CNL and CNEA did not respond to requests for interviews.

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