Government opts for GoCo model as it launches Phase II of AECL restructuring

The federal government will pursue a public-private model for the management of Atomic Energy of Canada Ltd (AECL) as it proceeds with a restructuring of the crown corporation and Canada's largest major science facility. The announcement of a competitive process to select one or more private sector operators was made late last month but it made no mention of the key issue facing AECL's future — a replacement of the aging National Research Universal (NRU) reactor, which was completed in 1957 and is now the world's oldest operator research reactor.

The process for restructuring AECL is being run by Natural Resources Canada (NRCan) which assembled a restructuring team last year which will be augmented with additional financial and nuclear advisors as the selection process moves forward.

The majority of AECL's personnel and research infrastructure is located at its vast Chalk River Laboratory site, with waste management at its Whiteshell MB facility which is currently being decommissioned.

Phase I of the restructuring was completed in 2011 with the sale of the CANDU division to SNC Lavalin (R$, August 9/11). Phase II was launched in early 2012 and included a request for expressions of interest that generated 46 responses from private sector organizations, academics, industry associations and local governments.

The latest announcement revealed that the government has opted to proceed with a government-owned, company-operated (GoCo) model which is used for major science facilities in the US and UK but has not been employed by the federal government in more than 20 years.

In announcing the Phase II restructuring plan, NRCan minister Joe Oliver said the preferred GoCo option would be "introducing private sector discipline and commercial vision" into AECL, while emphasizing that "we are not selling or closing the Chalk River Nuclear Laboratories."

In remarks to the Canadian Nuclear Association, Oliver said the competitive procurement process for selecting new private sector management would take about two years to complete.

"As part of the GoCo process, we will be assessing the business cases for an industry-driven nuclear innovation agenda, based on a cost-shared approach," he said. "Over time, the delivery of AECL's science and technology services to industry will need to move to full cost recovery".

The government has determined that the future AECL will focus on three key objectives (see chart) none of which appear to have a strong research component. The vagueness of AECL's future mandate coupled with silence on the core issue of a replacement reactor has some worried about the future of nuclear research in Canada and retention of a wide range of expertise and skill sets that would be lost without a strong research component.

"The issue is what they are going to run rather than how they are going to run it. The GoCo model is not unreasonable but if there's no reactor, there's no future," says Dr Dominic Ryan, president of the Canadian Institute for Neutron Scattering (CINS) "It all comes into focus in 2016 when isotope production comes to an end, the contract to support SNC Lavalin ends and the license to operate the facility expires."

Ryan disputes the contention that the CRL can be operated on a full cost recovery basis and points out that the research community does not have the financial resources or access to funding mechanisms to pay for using the AECL facilities in such an environment.

"(Government) doesn't understand what research is. It's just noise fundamentally. Industrial research is not research, it's way down the line at development,' he says. "If they don't replace the reactor, there's no future for scientists at the site."

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