SNC Lavalin consortium selected as preferred bidder for Atomic Energy subsidiary

The Atomic Energy Canada Limited plant in Chalk River, Ontario and the Canadian National Energy Alliance (CNEA) logo (Power plant photo courtesy of Canadian Press/Fred Chartrand)

MONTREAL – Ottawa says it has completed a multi-year restructuring of Canada’s nuclear operations with the selection of a preferred bidder to operate a nuclear laboratory in eastern Ontario that is one of the world’s largest producers of medical isotopes.

Canadian National Energy Alliance was chosen Friday over three other engineering groups to manage and operate Canadian Nuclear Laboratories (CNL), a subsidiary of Atomic Energy of Canada Ltd.

The consortium includes SNC-Lavalin (TSX:SNC), CH2M HILL Canada Ltd., Fluor Government Group Canada Inc., EnergySolutions Canada Group Ltd. and Rolls-Royce Civil Nuclear Canada Ltd.

“Today’s announcement marks the conclusion of a six-year process enhancing the efficiency and prosperity of the Canadian nuclear industry,” Natural Resources Minister Greg Rickford said in a statement.

The government and CNEA are expected to finalize a contract in two months followed by a six-month transition.

Department spokeswoman Jacinthe Perras said the selection process included the use of third-party nuclear, financial and legal advisers and an independent fairness monitor. All bidders also had to comply with the government’s integrity framework.

The winning consortium said it will bring “private sector rigour and efficiency” to Canada Nuclear Laboratories while reducing risks and containing costs for taxpayers.

“There is a real interest to improve the facilities at the site, to expand our mission areas, to increase the capabilities here and polish the jewel that we have here of the Canadian nuclear laboratories,” CEO Mark Lesinski said in an interview.

CNL employs about 3,300 people, mostly at the Chalk River Laboratories whose nuclear reactor, which has been in operation since 1957, is slated to be decommissioned in 2018.

However, the government said the site has “an enduring science and technology mission.”

Lesinski said there are no current plans for job cuts.

“There is growth and we’ll probably need resources down the road at some point, but I’m not sure when that will be,” he added.

CNL will focus on managing radioactive waste and decommissioning, performing science and technology activities and supporting Canada’s nuclear industry through access to science, technology facilities and expertise.

In 2011, the government sold the AECL division that produces Candu nuclear power plants to SNC-Lavalin for $15 million plus royalties.

In addition to AECL’s restructuring, the government said it has spent $325 million on research infrastructure at CNL, updated Canada’s nuclear liability legislation and opened trade opportunities in growing energy markets such as China and India.

Nuclear power generates nearly 15 per cent of Canada’s electricity, including more than half the electricity supply in Ontario.

Associations that work with Canada’s nuclear industry welcomed the announcement.

“This will allow Canada’s nuclear industry and the Chalk River site to be on a more stable footing for the 21st century and allow a new nuclear energy policy to emerge,” said John Barrett, president of the Canadian Nuclear Association, whose members include the winning partners.

The Organization of Canadian Nuclear Industries, which employs more than 12,000 specialized engineers, technologists and tradespeople, said its member companies want to work closely with CNEA.

The idea is to convert science and technology innovations at the Chalk River laboratories into “successful commercial nuclear products and services that benefit utility customers and create high-quality jobs in the communities across Canada in which OCI companies operate.”