CHINTA PUXLEY Published Friday July 6th, 2007

The sale of Atomic Energy of Canada Ltd. shouldn't be negotiated or even discussed behind closed doors, the Liberals charged Friday following speculation the Crown- owned nuclear giant is close to a deal with General Electric.

Despite a published report saying both sides are in advanced negotiations, both AECL and Natural Resources Minister Gary Lunn's office said they don't have anything to announce.

The minister's office said the government isn't negotiating with any company "at this time" but does get "expressions of interest in AECL from time to time."

Speculation about a partnership with General Electric or French nuclear giant Areva has been rife since the Conservatives were elected in January 2006, with several similar reports leaking out that the jewel in Canada's nuclear crown was close to being partially sold.

Liberal Mark Holland said it's high time the Conservatives brought their intentions out into the open and stopped discussing the future of its nuclear corporation in private.

The matter should be brought before the natural resources committee where the pros and cons of such a partnership can be weighed in public, he said.

"They're having negotiations in secret, behind closed doors," Holland said.

"This is a matter of major public concern. It deserves public debate. There shouldn't be meetings happening behind the scenes that decide the future of the AECL. Canadians deserve to be engaged in that debate."

Some analysts say the Conservatives are intent on selling off part of the corporation, which is responsible for building Candu nuclear reactors, but most don't expect to hear a final sale announced any time soon.

AECL spokesman Dale Coffin would not comment on what he called "speculation and rumours," but disputed suggestions that AECL needs a strategic private-sector partner to compete in the world.

The Crown corporation has built six reactors in the last 11 years, and a seventh is about to go on stream in Romania, he said.

"That's a lot in a period where the industry has been at a snail's pace," he said. "Now every country in the world is looking at the nuclear option, and we think we're in a very strong market position."

Murray Elston, president and CEO of the Canadian Nuclear Association, said it's not inevitable that AECL must partner up with a private company to survive. The attention on Canada's nuclear giant is encouraging and shows the country has valuable expertise in the industry, he said.

"The question for the industry worldwide ... is about having the capacity to meet the demand that's out there," Elston said. "I'm not sure that consolidation is the way to necessarily do that."

Despite all the speculation, Elston said it usually takes some time to negotiate such a complicated partnership.

"The government here in Ottawa is going to be very cautious," he said. "While I think philosophically they're interested in having government out of commercial enterprise, they'll want to make sure they get value."

One industry analyst said getting value for taxpayer dollars will be a challenge under such a public-private partnership.

Tom Adams, executive director of Energy Probe, said past partnerships with AECL have left taxpayers on the hook for huge cost overruns and liability for messy production.

Meanwhile, he said, the private company has walked away with the profits. But Adams said Lunn has personally been campaigning to sell off parts of AECL since he became minister of natural resources.

"It's a complete disaster for taxpayers," Adams said. "That's AECL's track record when it comes to privatization, and that raises a major concern about what AECL's up to now."



SHAWN MCCARTHY OTTAWA Globe and Mail Update July 6, 2007 at 11:28 AM EDT

The federal government is denying a report today that it is negotiating with General Electric Co. to sell a major stake in Atomic Energy of Canada Ltd. to the U.S. giant "There are no formal negotiations under way with any company," said Kathleen Olson, Natural Resources Minister Gary Lunn's press secretary.

However, she refused to comment on whether the government is holding informal talks with GE or any other company regarding the privatization of AECL.

A Toronto newspaper reported that Ottawa is an "advanced negotiations" with GE toward a deal that would see the two nuclear reactor vendors enter into a strategic partnership, with GE taking an ownership share of AECL.

The federal government approached industry executives last fall to discuss the AECL's future, amid a growing trend toward consolidation among international nuclear power companies.

The Conservatives are looking at different business models for AECL, including the sale of an ownership stake to one of several companies that have expressed interest. They include GE, France's Areva NP, and Bruce Power Inc.

And government insiders have indicated they expect cabinet to make a decision before the end of the year.

GE, one of the world's largest industrial conglomerates, has merged its nuclear business with that of Japan's Hitachi Ltd. in an effort to win more reactor sales in the fiercely competitive international marketplace.

AECL is eager to sell its new ACR reactor to Ontario and New Brunswick, but is running into stiff competition from Areva and has yet to have the new ACR design certified by the federal Nuclear Safety Commission.

AECL is also bidding to provide reactors in the United Kingdom, in competition with GE-Hitachi, Areva and another consortium led by Westinghouse Electric Co. LLC and Japan's Toshiba Corp.

Mr. Lunn has frequently expressed his support for AECL and the Canadian nuclear industry and recently moved to eliminate a significant roadblock to future expansion by approving a long-term plan for the disposal of radioactive waste.

However, AECL is still reliant on federal tax dollars for its development program, and the sale of shares to a private company could lessen the taxpayers' exposure.