AECL worried about Ont. nuclear cost overruns
As Ontario comes close to deciding who it will pay $20 billion to build two new nuclear reactors, the Canadian bidder is already worried that it will face large cost overruns.
The warnings are contained in the secret documents left by a former member of Natural Resources Minister Lisa Raitt's staff at CTV's Ottawa bureau recently.
In the documents is a page dealing with the bid by Atomic Energy Canada Ltd. (AECL), which hopes to win the contract. On that page is the following statement: "... There is the risk there could be large cost overruns."
It goes on to say that certain conditions the federal government imposed on AECL "have resulted in the AECL consortium submitting a highly-priced bid."
Ontario would be likely to ask AECL to lower its price, it said.
The last nuclear plant constructed in Ontario was the Darlington project, which went over-budget by about $15 billion when it was finally opened nearly 20 years ago. Ontario's hydro customers are still playing off that debt.
The nuclear industry has said it has gotten better at building reactors since then. New reactors have been completed on time and on budget, it has claimed.
But to make things riskier, AECL is trying to sell Ontario a new type of reactor that hasn't been tried anywhere in the world.
Opposition politicians say the warning by AECL is a sobering reminder that nuclear plant construction costs are anything but predictable.
"I would say that the people watching this show are probably going to be stuck with that bill -- and they're going to be stuck with a very big bill," said NDP MPP Peter Tabuns, a former head of Greenpeace.
AECL is competing for the lucrative contract with France's Areva and the U.S.'s Westinghouse.
The two new reactors will be located at the Darlington site near Oshawa.
Premier Dalton McGuinty said in April that price won't be the determining factor in awarding the bid. Instead, cabinet will be looking at who can provide the most jobs in Ontario, he said.
However, Infrastructure Minister George Smitherman also said the province would be considering price, performance and transfer of cost overruns.
The deadline for bids is June 20, but the government has said it doesn't expect to make a decision by then.
CTV Toronto's Paul Bliss said AECL told him it won't comment on someone else's document.
A spokesperson for Smitherman said the winning bid will have to deliver on time and on budget, he said.
There is yet another nuclear cost issue raised in the papers.
Bruce Nuclear Power, which operates near Kincardine, is in the middle of repairing two nuclear units. But the documents say the presence of rust in Reactor 2 forced AECL to pay more for labour costs.
AECL may file a claim against Bruce Power for the rust problem and for other events that affected progress, the notes indicate.
With a report from CTV Toronto's Paul Bliss