All players still in nuclear bidding race
TORONTO - All three bidders are still in the running to build new nuclear reactors in the province, company and government officials said Thursday, as critics charged that speculation about a withdrawal highlights tensions over who will be on the hook for cost overruns.
Energy and Infrastructure Minister George Smitherman denied a report that U.S. nuclear giant Westinghouse Electric Co. has pulled out of the race because it just wanted to supply technology and not be responsible for cost overruns and delays.
The government wants a company to design and build reactors on a fixed-price basis so ratepayers aren't saddled with billions of dollars in debt if the project goes over budget.
When questioned in the legislature Thursday, Smitherman called the reports "erroneous" and said Westinghouse submitted paperwork to Infrastructure Ontario "as recently as a few days ago."
The minister made the comments despite telling a newspaper a day earlier that Westinghouse would prefer to play a more modest role in the process.
"We want to have a process that has risk transfer," Smitherman said Thursday. "That's a difficult point of negotiation -- no one would pretend otherwise around that. But it's an essential and important principle for the ratepayers of the province of Ontario.
"We're going to do our best to manage the process in that context, and we feel confident that we're headed towards a good result."
Westinghouse spokesman Vaughn Gilbert also confirmed the company "continues to pursue this opportunity."
Greenpeace energy analyst Shawn Patrick Stensil said Westinghouse's apparent hesitation highlights the risks associated with the government's nuclear plan.
"The nuclear vendors know more than anyone the risks of proceeding with a plant -- they know that taking that risk on themselves could mean bankruptcy," Stensil said.
"If you can't get the nuclear industry to assume the risk of their own reactors, why should the public trust them?"
Stensil said the most recent indication the industry didn't want to take on the extra risk came earlier this month, when Smitherman announced the province was again delaying the deadline for the final bid proposals for two new reactors to be built at the site of the existing Darlington nuclear station.
The deadline for final bids was originally set for October, then Dec. 31, and it has now been pushed to sometime in early 2009. Crown-owned Atomic Energy of Canada Ltd. and France's Areva Group are also in the running to provide the complete package.
Stensil also noted that Areva and AECL have both started pre-licensing of their reactor designs, but not Westinghouse.
While neither side confirmed doubts, gossip and speculation is all industry watchers have to go on because there's a blackout on any public debate on the reactor bids, he said.
"It's easy for the government to claim that everything is normal," Stensil said.
NDP Leader Howard Hampton challenged Smitherman in the legislature, saying while Westinghouse may be willing to supply some equipment, "they're not interested in the bidding process that the McGuinty government has outlined."
"The government doesn't want to admit that these big nuclear projects are subject to huge billion-dollar cost overruns, but in the back room, that's exactly what they're negotiating with," Hampton said afterward.
"The private companies always want the government standing in the background holding the bag, accepting all the risk."