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"We see ourselves in licencing pole position" - Hugh MacDiarmid, AECL CEO, speaks to NEI about the Cernavoda contract, the ACR-1000 licencing, and thorium's potential for AECL

Q. Could you take me through the Cernavoda deal? what exactly would you be supplying?

A. We are looking at the separate commercial aspects of the project, working closely with EnergoNuclear to do an evaluation of the existing infrastructure, and safety and regulatory compliance, and ensuring the specification of Cernavoda 3&4 meet them. We need to bring the units up to the highest and most modern levels of regulatory compliance.

We will have 30-40 people working on the project. We have a well-defined 12 months of work. At the conclusion of that work, EnergoNuclear will be in a position to hopefully move forward and proceed with the actual commitment to the project.

Q. So the decision to restart construction has not been taken?
A. No. The consortium brings together the Romanian utility Nuclearelectrica with six partners with a variety of European facility operations. The consortium will make a final decision, based on this work, and other factors such as financing.

Q. So you are handling the commercial elements of the project as well as the technical aspects?
A. In one respect, one of the important things about these projects is that they are extremely complex, and you need to be clear about the scope of the work packages. One of the things we are doing is working with EnergoNuclear to define the scope of the balance of plant, the balance of steam, the engineering, procurement and construction elements, and work with them to develop competitive bids for significant work packages.

Q. How many packages might there be?

A. We are breaking the project down. It is pretty premature now, but ultimately it will be a number of contractors, particularly on equipment supply.

Q. First news of the consortium was issued in 2008; why has it taken 2 years for a technical consultant to become involved?

A. There was a restructuring of the consortium. In my view, given the timing, the restructuring of the consortium has been gotten forward relatively quickly.

Q. Our handbook says that AECL provided the CANDU 6s at 1&2, but 3&4 were to be supplied by FECNE. What is that?

A. There will be different partners involved in the actual construction and delivery of the plant. Cernavoda 3&4 are based on the CANDU 6 design. We expect to play a significant role in the NSSS, and in design and componentry. We expect other partners for project delivery in construction, over the entire project, and in the balance of plant, which is where traditionally we have worked with partners.

Q. So the site does not have any equipment?
A. What has been built is the civil structures, the containment.

Q. Have you seen it?
A. Yes, not that my eyes are technically savvy...You basically have silos, that are open to the air, at a starting point there is existence of the civil structures up to a point. There is no dome; these are partially-constructed civil structures.

Q. There must be big questions about whether these structures could still be used?
A. This is not to say that there are big questions. But we need to verify their soundness. That is part of the work. As far as the conventional island goes, that is also just civil structures, none of the facilities.

Q. Can I ask you some questions about Canada?
A. First can I finish on this? We are very pleased to have this project going now. Cernavoda 3&4 is a solution that works best for Romania to bring new nuclear into the supply mix, and we are pleased with the partnership that we have to date with 1&2, and indeed 2 is now one of the highest-performing vendor units.

Q. Were you involved in the 2 restart?
A. Yes, we took over overall project management responsibility for 2. We were involved right through commissioning.

Q. Would you be looking to do that again?
A. It will be determined by them the exact extent of our work. We'll work with them and provide our design and procedural capabilities. We're going to be available. There are procedural rules in Romania to do with competition. One of the features is that elements of the contract will be open to bidding. We don't want to get into a conflict of interest position. EnergoNuclear will decide. We have first committed to them, to bring our technology in the form of a reactor design, and the procedures for qualified selection of vendors for supply. Beyond that, we will work with them to structure a project that's going to work, pass tests and requirements. We will look to them, they made a determination in the ways we are involved, and will work with them to put together competitive bids and supply a design.

Q. Is there any news about the ACR-1000 negotiation with Ontario Power Generation? I see that the AP1000 has passed the Canadian regulator's pre-application review process.

A. We certainly noticed that the AP-1000 passed the CNNC review. As I am sure you know, we have completed phase 2, the 'no fundamental barrier' lever, and are now well into phase 3. We see ourselves in licencing pole position in Canada. Relative to the Ontario government, it did ask vendors for bids past its original submission deadline, and we are now coming to the end of that extension period, and the Ontario government has not signalled its intentions. We are ready to engage to enter negotiations. We started from the premise that they did identify that we submitted the best bid, the only one that was compliant with requirements; we are waiting to see what transpires.

Q. What effect, if any, do you think President Obama's pro-nuclear state of the union speech might have on Canadian utilities?

A. The US is of course our immediate neighbour. Their energy policies are rather different from our own. The president signalled a new era of nuclear in that country. I expect that the Canadian supply chain will be anxious to participate in that. We at AECL still have no plans to pursue the licencing of a reactor there.

Q. Are there any more plans to build more CANDUs in China? Is China planning to build its own CANDU reactors?

A. Thorium is in fact the platform upon which CANDU new-builds in china may be available. They recognised that CANDU was the right technology for it, but things move slowly. We still think there is an opportunity for a reactor in china.

Q. What news is there on the AECL sale/restructuring?
There was a public announcement of the government in early December that we are inviting bids from international investors; that process is underway, but shareholders would be better to speak to than I.