[ RadSafe ] MDS Sues AECL, Canada Over Reactor Cancellation

[John R Johnson]

Colette

This ex AECL'er thanks you for this update. When I was at AECL/CRL, CRL was 
called CRNL and the Maple reactors were "in the future".

John
***************
John R Johnson, PhD
CEO, IDIAS, Inc.
4535 West 9th Ave
604-676-3556
Vancouver, B. C.
V6R 2E2, Canada
idias at interchange.ubc.ca

----- Original Message ----- 
From: "Colette Tremblay" <Colette.Tremblay at ssp.ulaval.ca>
To: <radsafe at radlab.nl>
Sent: Thursday, July 17, 2008 12:12 PM
Subject: [ RadSafe ] MDS Sues AECL, Canada Over Reactor Cancellation


MDS Sues AECL, Canada Over Reactor Cancellation





Reuters Health Information 2008. © 2008 Reuters Ltd.
Republication or redistribution of Reuters content, including by framing or 
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group of companies around the world.

By Scott Anderson

TORONTO (Reuters) Jul 09 - MDS Inc said on Wednesday it has filed a C$1.6 
billion ($1.58 billion) claim against Atomic Energy of Canada Ltd and the 
Canadian government for scrapping a reactor project that would have supplied 
the company with medical isotopes.

MDS, a medical services company, said its claim follows a May decision by 
the government and AECL to scuttle the Maple nuclear reactor project without 
giving the company prior notice or offering consultation. MDS sells medical 
radioisotopes, used in cancer treatment, to hospitals and other health-care 
providers.

Mississauga, Ontario-based MDS, which also specializes in analytical 
instruments, molecular imaging and contract research, said it is seeking an 
order to compel AECL, a government agency with responsibility for nuclear 
products, to fulfill its 2006 contract to provide a 40-year supply of the 
isotopes. If not, MDS said it would seek the damages.

"It was our last resort after trying as best we could with conversations to 
get a resolution here that made some sense," Stephen DeFalco, MDS president 
and chief executive, said in an interview.

"But we need them to honor their commitment to finish these reactors and to 
provide 40 years worth of supply. It's very important for our patients and 
it's very important for our business."

Maher Yaghi, an analyst at Desjardins Securities in Montreal, said the 
company had to take legal action now to address long-term supply of the 
isotopes.

"They have to do what they have to do. This is something that you can't wait 
a long time before you start because you know how the court system works, 
especially if you are suing the government," Yaghi said.

Natural Resources Minister Gary Lunn said the government would defend itself 
and AECL against the claim.

"Neither the government nor AECL accept the allegations made in the 
statement of claim, accordingly we will be taking steps to defend AECL and 
the (government)," Lunn said in a statement.

In a surprise move in mid-May, AECL said it was halting work on the Maple 
reactor in Eastern Ontario because of huge cost overruns and other problems. 
Maple had been designed to replace an aging reactor at Chalk River in 
Ontario that now supplies isotopes.

The Maple project was to be completed by the year 2000 at a planned cost to 
MDS of C$145 million. By 2006, the project was still not finished and costs 
had more than doubled, with MDS's investment exceeding C$350 million.

The two sides reached a new agreement in 2006 stipulating that AECL would 
bring the reactors into service by October 2008 and supply 40 years of the 
isotopes.

"AECL is a commercial entity. AECL signed a commercial contract and that 
contract has certain rights and obligations as part of that and this is 
something for the courts to sort out," DeFalco said.

Worldwide, there are only four commercial producers of the isotopes, with 
MDS's Nordion division supplying the most. DeFalco said the company could 
obtain quantities of the product through backup agreements with these 
producers.

Yaghi said it's possible the company may be able to write down the costs it 
incurred on the Maple project, but it would probably wait until the outcome 
of the legal battle is clear before it does so.

($1=$1.01 Canadian)

(Additional reporting by Louise Egan in Ottawa; Editing by Peter Galloway)



---

Colette Tremblay


Spécialiste en radioprotection

Service de sécurité et prévention
Université Laval


Pavillon Ernest-Lemieux

2325, Rue de la Vie-Étudiante

Local 2527
Québec (Québec) G1V 0B1
CANADA


(418) 656-2131 poste 2893
Télécopie: (418) 656-5617

Colette.Tremblay at ssp.ulaval.ca <mailto:Colette.Tremblay at ssp.ulaval.ca>
www.ssp.ulaval.ca/sgc/radioprotection 
<http://www.ssp.ulaval.ca/sgc/radioprotection>
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