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This is the moment Atomic Energy of Canada Ltd. has been waiting for. After a two-decade slump in North American demand following the Three Mile Island and Chernobyl disasters, the nuclear industry is poised for growth. The Crown corporation's huge Candu reactors have a proven track record, and the phrase "on time, on budget" is splattered across AECL's promotional literature. The company has delivered six Candus to customers in Romania, China and elsewhere in the past 11 years, all built on or ahead of schedule, and on or under budget—an amazing feat in an industry with a gruesome history of cost overruns. AECL boasts the "strongest project management delivery capability of any nuclear vendor in the world."

Too bad the claim isn't entirely true. AECL has also developed Maple mini-reactors, which are about the size of an office chair and make isotopes for medical imaging, diagnosis and radiation therapy.This looked like a very promising market in the 1990s, but you don't hear much about the wee Maples these days—and for good reason. They don't work, or at least they don't work well yet. In 2005, the Canadian Nuclear Safety Commission renewed the operating licence of the Maples, but said they came in "below requirements" in three areas—operating performance, quality assurance and environmental protection. In a report published last year, the commission said the first two Maples, which were completed by 2000, had a flaw that "has an undesirable impact on safety."

The result is a project that is late and over budget. Worse, it may jeopardize Canada's global dominance of the isotope industry. The Maple reactors were built at AECL's Chalk River laboratories, near Ottawa. They were designed to make isotopes for MDS Nordion, a unit of Toronto-based MDS Inc. Nordion was spun off from AECL in 1988, and bought by MDS in 1991. It's the world's largest supplier of molybdenum-99, a parent isotope of technetium-99, which is used to image the brain, heart, lungs and other organs. Other isotopes include xenon-133, used in lung scans and brain blood-flow studies. MDS says the global isotope industry generates revenues of about $3.5 billion (U.S.) a year, and it is growing at an annual rate of 5% to 7%.

Yet the two existing Maples have yet to come into commercial operation. MDS is still relying primarily on AECL's 50-year-old NRU (National Research Universal) reactor in Chalk River to provide the isotopes. The old geezer was supposed to be decommissioned in 2005, but now won't be allowed to retire until at least 2011.

The Maple reactors don't use Candu technology. They use low-enriched uranium; Candus use natural uranium. In 1996, MDS agreed to buy two Maples for $140 million, much of that an interest-free loan from Ottawa. They were supposed to enter commercial service in 2001. They didn't. (Curiously, a South Korean reactor based on the Maple design is operating well.) A few years later, MDS got fed up with the costs and entered mediation with AECL. In a settlement announced last year, MDS handed the reactors back to AECL. In exchange, AECL gave MDS $68 million in cash and promissory notes, and a 40-year isotope supply agreement worth $344 million. Up to that point, MDS had spent about $393 million on the reactors. AECL is now fully responsible for their cost.

What went wrong? As the Maples were powered up, the rate of the nuclear reaction in the core increased to slightly beyond the desired levels. But Klaus Wittann, the Maples' project director, says he has "no lack of confidence" that the first Maple will be operating by late 2008, with the second opening for business a year later. Perhaps, but AECL has miscalculated the start-up dates in the past.

It looks as if the Maples will get fixed—one nuclear expert says the flaws are "not fatal" to the design—but when and at what price? AECL's "on time, on budget" reputation has certainly been hurt. That can't help with Candu sales either. The International Atomic Energy Agency reports that 28 nuclear reactors are under construction worldwide, and dozens more are contemplated as an alternative to greenhouse-gas-emitting natural gas and coal-fired electricity plants.

It's worse when you consider that the Maple, warts and all, is AECL's baby. The company can't blame foreign contractors, equipment suppliers or non-AECL engineers and scientists for flaws. If the Maples are delayed again, or if MDS has to go outside Canada to get its isotopes, AECL's ambition to ride the nuclear renaissance in both medical isotope reactors and Candus will surely take a hit.