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A warning sign near a nuclear reactor at the Atomic Energy Canada Ltd. plant in Chalk River, Ont., on Dec. 19 2007.Fred Chartrand/The Canadian Press

Ottawa's delay in its bid to sell Atomic Energy of Canada Ltd. is having a corrosive effect on Canada's nuclear industry, with highly trained workers being idled for lack of contracts.

SNC-Lavalin Group Inc. remains in the hunt for the Crown-owned AECL, industry sources said Tuesday. But the Montreal-based engineering company is the sole remaining bidder after Ontario-based Bruce Power indicated to its employees that it would not be involved in the auction, which Ottawa formally launched 14 months ago.

But there is growing frustration that the Harper government has left the future ownership of AECL in doubt for years, undermining the company's effort to sell new reactors to Ontario and drum up additional global business.

"We are definitely getting concerned that in circumstances where we had expected we would be prospering, things are becoming difficult," said Neil Alexander, president of the Organization of Candu Industries, which represents 160 companies that supply AECL.

Those companies - including major construction and engineering firms - employ 30,000 workers in the nuclear business, and many of those employees are being diverted to other sectors or left with little work.

Mr. Alexander urged the federal government to sit down with Ontario and work together to ensure AECL can complete the sale of new reactors to the province.

"It is of very great strategic importance for the industry because it is not only [about the]immediate opportunity through the direct contracts, but it is the ability to showcase our technology to the rest of the world and demonstrate our confidence in the technology."

Ottawa has demanded strict confidentiality from the potential bidders, but foreign companies that had expressed interest in purchasing AECL have since confirmed that they did not participate in the process.

That left SNC-Lavalin - AECL's main engineering partner - and Bruce Power, which operates several Candu units near Kincardine, Ont. Bruce has always described its interest as defensive as it looked to ensure a trained work force remains in place to service its reactors. For its part, SNC will not commit to finance the completion of AECL's new advanced Candu reactor, leaving the company to compete with retooled versions of smaller, older models.

Neither company would comment on its interest in pursuing AECL.

Last summer, Ontario Premier Dalton McGuinty had asked Prime Minister Stephen Harper to put the sale of AECL on hold until the two governments could negotiate the sale of two reactors, but that request was rebuffed.

The Harper government is eager to rid itself of the financial problems of AECL, which has lost $493-million in the past two years. The government has allocated some $1.6-billion to the company over that period, including $446-million to cover cost overruns at its Candu refurbishment projects in New Brunswick, Ontario and South Korea, and $228-million for development of the advanced Candu reactor.

Ontario Energy Minister Brad Duguid said Tuesday that the province remains committed to purchasing two new reactors, and would prefer to buy Canadian technology to maximize the industrial benefits.

"We're still confident that we'll be moving forward with this purchase, but the federal government's efforts have been less than stellar in terms of making this happen on a timely basis," Mr. Duguid said in an interview Tuesday.

Ontario is moving forward with plans to refurbish reactors at Darlington plant.

The minister said the two governments should figure out how to share the financial risks that would accompany a new reactor project, but that the province is not interested in taking an equity stake in AECL.