State control urged for Fukushima plant
TOKYO – The Japanese government told the operator of the ravaged Fukushima Daiichi nuclear power plant yesterday to consider accepting temporary state control in return for a much-needed injection of public funds, in effect proposing an interim nationalisation of the struggling utility.
The order came after Tokyo Electric Power Co, also known as Tepco, requested 689.4 billion yen (€6.8 billion) in government aid to help pay for its response to the nuclear accident at its Fukushima site. The calamity, caused by the March 11th earthquake and tsunami, forced the evacuation of more than 100,000 people and led to a massive radiation leak.
The utility may have to pay 4.5 trillion yen (€44.2 billion) in compensation payments by 2013, a government panel said in October, a sum that threatens to render the company insolvent. The company will also most likely be forced to decommission all six nuclear reactors at Fukushima at a huge cost, while the future of four other reactors at a second site is also on the line after a national outcry over the disaster.
Meeting with Tepco executives yesterday, the Japanese trade minister, Yukio Edano, urged the utility to consider options including ceding control to the government. Tepco “should not exclude various possibilities, including temporary state control” in coming up with a comprehensive turnaround plan, promised for next spring, Edano said.
He asked the utility “to work toward restoring a company in five to 10 years that can win back public trust.” It remains unclear whether the government will force changes that experts have long called for at Tepco, like changes to management or a break-up of the monopoly the utility enjoys over electricity in the Tokyo area.
The details of a possible government takeover also remain murky. A new government-backed fund may buy preferred stock in Tepco, effectively nationalising the utility to avoid insolvency, the Yomiurinewspaper reported this month. The government may ask banks to lend 1 trillion yen (€9.8 billion) to the company, Yomiurisaid. Edano refused to comment on details, saying nothing had been decided. Tepco has already been granted initial funding of about 900 billion yen (€8.8 billion)from the government-backed fund to help compensate victims. The fund is financed with taxpayers’ money, as well as from contributions from major electricity companies in Japan. In theory, Tepco would repay any money it receives.
Tepco’s president, Toshio Nishizawa, said the company would seriously consider various possibilities for the company. The company wanted to ensure that it “never let such an accident happen again,” he said. – ( New York Times)