TOKYO Dec 20 Japan will chip in more taxpayer
money and other financial support to help Fukushima plant
operator Tokyo Electric Power Co clean up the world's
worst nuclear disaster in a quarter century, officials said on
Friday, the latest government lifeline for the embattled
Criticism of the utility's handling of the massive clean-up
from the March 2011 disaster had sparked calls to spin off
Fukushima-related work and place it under government control or
even put Tepco, as the company is known, into bankruptcy.
Prime Minister Shinzo Abe's government, however, has instead
opted to provide fresh financial support while backing an
internal Tepco restructuring due to what experts termed
reluctance to face legal responsibility for the disaster or risk
ripple effects on the wider power industry.
"I want to address vital issues by making clear the roles of
Tepco and the government and make concrete the path to
rebuilding the lives of victims and affected local governments,"
Abe said at a meeting to finalise the new steps.
Abe, in the centrepiece of Tokyo's successful bid in
September to host the 2020 Olympics, said he would be
responsible for a plan to cope with the legacy of the disaster
in which a huge earthquake and tsunami caused triple meltdowns,
spewing radiation and forcing some 160,00 residents to flee.
"They (the government) are picking up the tab," said Martin
Schulz, a senior research fellow at Fujitsu Research Institute.
"The bottom line is that government oversight is increasing, but
the management remains in Tepco's hands."
Under the new plan, the government, which essentially
nationalised Tepco last year with a 1 trillion yen ($9.59
billion) injection of public funds, will nearly double to 9
trillion yen ($86.35 billion) the amount of interest-free loans
it provides the utility through the state-backed Nuclear Damage
Liability Facilitation Corp (NDLFC).
Under the original scheme crafted to keep Tepco afloat after
the disaster, Tepco was liable for compensation, decontamination
and decommissioning of the reactors and was to pay back the
loans eventually from electricity revenues.
EXPANDING GOVERNMENT SUPPORT
This time, Tepco will remain responsible for paying back 5.4
trillion yen of the interest-free loans from its revenues. The
government will try to recover at least part of another 2.5
trillion yen for decontamination through the eventual sale of
Tepco shares held by the NDLFC. The government will also provide
1.1 trillion yen from tax money to build a facility to store
radiation-contaminated soil near the crippled plant.
Additional decontamination projects are expected to be
funded from the national public works budget, Japanese media
have said. The government has already pledged to provide
financial support to develop cutting-edge technologies needed to
decommission the crippled reactors, a job expected to take
decades and require technologies yet to be developed.
In a draft extra budget for the fiscal year to next March,
the government allocated 47.9 billion yen to handle
radiation-contaminated water at the plant and help with
Tepco faces massive liabilities as it decommissions the
facility, compensates tens of thousands of evacuees and pays for
decontamination of an area nearly the size of the U.S. state of
The firm has cut its costs and raised prices, but its
long-term sustainability remains in doubt. It has yet to win
support to restart its Kashiwazaki Kariwa nuclear plant on
Japan's northwest coast, which could save it about $1 billion a
month in fuel costs.
Tepco's creditors, including Sumitomo Mitsui Financial Group
are set to sign off on 500 billion yen in loans to the
utility next week, when Tepco is also expected to submit a
revised business plan to the government.
Given Tepco's uncertain business prospects, lenders have
been providing loans in exchange for collateral, but Tepco and
the NDLFC have asked lenders to provide new loans without
collateral, possibly from sometime next year, as a way to
facilitate restructuring of the utility.
($1 = 104.2300 Japanese yen)
(Writing by Linda Sieg; Additional reporting by Taiga Uranaka
and Linda Sieg; Editing by Matt Driskill)