TOKYO Japan's trade minister approved nearly $9 billion in additional support for Tokyo Electric Power Co to help compensate victims of the Fukushima nuclear crisis on Monday, but said the government would not go ahead with a plan to inject tax money into utility unless it got adequate management say.
The utility's Fukushima plant was wrecked by a quake and tsunami last March, triggering the world's worst nuclear crisis in 25 years and swamping the firm with huge cleanup, compensation and decommissioning costs as well as a big fossil fuel bill.
Aside from the added 690 billion yen ($8.9 billion) in compensation support from a state-backed fund, the government has been planning to inject about 1 trillion yen in taxpayers' money into the utility, also known as Tepco, in what would be one of the world's biggest bailouts outside the banking sector.
But Trade Minister Yukio Edano, who also holds the energy portfolio, told reporters the public fund injection would not go ahead unless the government got adequate voting rights.
"If Tepco submits a business plan seeking a capital injection (from the government) without sufficient voting rights relative to the size of injection, I have absolutely no plans to approve it as long as I am in this position ," Edano told Tepco President Toshio Nishizawa in front of reporters.
Tepco has already bowed to the inevitable and agreed to accept the 1 trillion yen in public funds and appears resigned to the government taking more than a one-third share, which would give it veto rights at shareholders meetings.
But the utility has been resisting the idea of the government taking a big say in its management.
The government is walking a tightrope between the need to keep Tepco afloat so it can pay compensation to disaster victims and supply power, and a desire to avoid looking lax on the politically powerful utility, which many voters feel mishandled the nuclear crisis and perceive as an arrogant monopoly.
The Fukushima crisis has prompted Japan to scrap a plan to boost atomic power to more than half of electricity demand by 2030 from about 30 percent before the accident, and is working to craft a new energy policy by summer.
Edano has urged Tepco to explain a decision to raise rates for companies by an average 17 percent from April, a painful hike for firms already struggling with a strong yen.
"Tepco on the one hand is a very well-established private sector company and ... from a 'zaikai' (business circle) point of view is very important. But with everything that has happened, the public is very skeptical of Tepco's intentions, so the government has to tread very carefully," said Koichi Nakano, a political science professor at Sophia University.
The firm, which will announce its financial results for the nine months ended in December later in the day, expects to post a net loss of 580 billion yen in the year to March 31, Jiji news agency said.
The state-backed Nuclear Damage Liability Facilitation Fund, which including the latest tranche is providing 1.6 trillion yen to help Tepco compensate victims of the Fukushima disaster, is working with the utility to draft a business reconstruction plan to be unveiled in March.
The Fund is backed by public money plus contributions from nuclear power operators, and Tepco is required to pay back the support in coming years.
(Additional reporting by Kentaro Hamada and Mayumi Negishi; Writing by Linda Sieg; Editing by Edwina Gibbs)