If the construction of the Fourth Nuclear Power Plant in New Taipei City’s Gongliao District (貢寮) is scrapped due to widespread opposition, the state-owned Taiwan Power Co (Taipower) will run into operating difficulties and could face bankruptcy, Taipower spokesman Roger Lee (李鴻洲) said.
Lee said that according to accounting regulations, only expenses that bring in revenue can be listed as assets.
If the nearly completed plant is scrapped, it will not be possible for it to run and provide electricity, and the money spent would then be listed as a one-time loss.
Lee said that the total budget for the plant is NT$283.8 billion (US$9.37 billion), NT$270 billion of which has been spent, but has yet to be listed in the company’s financial statements.
This, coupled with the company’s accumulated losses of NT$208.4 billion as of the end of last year, will mean that the total losses will have surpassed the company’s paid-in capital of NT$330 billion.
Under the terms of the Accounting Act (會計法), the company could then face bankruptcy.
Article 211 of the Company Act (公司法) stipulates that “in case the assets of a company are insufficient to set off its liabilities, the board of directors shall apply to the court for pronouncement of bankruptcy.”
He said that the scrapping of the plant would have a major impact on the company’s financial situation and trigger a domino effect.
Not only will the company have its credit rating adjusted downward, it will face tightened liquidity by the banks, he said.
If the company has a cash flow problem, contractors and suppliers could suspend their work and the company could also have difficulty purchasing fuel needed to operate its existing power plants, which could affect normal electricity supplies, he said.
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