The president of Tokyo Electric Power Co (TEPCO) yesterday submitted a request for Japanese government aid in compensating those affected by its stricken nuclear power plant, as the utility said it faced funding problems.
Presenting the request to Japanese trade and industry minister Banri Kaieda, Masataka Shimizu told reporters that TEPCO would undertake bold restructuring measures to help pay for damages caused by the world’s worst nuclear accident in 25 years.
TEPCO said in the submitted document that the company faced “an extremely severe situation regarding fundraising such as loans from financial institutions, not to mention bond issuance.”
The company said it needed state help to continue operating and avoid a scenario that threatened “fair and prompt compensation to affected people and causing fears over stable supply of electricity.”
Some analysts have forecast that the utility faces compensation claims totaling about ￥10 trillion (US$125 billion). The government is expected to decide on an assistance package for TEPCO later this week. The cooling systems of the Fukushima Dai-ichi nuclear power plant were crippled by the March 11 tsunami following Japan’s biggest recorded earthquake, causing reactors to overheat, triggering explosions and the release of radioactive materials.
The worst nuclear disaster since Chernobyl in 1986 has forced the evacuation of tens of thousands of people from their houses, businesses and farms in a 20km radius around the plant. The Japanese government has said TEPCO must undertake greater restructuring in order to win its support.
TEPCO said Shimizu and seven other representative directors would return their remuneration “for the time being” and the company would look at selling securities holdings and real estate to create “as much funds as possible.”
This would also include “streamlining businesses,” the document added. TEPCO had already announced salary cuts of 50 percent for board members, but some government officials criticized the move as too lenient considering their average salary was ￥37 million in the year to March last year.
The beleaguered firm said it was also struggling with the costs of extra power generation, including an additional ￥1 trillion for fossil fuel, with its Fukushima Dai-ichi plant and other facilities offline following the disasters.
One of the world’s biggest power companies, TEPCO supplies the Kanto region, including Tokyo at the economic heart of Japan, and has 44.6 million customers — more than one-third of the population.
“Amid increasing dependency on thermal power generation, we need a considerable amount of funds as seen in nearly ￥1 trillion of additional costs for surging fossil fuel [prices]” for the year to March next year, it said.
The government has said that it will ensure there is funding for compensation payments and is studying various possible approaches.
The Yomiuri Shimbun yesterday reported that the government is considering taking an equity stake in TEPCO. The devastating earthquake and tsunami crippled the Fukushima Dai-ichi plant, with authorities and TEPCO still battling to bring the facility to safety more than eight weeks later.
About 100 evacuees from a village near the Fukushima plant briefly returned home yesterday in radiation suits, masks and goggles to pick up personal belongings.