Deal struck over Tepco compensation plan
13 May 2011
The task force discussing the Japanese government's plans for supporting embattled Tokyo Electric Power Company (Tepco) overcame objections from a number of politicians yesterday to draw up a blueprint for the government's assistance to the utility.
Politicians from the ruling Democratic Party of Japan had disrupted the panel's discussions by arguing that the responsibility of the state to provide the utility with financial aid needs to be clarified.
However, the task force eventually gave its approval to the government's compensation scheme, which includes the creation of a new organisation to funnel the payments to the operator of the crippled Fukushima Daiichi nuclear power plant.
The task force's approval meant that the government was able to make its final decision on the plan today.
According to a draft version of the government support plan, Tepco will be required to cover the entire cost of compensating companies and individuals that have been affected by the ongoing problems at the Fukushima plant. The planned new organisation will act to inject public money into the utility and provide it with other support so that it does not collapse under the weight of its debts.
"Acknowledging the social responsibility of promoting nuclear power with plant operators, the government will offer support to Tokyo Electric," the report said.
No final figure has been put on the amount that Tepco will be required to pay in compensation after the worst nuclear accident in Japan's history.
The company, however, will at least be relieved that it has avoided nationalisation, which looked a near-certainty in the weeks after the March 11 earthquake and the massive tsunami that it triggered.
Prime Minister Naoto Kan said that Tepco would be encouraged to pay provisional damages to farmers and fishermen who have lost their livelihoods as a result of the accident as soon as possible.
On 11 May, Tepco stated that it would accept all the conditions imposed on the company as part of the package. That included not setting an upper limit on compensation payments to those affected, a vow to make the maximum efforts to reduce costs and an agreement to cooperate with an independent panel set up to investigate its management.
The organisation being set up to manage the company's compensation arrangements will be made up partly of representatives of other electricity firms. The government has announced that it will allocate the institution a type of bond that carries on interest and can be cashed when required so that further funding can be obtained for Tepco. The organisation will also operate as an insurer and have the responsibility of having plans in place for any future nuclear mishaps.
The government estimates that Tepco will be able to complete its repayments in between 10 and 13 years, after which it will revert to a fully private company with no government involvement. The government plans to submit the bills required for the plan to go into action to the parliament during the ongoing session.
In a statement, Tepco president Masataka Shimizu said, "We expect the bill for this scheme to be enacted at the earliest possible date." He added, "Under this support scheme, while receiving support from the government, we will prepare to compensate those who are suffering in a fair and prompt manner."
By Julian Ryall
for World Nuclear News