Gov’t plans to supervise TEPCO management for over 10 yrs
May 12, 2011
The government is planning to supervise for more than 10 years the management of Tokyo Electric Power Co., which has been struggling in the face of compensation claims following the crisis at its Fukushima Daiichi nuclear plant, sources close to the matter said Wednesday.
The government is closer to completing a rescue plan for the utility company, known as TEPCO, which will require it to secure around 1 trillion yen ($12.3 billion) during the first year of its envisaged revamp process by implementing measures such as selling assets and reducing its workforce.
Prime Minister Naoto Kan and his Cabinet ministers are expected to endorse the plan at a meeting as early as on Thursday.
On Wednesday, the government agreed during a meeting of Cabinet ministers to move ahead with setting up a state-backed institution to help TEPCO pay massive compensation to those affected by Japan's worst nuclear crisis, a government official suggested.
Nine of the country's electricity firms will likely hold a stake in the institution, which would play a role in injecting public money into embattled TEPCO, the sources said. The government will also issue a type of government bond to the institution that will carry no interest and can be cashed when necessary so it can secure funding to support TEPCO.
Tokyo Electric decided earlier in the day to make maximum cost-cutting efforts and be open to government surveillance over its management, accepting all the conditions that the government presented to the utility which asked for state support Tuesday.
''We will hold a meeting that involves the prime minister by the end of this week and make a decision (about the compensation scheme),'' Kan Suzuki, senior vice minister of the science ministry, told reporters following Wednesday's gathering of ministers, which did not include the prime minister.
He said there were no differences of opinion among the ministers who gathered to discuss the economic damage from the disaster and that they had agreed to ''steadily work'' to create the compensation scheme. But he did not elaborate.
Under the six conditions presented by the government, TEPCO would not set an upper limit for compensation payments in advance, would make maximum cost-cutting efforts and accept an investigation into its management by a third-party panel set up by the government.
The company would also work hard to bring an end to the ongoing nuclear crisis and seek cooperation from all stakeholders, including financial institutions, but it would be allowed to secure necessary funds to ensure stably electricity supply.
The conditions were proposed Tuesday after Tokyo Electric President Masataka Shimizu asked for help earlier in the day in paying compensation over the disaster, which is expected to reach several trillion yen.
''We approve the issues we have been asked to confirm (by the government),'' Shimizu said in response on Wednesday in a document addressed to industry minister Banri Kaieda, who is also serving as a minister in charge of dealing with the economic impact of the disaster.
Crippled by the massive March 11 earthquake and tsunami, the Fukushima Daiichi plant has been leaking radioactive substances, forcing residents around it to evacuate from their homes and damaging the agriculture, livestock and fishery industries in the region amid fears of radioactive contamination.
Cabinet ministers have recently held discussions on the compensation scheme, which would enable the government to inject public funds into TEPCO to prevent the company from collapsing due to the massive compensation it has to shoulder, according to sources close to the matter.
The envisioned new body is also expected to function as an insurance entity to prepare for possible future nuclear accidents.
A top TEPCO official said that the company will release its earnings results for fiscal 2010 on May 20.
The company has delayed its earnings announcement from April 28 as initially planned, saying it needs time to incorporate the impact of the nuclear crisis.
Meanwhile, a general shareholders meeting is expected to be held in late June.
(Distributed by Kyodo News on May 12, 2011)
The government is closer to completing a rescue plan for the utility company, known as TEPCO, which will require it to secure around 1 trillion yen ($12.3 billion) during the first year of its envisaged revamp process by implementing measures such as selling assets and reducing its workforce.
Prime Minister Naoto Kan and his Cabinet ministers are expected to endorse the plan at a meeting as early as on Thursday.
On Wednesday, the government agreed during a meeting of Cabinet ministers to move ahead with setting up a state-backed institution to help TEPCO pay massive compensation to those affected by Japan's worst nuclear crisis, a government official suggested.
Nine of the country's electricity firms will likely hold a stake in the institution, which would play a role in injecting public money into embattled TEPCO, the sources said. The government will also issue a type of government bond to the institution that will carry no interest and can be cashed when necessary so it can secure funding to support TEPCO.
Tokyo Electric decided earlier in the day to make maximum cost-cutting efforts and be open to government surveillance over its management, accepting all the conditions that the government presented to the utility which asked for state support Tuesday.
''We will hold a meeting that involves the prime minister by the end of this week and make a decision (about the compensation scheme),'' Kan Suzuki, senior vice minister of the science ministry, told reporters following Wednesday's gathering of ministers, which did not include the prime minister.
He said there were no differences of opinion among the ministers who gathered to discuss the economic damage from the disaster and that they had agreed to ''steadily work'' to create the compensation scheme. But he did not elaborate.
Under the six conditions presented by the government, TEPCO would not set an upper limit for compensation payments in advance, would make maximum cost-cutting efforts and accept an investigation into its management by a third-party panel set up by the government.
The company would also work hard to bring an end to the ongoing nuclear crisis and seek cooperation from all stakeholders, including financial institutions, but it would be allowed to secure necessary funds to ensure stably electricity supply.
The conditions were proposed Tuesday after Tokyo Electric President Masataka Shimizu asked for help earlier in the day in paying compensation over the disaster, which is expected to reach several trillion yen.
''We approve the issues we have been asked to confirm (by the government),'' Shimizu said in response on Wednesday in a document addressed to industry minister Banri Kaieda, who is also serving as a minister in charge of dealing with the economic impact of the disaster.
Crippled by the massive March 11 earthquake and tsunami, the Fukushima Daiichi plant has been leaking radioactive substances, forcing residents around it to evacuate from their homes and damaging the agriculture, livestock and fishery industries in the region amid fears of radioactive contamination.
Cabinet ministers have recently held discussions on the compensation scheme, which would enable the government to inject public funds into TEPCO to prevent the company from collapsing due to the massive compensation it has to shoulder, according to sources close to the matter.
The envisioned new body is also expected to function as an insurance entity to prepare for possible future nuclear accidents.
A top TEPCO official said that the company will release its earnings results for fiscal 2010 on May 20.
The company has delayed its earnings announcement from April 28 as initially planned, saying it needs time to incorporate the impact of the nuclear crisis.
Meanwhile, a general shareholders meeting is expected to be held in late June.
(Distributed by Kyodo News on May 12, 2011)
