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Tokyo (AFP) May 9, 2012
Japan's government will take a controlling stake in the operator of the Fukushima nuclear plant under a plan ministers approved Wednesday, effectively nationalising one of the world's largest utilities.
Tokyo will inject one trillion yen ($12 billion) as part of a 10-year restructuring aimed at preventing the vast regional power monopoly from going bankrupt.
Tokyo Electric Power (TEPCO), which is facing a huge clean-up bill for the disaster at Fukushima, along with colossal compensation claims from those affected, will come under "temporary state control", the document said.
Announcing the government's approval, Industry Minister Yukio Edano said TEPCO must rid itself of a secretive and complacent corporate culture, and regain public confidence.
"The plan outlines the foundation for reform toward building a new TEPCO," he told a press conference.
"Under the new management, I urge that the firm builds a fresh culture, listening to voices of those who have been harmed (by the nuclear crisis), to customers, to society and starts actively releasing information," he said.
TEPCO submitted its turnaround plan to the government earlier this month through the state-backed Nuclear Damage Liability Facilitation Fund (NDLFF), and ministers meeting on Wednesday gave it the green light.
As the sole provider of electricity to Tokyo and a vast surrounding region in eastern Japan, TEPCO is responsible for maintaining a stable power supply to its millions of customers.
But it is staring at an enormous bill with decommissioning of the four crippled reactors and the clean up of the surrounding area expected to take decades, alongside ballooning compensation claims.
TEPCO projected losses of 708.0 billion yen for the financial year to March 2012, and 201.4 billion yen for the current 12-month period.
The NDLFF -- which is directly answerable to the government -- will take more than 50 percent of voting rights in exchange for one trillion yen, with an option to take more than two-thirds control, according to the proposal.
"By taking shares (worth one trillion yen), the fund shall take more than half of the voting rights... in order to ensure achievement of three goals of 'compensation, decommissioning, and stable (electricity) supply'," it said.
The plan called the move "temporary public control", also spelling out an option for the fund to increase its stake to beyond two-thirds.
With public distrust in nuclear energy running high, Japan's entire pool of atomic reactors are offline, leaving TEPCO and fellow utilities with no choice but to fire up expensive fossil-fuel-powered plants.
The turnaround plan will also see customers directly hit, with a projected 10 percent rise in domestic bills.
TEPCO will trim more than 3.3 trillion yen in costs in a decade, and hopes to restart a nuclear plant in Niigata prefecture.
Under the restructuring most of the current TEPCO management will leave the firm, with lawyer Kazuhiko Shimokobe, who heads a state-backed bailout fund, slated to become the next chairman.
TEPCO also has nominated its managing director Naomi Hirose, in charge of compensation issues related to the nuclear disaster, to replace incumbent president Toshio Nishizawa.
The government's approval has also prompted TEPCO's creditor banks to extend one trillion yen in fresh loans, media reports said.
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