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Saturday, May 14, 2011
Tepco, state strike compensation deal
In return for taxpayer money, utility has to accept drastic restructuring
By MASAMI ITO
The government approved Friday an overall framework for using taxpayer money to help Tokyo Electric Power Co. pay an enormous sum in compensation to victims of the crisis at the Fukushima No. 1 nuclear plant.
Tepco is facing an estimated several trillion yen in damages and has sought the government's help to ensure that all payments will be made.
"Recognizing that the government has a social responsibility for having promoted nuclear power policy along with the nuclear power operators, the government will support Tepco . . . while aiming to minimize the burden on the public," the government said in a written statement Friday.
Under the framework, a new institution will be established to facilitate Tepco's payments and place it under government supervision to monitor the company's streamlining efforts "for a certain period of time."
Power utilities including Tepco will be obliged to help fund the new institution, and the government will also issue special zero-interest-rate bonds that can be cashed when necessary. The institution will also act as an insurer against future nuclear-related accidents.
"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," said Tepco President Masataka Shimizu in a written statement in English on Friday.
But the government's helping hand came with conditions to which Tepco agreed, including setting no ceiling on compensation, making maximum efforts to streamline and cut costs, and agreeing to a third-party examination of the utility's management and assets.
"This is not aimed at saving Tepco," said Banri Kaieda, minister of trade and industry, stressing that the aim is to ensure that compensation is paid to the victims swiftly.
Public money should not be injected into Tepco before its creditors make more efforts, Chief Cabinet Secretary Yukio Edano said Friday.
Edano said the lenders need to cooperate and waive some of the debts owed by the operator of the radiation-spewing plant or the use of taxpayer money "can hardly win public understanding."
Earlier this week, Shimizu officially asked for the government's help in compensating the victims, citing lack of capital. The company promised to do whatever it can to cut costs, including the full return of executive remuneration for Tepco leaders, including Shimizu, and selling off assets.
Compensation must be made not only to the local residents and governments, but also to the regional agricultural and fisheries industries that have been torn apart by the nuclear crisis.
Most recently, Prime Minister Naoto Kan gave instructions Thursday to the governor of Fukushima to destroy farm animals within 20 km of the Fukushima plant. Tepco will have to compensate the livestock owners as well, officials said.
INFORMATION FROM KYODO ADDED