TEPCO: Fukushima Clean Up, Compensation May Hit $125 BILLION

TEPCO says Fukushima clean up, compensation may hit $125 bn (AFP, Nov 7, 2012):

Tokyo (AFP) Nov 7, 2012 – The cost of the clean-up and compensation after Japan’s Fukushima nuclear disaster may double to $125 billion, the plant’s operator said Wednesday.Tokyo Electric Power Company (TEPCO) said decontamination of irradiated areas and compensating those whose jobs or home lives have been affected would cost more than the five trillion yen it estimated in April.

“There is a view that we may need the same amount (again) of additional money for the decontamination of low-level radiation areas and costs of temporary facilities for storing waste,” the company said in a statement.

The utility — one of the world’s biggest — received one trillion yen of public cash in April in exchange for granting the government a controlling stake.

The money was intended to prevent the company, which generates and supplies electricity to millions of people, including in and around Tokyo, from going under.

But on Wednesday, as they presented a new management plan, the company said it was looking at a bill of up to 10 trillion yen — around two percent of Japan’s gross domestic product.

The company said it would need more government help to meet the colossal figure.

TEPCO chairman Kazuhiko Shimokobe told reporters his company could become a shell, existing only to sort out the mess left by the tsunami-sparked disaster and dependent on the government for money.

“If we address the swelling costs by doubling the amount of government bond issuance (to 10 trillion), our firm will become an entity only for the purpose of dealing with post-accident issues,” a company statement said.

“It will become difficult for us to raise money from the private sector so we will have to rely on the goverment for the financing of all of our business.”

Shimokobe stressed that he believed that TEPCO should be revived as a fully-fledged private-sector entity, to achieve its mission of compensating those affected by the disaster and providing a stable supply of energy.

TEPCO said Wednesday it would build a new office in Fukushima to try to speed up the processing of compensation claims, whose slow pace has been much criticised, and to provide more than 4,000 jobs in Fukushima prefecture.

It also said it is looking at shaving extra 100 billion yen in costs annually.

Last month the Tokyo-listed TEPCO — the one-time standard bearer of widows’ and orphans’ stocks — said it expects to lose 45 billion yen this year, well down on the 160 billion yen initially forecast.

The devastating tsunami of March 2011 swamped cooling systems at the Fukushima plant, sending reactors into meltdown and spewing radiation over a large area.

The clean-up is expected to take decades, with scientists warning that some settlements may have to be abandoned.

In October TEPCO admitted it had played down known tsunami risks for fear of the political, financial and reputational cost.

The confession was one of the starkest yet by a company that has fallen very far out of favour in Japan and has been criticised for trying to shirk responsibility for the worst nuclear disaster in a generation.