TOKYO – Japan plans to set up a government-backed insurance fund to put money into Tokyo Electric Power (Tepco) and pay compensation stemming from the disaster at its Fukushima Daiichi nuclear plant, the Nikkeinewspaper said.
The plan aims to save Tepco from collapse, and would have the state initially shoulder the compensation costs, which it would then repay over several years by way of special dividends.
Tepco has yet to determine how much it will have to pay residents and businesses near the Fukushima plant, who were forced to evacuate after the March 11th earthquake and tsunami that caused deadly radiation leaks.
The company will make an initial compensation payment of 50 billion yen, its president Masataka Shimizu said yesterday at a news conference. He added that he did not know how much the final bill would be. Mr Shimizu said the power company would be aggressive in cutting costs.
“We want to streamline operations with no exceptions in what we consider,” he said during the conference, where he apologised.
“We are obviously thinking about pay cuts for our board and managers,” he added.
Japanese media later reported that Tepco would sell $1.2 billion worth of real estate to help pay victims. Tepco said it was not discussing property sales for now but needed to consider it.
Payments could be set at about one million yen per household, with all of those living within a 30km radius of the plant eligible, chief cabinet secretary Yukio Edano said yesterday.
More than 200,000 people were living in the 30km Fukushima exclusion zone before the disaster. Tepco estimates about 50,000 households are eligible for the initial payments.
Mr Edano said the government wanted to start paying some of the victims before the “Golden Week” national holidays that start on Friday, April 29th.
Under the draft plan, the government would set up the fund using loans from private banks and surcharges on other utilities that operate nuclear plants.
The fund would handle the initial compensation payments, which Tepco would repay over several years by issuing new preferred shares to the fund that will pay dividends, the Nikkei said.
The head of the Federation of Electric Power Companies of Japan said yesterday he was not informed of such an alternative to the existing legal framework for nuclear disaster compensation, in which other nuclear generators do not have to get involved.
“If and when we receive details [of a scheme] and its purposes, we’d like to examine and make a judgment,” Makoto Yagi said.
– (Reuters)