Japan sets up compensation plan for plant operator
Baku, May 13 (AZERTAC). Japan`s government endorsed a plan Friday for a fund to help finance damages stemming from the crisis at a tsunami-crippled nuclear plant, using public money and mandatory contributions from utility companies.
Tokyo Electric Power Co expects a deluge of damage claims stemming from the radiation-leaking Fukushima Dai-ichi nuclear plant on the northeastern coast, in the worst nuclear accident since Chernobyl in 1986. However, the utility is not expected to be able to pay all of them.
The government`s plan, which would spread the burden for the crisis and must be referred to parliament for its expected approval, would create an entity that collects money for the compensation fund from TEPCO and other utilities that operate nuclear power plants. The government will issue the body special bonds that can be cashed when needed to pay claims.
TEPCO earlier this week agreed to a cost-cutting reorganization as part of the government`s compensation plan, which also would set up a commission to monitor the company`s management.
Economy and Trade Minister Banri Kaieda insisted earlier this week that the compensation plan was not a bailout for TEPCO, but rather a way to ensure victims get paid.
"We want to avoid big changes in the electricity bills and contain (the public burden) as much as possible," Kaieda said Friday.
TEPCO President Masataku Shimizu said he expects the plan to go into effect soon.
"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," he said in a statement.
Shinichi Ichikawa, the director of equity research at Credit Suisse in Tokyo, said the plan needed to achieve three goals: maintain a stable electricity supply, ease concerns of financial markets and ensure victims of the nuclear disaster would be compensated.
"It looks like it`s a good solution," he said.
TEPCO has sought a 2 trillion yen ($24.8 billion) loan to tide it through the initial emergency period. It also expects to pay 50 billion yen ($620 million) in initial compensation to nearly 80,000 residents evacuated from around the radiation-leaking plant, which was hit by a giant tsunami after Japan`s massive March 11 earthquake. Overall damages are expected to be much higher.
Also Friday, the operator of a nuclear plant in central Japan began suspending operations at its reactors while it strengthens tsunami protections, under a separate agreement with the government.
The crisis at Fukushima had prompted the government to evaluate all of Japan`s 54 reactors for quake and tsunami vulnerability.
That assessment led to Prime Minister Naoto Kan to request a temporary shutdown at the Hamaoka plant in Shizuoka prefecture amid concerns an earthquake with a magnitude of 8 or higher could strike central Japan sometime within 30 years. The Hamaoka facility sits above a major fault line and has long been considered Japan`s riskiest nuclear power plant.
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