14/05 Govt OK's nuclear crisis redress plan / 9 utilities may aid TEPCO's compensation

The Yomiuri Shimbun

The government on Friday officially approved a framework for compensating people affected by the ongoing nuclear crisis at Tokyo Electric Power Co.'s Fukushima No. 1 nuclear power plant, in a scheme that would require nine other utilities to make contributions that could be used for compensation.

The framework would place TEPCO under effective state control.

Under the framework, TEPCO would pay compensation to people affected by the disaster at the Fukushima plant under the support of a new body to be established by the government--tentatively called the "nuclear power plant compensation institution." TEPCO would repay the envisaged institution out of its yearly profits.

While the framework does not set an upper limit on compensation payments to be made by the utility, it stipulates the institution would keep the firm solvent until it finishes making payments.

The decision to adopt the compensation framework was made at a meeting of concerned Cabinet ministers.

The framework also states that power companies that operate nuclear plants would be obliged to contribute to the new institution. Eight other power companies--excluding Okinawa Electric Power Co., which does not have a nuclear plant--and Japan Atomic Power Co. would also be required to contribute.

Taking into account public backlash over an expected rise in electricity bills, the basic position for assisting TEPCO was changed from "minimizing financial burdens" in an earlier draft to "minimizing the people's burden."

In addition, the government would monitor TEPCO's streamlining efforts, such as selling assets and cutting payroll. The government also would allocate no-interest bonds to the institution, which could be cashed if necessary.

"This is not a bailout for TEPCO, it is so we can properly pay compensation," Economy, Trade and Industry Minister Banri Kaieda said. He said the government would seek quick passage of related bills through the Diet, saying they would be submitted "as soon as possible."

Meanwhile, TEPCO President Masataka Shimizu said, "While we will receive government support under the framework, we will continue to prepare to make fair and swift payments to victims."

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Edano hopes for debt waiver

Chief Cabinet Secretary Yukio Edano on Friday expressed his hope that financial institutions would partially waive loans extended to TEPCO before the March 11 earthquake.

During the morning press conference, Edano said it would be impossible to get the public on board regarding an injection of public funds to TEPCO if creditors offer no debt forgiveness.

Edano answered a question made in relation to the framework for compensation for damage inflicted by the Fukushima No. 1 nuclear power plant accident, which was officially announced by the government earlier in the day. At the same time Edano indicated that a partial waiving of debts by the institutions is an important prerequisite for injection of public funds into TEPCO.

"It is a problem of TEPCO asking the financial institutions for cooperation to give up some of the loans and whether the institutions would cooperate or not. Based on the results of such efforts, we will judge whether the plan [the government has] decided on at this time will be carried out or if a different plan needs to be explored," Edano said.

(May. 14, 2011)