Fukushima costs may soar to $125bn

2012-11-07 15:00
Members of the media wear protective suits at Fukushima. (File, AFP)

Members of the media wear protective suits at Fukushima. (File, AFP)

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Tokyo - The cost of the clean-up and compensation after Japan's Fukushima nuclear power plant disaster may double to $125bn, the plant's operator warned on Wednesday.

Tokyo Electric Power Company (Tepco) said decontamination of irradiated areas and compensating those whose jobs or home lives have been affected would cost much 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 on top of previous grants and loans. It 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 it presented a new management plan, Tepco said it was looking at a bill of up to 10 trillion yen ($125bn) - equal to around 2% of Japan's gross domestic product or 11% of the country's annual budget.

Needs help


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

Tepco also said it had already set aside one trillion yen of its own capital to decommission the plant's broken reactors, which is in addition to the clean-up and compensation bill, but it was possible this may also rise.

"We are awaiting the government's instructions and are aware the total cost, including of removing fuel debris and final disposal, could be considerably larger than we have previously allowed for," it said in a statement.

Company chairman Kazuhiko Shimokobe told reporters Tepco 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 yen], 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 government for the financing of all of our business."

Revived

Shimokobe stressed that he believed 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 on Wednesday it would build a new office in Fukushima to try to speed up 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 100bn yen ($1.24bn) in costs annually.

Last month the Tokyo-listed Tepco - the one-time standard bearer of widows' and orphans' stocks - said it expects to lose 45bn yen ($560m) this year, a figure well down on the 160bn yen ($1.9bn) initially forecast.

Decades of clean-up

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.

The massive natural disaster claimed nearly 19 000 lives when a huge undersea quake generated a massive tsunami that wreaked havoc along a stretch of coast in northeast Japan.

But the emergency at Fukushima is not officially recorded as having directly caused any deaths, although it has made tens of thousands of people homeless and rendered swathes of Japan's agricultural belt unfarmable.

Read more on:    japan  |  fukushima disaster  |  nuclear
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