Japan Proposes Plan for TEPCO to Pay Fukushima Compensation
The bill would be able to handle claims up to $125 billion
Japan's cabinet has proposed a plan to help the Tokyo Electric Power Company compensate victims affected by the fallout from the radiation-stricken Fukushima plant. The Wall Street Journal and The Guardian have the most comprehensive English language reports on the bill, which still must be approved by parliament. The details of the plan, per The Journal, are as follows:
"[A] special body will be created to handle the claims, estimated at anywhere up to ¥10 trillion, or about $125 billion. It will have the authority to issue government-backed bonds and will repay the funds using future profits from Tepco. Other utilities and companies involved in nuclear-power generation will also be assessed."
Since the March 11 tsunami and earthquake, TEPCO has sustained $15 billion in losses and seen its share price plummet over 90 percent. Last month, when outgoing utility president Masataka Shimizu resigned, TEPCO issued a release stating that its losses raise "substantial questions about our ability to continue" operating as usual. The utility had previously provided, in an initial effort, $12,000 each to 50,000 families forced to evacuate after radiation scares in areas near the Fukushima plant.
But the plan announced Tuesday appears, for the moment, to be more about assisting TEPCO with what's anticipated to be a wave of claims than providing clarity on what victims of the nuclear disaster stand to receive. As The Journal noted, it "provide[s] a way for the utility to avoid bankruptcy." And to that end, the plan appears to be a success: "Tepco shares soared on the news, climbing the 25% limit allowed for a single day, to close at ¥249 (about $3.11) in a strong rebound from a recent descent to an all-time low of ¥148 hit Friday." Japan's Trade Minister, Banri Kaieda (pictured above), has pressed for the bill to be submitted to parliament "as soon as possible," according to Reuters.