Tepco wants government help for compensation payments
- 10 May 2011
- From the section Business
The operator of Japan's crippled Fukushima Daiichi nuclear plant has asked the government for help compensating victims of the crisis.
Tokyo Electric Power Company (Tepco) said it had presented a formal written request to the Economy Minister, Banri Kaieda.
The plant was heavily damaged in the 11 March earthquake and tsunami.
Total compensation claims are not yet known, but analysts say they may be more than $100bn (£61bn).
More than 80,000 local residents living within a 20km (12 mile) radius of the plant have been evacuated from their homes.
Agriculture and businesses have been hit and there is no timescale yet for allowing local residents to return.
On Tuesday, one group of about 100 evacuees was allowed back in the no-go zone around the plant.
Wearing protective suits and masks, the residents of Kawauchi village went home for two hours to gather belongings before returning to their temporary shelters.
Workers are struggling to stabilise the plant. Cooling systems were knocked out, causing fuel rods to overheat. There were subsequently explosions at four reactors operating at the time of the earthquake.
Engineers are pumping water into the reactors to cool them as they work to restore the damaged cooling systems.
Over the past few weeks, Tepco, its creditors and the government have been trying to create a plan that would allow the power utility to compensate victims of the nuclear crisis.
Tepco - Japan's biggest power utility - also faces billions of dollars in extra fuel costs to make up for reactor closures at Fukushima.
In a statement, the company said it faced "an extremely severe situation" in terms of raising funds and that it needed state help so that "fair and prompt" compensation could be paid.
The company has promised to restructure and executive salaries have already been reduced.
On Tuesday, Japan's Finance Minister Yoshihiko Noda hinted that the government would give Tepco some form of support.
"Basically, Tepco is primarily responsible for compensation but the government will ensure that those who are affected can be compensated," the minister said after a cabinet meeting.
He added that there were different ways the state could help Tepco and ensure support was provided, however he did not explain what those methods might be.
Tepco serves an area that accounts for 33% of Japan's economy.
"They can't be allowed to face bankruptcy," said Penn Bowers, an analyst at CLSA in Tokyo. "I think everyone understands they can't be allowed to fail."
Shares in Tepco have plunged since the earthquake and subsequent tsunami.
Japanese media has reported that Tepco may have to raise electricity prices in order to help pay for payments.
Tepco, meanwhile, has said that it may take up to nine months to achieve a cold shut-down at the nuclear plant.