JAPAN | Cabinet OKs Tepco redress bill – Other utilities must ante up to back huge outlays

Posted on June 14, 2011


JAPAN | JAPAN TIMES |  Tuesday, June 14, 2011

The Cabinet approved a bill Tuesday to help Tokyo Electric Power Co. meet its massive compensation payments through the creation of an entity that would provide financial assistance to the utility strugging with the crisis at the Fukushima No. 1 nuclear plant.

Now that it has the administration’s endorsement, the bill is expected to be submitted to the current Diet session. The administration is hoping to ensure swift payment of compensation that may total trillions of yen while maintaining a stable supply of electricity.

But the bill’s fate is uncertain amid the political tug of war that pressured Prime Minister Naoto Kan into announcing he will resign in the near future. Some, including lawmakers of the Democratic Party of Japan, are also concerned that the compensation scheme may lead to a rise in electricity fees.

Under the bill, the new institution would be allocated a type of bond from the government that can be cashed when necessary and could receive loans from financial institutions so it can provide financial assistance to Tepco.

Based on the idea of mutual help, electricity firms that own nuclear plants would contribute to the entity.

Although the bill is intended to prepare for possible future nuclear accidents, its main purpose for now would be to help Tepco meet compensation demands and prevent the utility from being crushed by debt.

The nuclear emergency, triggered by the quake-tsunami disaster on March 11, has forced many residents around the plant in Fukushima Prefecture to evacuate their homes and has devastated the region’s agriculture, livestock and fishing industries.

The DPJ-led administration at one point planned to delay submission of the bill to a later Diet session but has decided to present it during this session so victims can benefit more quickly.

It is also seeking early passage of the bill in the hope of allaying concerns among market players about Tepco’s outlook, which have sent its shares tumbling on stock markets.

The DPJ is hoping to extend the current session beyond the scheduled end of June 22.

Disaster prep rethink

The government sees the need to rethink how it views the threat of future major earthquakes and their potential damage as well as measures local governments and people in harm’s way may need to take, according to a report released Tuesday.

In the 2011 white paper for disaster prevention approved by the Cabinet, the government describes the March 11 quake and tsunami as a “disaster that exceeded the envisioned scenarios in disaster prevention measures taken thus far.”

Summarizing the extent of damage and the central government’s response to it, the annual report notes, “Improving the lives of victims, who are hanging tough under great stress, is the priority issue.”

More than 15,000 people were killed and about 8,000 others remain missing in the quake and tsunami that devastated the northeast.

On future steps, the paper emphasizes the importance of coming up with broad-based measures to tackle the possible situation of three major earthquakes occurring simultaneously in regions ranging from eastern to southwestern Japan.

It says that tsunami observation systems should be reinforced while also taking into consideration unexpectedly vast damage they might cause, adding that evacuation drills should be held to prepare for tsunami and disaster facilities should be upgraded.

The document includes an outline of the nuclear crisis at the Fukushima No. 1 power plant but doesn’t mention that three reactors suffered core meltdowns.

Posted in: JAPAN