Tokyo Electric Power (Tepco), the company at the centre of Japan’s worst-ever nuclear accident, has been saved from collapse after the government in effect nationalised the firm by agreeing to inject 1 trillion yen ($12.5bn) in fresh capital.
Japan’s biggest utility has received at least 3.5tn yen in state support since three reactors at the Fukushima Daiichi nuclear power plant went into meltdown after being hit by a powerful tsunami on 11 March last year.
The trade and industry minister, Yukio Edano, said the capital injection was needed to ensure the utility company could continue to supply electricity to 45 million people, including residents of Tokyo.
“Without the state funds, [Tepco] cannot provide a stable supply of electricity and pay for compensation and decommissioning costs,” Edano said after approving what amounts to a state takeover of the firm.
The total cost of the disaster, which last weekend led to the closure of the country’s last working nuclear reactor, is estimated at $100bn.
Tepco faces compensation claims totalling 5tn yen from the tens of thousands of people who have been driven from their homes by radiation leaks.
The task of decontaminating the area affected by radiation and decommissioning the plant is expected to take decades.
Under the 10-year restructuring plan, the government will acquire more than half of Tepco’s shares, with the option of increasing its stake to more than two-thirds if the company fails to reach its restructuring targets.
In return for the taxpayer bailout, Tepco plans to reduce costs by 3.7tn yen over the next 10 years and cut a 10th of its workforce. It will also need government approval to increase household electricity bills and restart nuclear reactors that pass stress tests introduced in the wake of the disaster.
The plan has already prompted personnel changes amid criticism of Tepco’s handling of the disaster and evidence that it played down the risk posed by earthquakes and tsunamis.
The current chairman, Tsunehisa Katsumata, will be replaced by Kazuhiko Shimokobe, a lawyer selected by the bailout fund. Naomi Hirose, a Tepco managing director who is overseeing the firm’s response to the accident, has been promoted to president.
“Under the new management, I urge the firm to build a new corporate culture, listen to the victims, to customers and to society, and start actively releasing information,” Edano said.
[Japanese nuclear plant at night via Silverkblack / Shutterstock]