The Japanese government may inject between $13 billion and $19 billion into Tokyo Electric Power Co. (Tepco) in a de facto nationalization of the operator of the crippled Fukushima nuclear power plant, domestic media reported yesterday.
Tepco’s future as an independent firm has been in doubt since an earthquake and tsunami wrecked the plant in March, triggering the world’s worst nuclear crisis in 25 years. The full scale of any Tepco bailout remains unclear, with media carrying differing accounts of what is being considered.
Kyodo news agency said the total bailout could reach 3 trillion yen ($38.5 billion) over four years, with half coming from private borrowings. The Mainichi newspaper said the government planned to inject at least $13 billion and perhaps as much as $27 billion.
Some analysts expressed doubt that the government would take the drastic step of taking control of the giant monopoly, which has political clout despite the damage to its image from its handling of the Fukushima crisis.
“Nationalization would be a surprising development, politically very difficult and with the potential for serious aftershocks,” said Jeffrey Kingston, director of Asian studies at Temple University’s Japan campus. That said, the possibility of the government taking control has proponents in some sections of Japan’s ruling party.
And Tepco President Toshio Nishizawa was mentioned as saying a public fund injection could not be ruled out. “It is better to keep all options, so I don’t deny it,” Kyodo news agency quoted him as saying yesterday.
Tepco has made progress in bringing the Fukushima plant under control and is on track to declare a “cold shutdown” – when water used to cool the reactors is stable below boiling point – before the end of the year. But decommissioning four reactors at the plant is set to cost at least 1.2 trillion yen, a sum that would render Tepco insolvent if drastic measures to shore up its financial base were not taken, media reports said.
Shares in Tepco slid as much as 17 percent before regaining some ground to end down 11 percent at 244 yen.
TOKYO – Reuters