The government launched a panel Thursday to streamline the operations of beleaguered Tokyo Electric Power Co. and evaluate its financial assets as it prepares to pay massive compensation for the crisis at the Fukushima No. 1 nuclear plant.
Tepco has already announced plans to sell assets, including real estate and securities, worth about ¥600 billion, except for those necessary for its power business, and cut operating costs by about ¥500 billion.
The panel will review its plans and possibly its corporate pension situation as well.
Headed by lawyer Kazuhiko Shimokobe, the panel will put a report together in September.
Shimokobe said the panel is unlikely to consider sales related to Tepco’s power generation and distribution businesses for now.
But “it is possible to propose it as a long-term issue,” he told a news conference after the panel’s first meeting.
Prime Minister Naoto Kan told the panel to thoroughly scrutinize Tepco’s operations and assets to reduce the public burden in the form of higher electricity charges or the use of tax revenues to pay redress.
Shimokobe didn’t clarify whether some burden on the public will be unavoidable.
The panel has four other members who are company managers or financial experts — Yoshiyuki Kasai, chairman of Central Japan Railway Co. (JR Tokai); Mami Indo, senior managing director of Daiwa Institute of Research; Toshihiro Matsumura, a professor at the University of Tokyo; and Hirokazu Yoshikawa, CEO of Dowa Holdings Co.
In its next meeting, the panel will hold a session with top Tepco officials about the utility’s management situation.
The Kan Cabinet on Tuesday approved a bill to help Tepco pay the compensation payments, which are expected to reach trillions of yen, by establishing an institution that will provide financial support to the utility. Because of the nuclear crisis, Tepco posted a record net loss of ¥1.24 trillion for fiscal 2010.
IAEA compensation talks
The International Atomic Energy Agency will agree on the need for an international framework for compensation relating to nuclear plant accidents at an upcoming ministerial meeting in Vienna, a final draft statement showed Wednesday.
A paragraph referring to “the need for a global liability regime” following such incidents was added in the draft statement, apparently in light of the Fukushima No. 1 nuclear plant crisis.
According to the draft, the IAEA calls for establishment of a framework whereby a state affected by a nuclear accident in a foreign country can be provided with “appropriate compensation for nuclear damage.”
Participants in the ministerial talks are expected to adopt the draft as their statement as early as Monday, the opening day of the five-day conference in Vienna.
According to the Japan Atomic Industrial Forum, the Vienna Convention on Civil Liability for Nuclear Damage and the Convention on Supplementary Compensation for Nuclear Damage exist as international frameworks to address compensation for damage arising from a nuclear accident.
But the former convention binds only around 30 countries, including those in Eastern and Central Europe, while the latter, binding the U.S. and three other countries, has yet to take effect.