It will take up to 31 years for the government to recover the ¥5 trillion in aid it may provide, just through this fiscal year, to Tokyo Electric Power Co. for compensation related to the Fukushima No. 1 nuclear plant disaster that started in 2011, a government agency said Wednesday.
Relevant interest payments to financial institutions through fiscal 2044 will cost the government an estimated ¥79.4 billion and will be effectively shouldered by taxpayers, the Board of Audit of Japan said.
The board’s findings marked the first time an estimate has been released on how long it will take for the government to recover the money provided through a state-backed bailout fund as well as the financial burden taxpayers will face in the process.
The auditing was conducted at the request of the Diet in August 2012, after cash-strapped Tepco fell under effective state control after receiving a ¥1 trillion capital injection.
Apart from the ¥1 trillion in public funds, Tepco has received assistance from the Nuclear Damage Liability Facilitation Fund to ensure swift compensation payments to people affected by the world’s worst nuclear crisis since the 1986 Chernobyl disaster.
The fund entails allocated government bonds that can be redeemed when necessary for assistance to Tepco, with the ceiling set at ¥5 trillion. The government borrows money from financial institutions to redeem the bonds and pays the relevant interest.
The fund has so far provided Tepco with about ¥3.05 trillion, including ¥2.91 trillion already paid to people affected by the disaster.
But compensation payments are still ongoing and the assistance Tepco will need, including costs to clean areas contaminated by radioactive fallout from the Fukushima No. 1 plant, may eventually exceed the fund’s ceiling.
Under the current scheme, the fund recovers the money provided to Tepco through annual contributions from 11 Japanese electricity firms that own nuclear plants, including Tepco.
Tepco is also required to pay what is called a “special contribution” to the fund once its financial conditions have improved.
The Board of Audit conducted its report on the assumption that ¥5 trillion will be provided to Tepco by the end of the current fiscal year through March.
If Tepco pays no more than the annual contribution, the Board of Audit’s estimate showed that the government will take 31 years to recover the aid.
If Tepco pays the annual contribution and the special contribution, however, the period will be shortened to 14 years, with interest payments totaling ¥37.4 billion.
The estimate also showed that Tepco will face ¥1.09 trillion in additional costs for failing to restart its idled nuclear reactors at the Kashiwazaki-Kariwa plant in Niigata Prefecture in fiscal 2015 and fiscal 2016.
The additional costs represent the consumption of fossil fuel required to make up for the loss of nuclear power generation.