Ex-steel chief seen taking over at Tepco

Kyodo

The government is making final arrangements to appoint Fumio Sudo, an ex-president of steel-maker JFE Holdings Inc., as the next chairman of Tokyo Electric Power Co., which is trying to restructure as it struggles with the Fukushima nuclear crisis, sources said Friday.

Sudo, 72, currently an outside director of Tepco, will have the task of helping the utility continue the cleanup effort at Fukushima No. 1 while reviving its battered business.

Tepco and the Nuclear Damage Liability Facilitation Fund filed Friday for government approval of a new 10-year business plan that features more financial support from the government and the restart of reactors at Tepco’s Kashiwazaki-Kariwa nuclear plant in Niigata Prefecture from July.

With the business plan likely to be endorsed by the government in January, current Tepco Chairman Kazuhiko Shimokobe, 66, could step down before the end of his term in June, the sources said.

Sudo is considered a suitable successor because of his extensive experience in corporate management and his contribution to the reconstruction of Tepco as an outside director, they said.

But even if Sudo takes the helm, it remains to be seen if Tepco can get back on track in accordance with the new business plan, given the uncertainty over whether any of the seven Kashiwazaki-Kariwa reactors will be allowed to be restarted.

Due to the apparent difficulty of having a single private company shoulder all of the costs stemming from the nuclear crises, the government plans to provide more financial aid to Tepco. It faces trillions of yen in compensation payments and costs for radiation cleanup outside the crippled plant.

The government’s decision includes raising the ceiling for interest-free loans the utility is allowed to receive from the fund to ¥9 trillion from the present ¥5 trillion. Public funds will also be used to build and manage facilities to store radioactive soil and other waste generated from decontamination activities.

Tepco will create an in-house firm April 1 that will be in charge of the decades-long decommissioning Fukushima No. 1, which it says will ensure swift decision-making and a flexible response.

It also plans to scrap all 10 of its branch offices and assign their employees to reconstruction activities in Fukushima Prefecture.

Tepco and the fund compiled the initial comprehensive business plan last year. It paved the way for a ¥1 trillion capital injection from the fund.

They ended up making a new rehabilitation plan when it became impossible to resume operations at Kashiwazaki-Kariwa in April as initially assumed.

The fund holds 50.1 percent of Tepco’s voting rights as a result of the capital injection, but the new business plan is expected to include a goal to drop the ratio to about one-third in fiscal 2016 to allow the utility more leeway in company management.