The expected collapse of U.S. energy giant Enron Corp. will hinder Japan's efforts to liberalize its energy market, Takeo Hiranuma, the minister of economy, trade and industry, said Friday.
"I think Enron's collapse will have an impact on moves toward liberalization of the market," Hiranuma told a news conference.
The Enron group planned to build coal-fired thermal power plants in three western Japan cities as well as a liquefied natural gas-fired thermal power plant in Rokkasho, Aomori Prefecture.
While the Tokyo-based Enron affiliate, e-Power, told the Aomori Prefectural Government on Thursday it is contemplating continuing the power generation project in Rokkasho, Hiranuma acknowledged the coal power projects may be canceled.
But the government will continue to pursue further liberalization of the power market to help reduce Japan's high energy costs and boost the economy, he said.
Enron, which ranked seventh on the Fortune 500 list of U.S. companies in terms of sales last year, slid toward bankruptcy as its rival, Dynegy Inc., on Wednesday called off an agreement struck earlier this month to purchase the financially troubled company.
Enron's troubles began last month when it lost investors' trust by admitting it had overstated profits and hid debts off the books. Its credit ratings have been lowered to junk status, which triggered a plunge in its stock price.