In more bad news for taxpayers, the Board of Audit says the cost of the Fukushima nuclear disaster could balloon to ¥218.2 billion, up 58 percent from the previous estimate of ¥126.4 billion.
The board released the latest estimate Friday in light of the government’s adoption of a Cabinet decision in December 2016 to raise the upper limit on financial assistance for Tokyo Electric to ¥13.5 trillion from ¥9 trillion.
The government is borrowing funds from financial institutions for delivery to Tokyo Electric Power Company Holdings Inc. through a public-private body to help it deal with compensation and other costs related to the triple core meltdown in March 2011.
The principal of the funds will be repaid from contributions by Tepco and other power companies to the body, called Nuclear Damage Compensation and Decommissioning Facilitation Corp., and from proceeds from the sale of Tepco shares it owns.
But the interest payments will be shouldered by taxpayers.
According to the latest estimate, if Tepco uses up the ¥13.5 trillion assistance limit, it will take 17 to 34 years for the government to finish repaying the funds, and interest payments will balloon to between ¥131.8 billion and ¥218.2 billion.
The board said if interest rates go up, the amount will increase. Also, depending on Tepco’s business situation, the repayment period could grow and impose an even heavier burden on taxpayers.
The government plans to cover about ¥4 trillion of radiation cleanup costs with proceeds from the Tepco share sale. But the audit board said the plan requires that Tepco shares be sold for at least ¥1,500 apiece, compared with its current market price, which is below ¥500.
Furthermore, the board said additional costs may arise from decontamination work and facilities to be built for temporary storage of the tainted soil generated by the work.
Scrapping the crippled Fukushima No. 1 plant, which is expected to take three to four decades, will also be costly because of the daunting tasks of removing the melted fuel and debris, and managing the hundreds of tons of tainted water it generates each day.
The board suggested Tepco redouble its efforts to improve profitability and corporate value to raise its share price.
The nuclear disaster was caused when the 9.0 magnitude earthquake and ensuing tsunami on March 11, 2011, tipped the aging and poorly designed Fukushima No. 1 nuclear plant into a blackout that disabled its cooling systems.