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Japan's TEPCO submits compensation aid request to govt

10 may 2011, 17:14
The president of TEPCO on Tuesday submitted a request for Japanese government aid in compensating those affected by its stricken nuclear power plant, as the utility said it faced funding problems, AFP reports.

Presenting the request to trade and industry minister Banri Kaieda, Masataka Shimizu told reporters that the company accepts it has liability for damages caused by the world's worst nuclear accident for 25 years.

"We face an extremely severe situation regarding fund-raising such as loans from financial institutions, not to mention bond issuance," Tokyo Electric Power (TEPCO) said in the submitted document.

The company said it needed state help to continue operating and avoid a scenario that threatened "fair and prompt compensation to affected people and causing fears over stable supply of electricity."

The cooling systems of the Fukushima Daiichi Plant were crippled by the March 11 tsunami following Japan's biggest recorded earthquake, causing reactors to overheat, triggering explosions and the release of radioactive materials.

The worst nuclear disaster since Chernobyl in 1986 has forced the evacuation of tens of thousands of people from their houses, businesses and farms in a 20-kilometre (12-mile) radius around the plant.

The Japanese government has said that TEPCO must undertake greater restructuring in order to win government support.

TEPCO said Shimizu and seven other representative directors would return their renumeration "for the time being" and the company would look at selling securities holdings and real estate to create "as much funds as possible".

This would also include "streamlining businesses", it added.

TEPCO had already announced salary cuts of 50 percent for board members, but some government officials criticised the move as too lenient considering their average salary was 37 million yen ($461,000) in the year to March 2010.

The beleaguered firm said it was also struggling with the costs of extra power generation, including an additional one trillion yen ($12 billion) for fossil fuel, with its Fukushima Daiichi plant and other facilities offline following the March 11 disasters.

One of the world's biggest power companies, TEPCO supplies the Kanto region including Tokyo at the economic heart of Japan and boasts 44.6 million customers -- more than one third of the population.

"Amid increasing dependency on thermal power generation, we need a considerable amount of funds as seen in nearly one trillion yen of additional costs for surging fossil fuel (prices)."

The government has said that it will ensure there is funding for compensation payments and is studying various possible approaches.

The Yomiuri Shimbun on Tuesday reported that the government is considering taking an equity stake in TEPCO.

The devastating March 11 earthquake and tsunami crippled the Fukushima Daiichi plant, with authorities and TEPCO still battling to bring the facility to safety more than eight weeks later.

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