Tokyo Electric Power Co. is expected to ask the government for an additional 700 billion to 900 billion yen ($8.4 billion to $10.8 billion) to pay compensation to victims of the Fukushima nuclear accident, bringing the total to more than 2 trillion yen.
Tokyo Electric Power Co. is expected to ask the government for an additional 700 billion to 900 billion yen ($8.4 billion to $10.8 billion) to pay compensation to victims of the Fukushima nuclear accident, bringing the total to more than 2 trillion yen.
The additional financial assistance is needed to meet new guidelines that the Dispute Reconciliation Committee for Nuclear Damage Compensation compiled on March 16.
TEPCO and the Nuclear Damage Liability Facilitation Fund are discussing details of the assistance, sources said. The amount will be finalized by the end of this week, at the earliest.
The government previously decided to provide 1.58 trillion yen to TEPCO for compensation, mainly for negative publicity to farmers and mental damage to evacuees.
Under accounting rules, TEPCO is required to estimate future compensation and book it as losses on a quarterly basis.
If TEPCO reports 700 billion to 900 billion yen in losses for additional compensation for the three months through March, it will be deemed as having a negative net worth, meaning that the company cannot pay off its liabilities even if it sells all its assets.
Under new compensation guidelines, 6 million yen should be given in a lump sum to each person who is not allowed to return to his or her home, located in a “difficult-to-return” zone to be newly created, for at least five years.
These people should also be paid the full value of their homes and land as calculated before the accident at the Fukushima No. 1 nuclear power plant, according to the guidelines.
TEPCO has estimated additional compensation on the assumption that 20,000 to 30,000 evacuees will be classified as residents of the difficult-to-return zone, with annual radiation doses above 50 millisieverts.
The government plans to reorganize current evacuation areas, home to 160,000 people, into three zones, including the difficult-to-return zone. Boundaries have yet to be determined.
The government will use a special type of bond that can be converted into cash when necessary to raise funds for assistance for TEPCO’s compensation.
The current ceiling for these bonds, 5 trillion yen, will likely have to be raised when compensation for decontamination work, probably the costliest part, is added.
Separately from assistance for compensation, the government plans to invest 1 trillion yen in TEPCO through the Nuclear Damage Liability Facilitation Fund and reform the company drastically under state control.
This article was written by Kazumasa Takenaka and Kaname Ohira.