TEPCO to seek 9 billion dollars in aid for damages payments

Oct 18, 2011, 11:43 GMT

Tokyo - The operator of a damaged nuclear power plant in Japan was to seek around 700 billion yen (9.1 billion dollars) in aid from the state to help meet compensation payments, media reports said Tuesday.

The lifeline would help Tokyo Electric Power Co (TEPCO) avoid a crippling cash crunch as it faces claims from victims of the nuclear disaster that followed the March 11 earthquake and tsunami, the Nikkei business daily reported.

But it would come with the condition that the company give the government stronger oversight, essentially putting the utility under state management, the Nikkei said without reporting a source for its information.

The company's Fukushima Daiichi Nuclear Power Station in north-eastern Japan has been leaking radioactive material into the environment since it was hit by a magnitude-9 quake and tsunami. About 87,000 people have been forced to leave the area around the plant.

The aid to TEPCO would be the first disbursement from a state institution established in September that draws its funding from government bonds, the Nikkei said.

The cash infusion was expected to enable TEPCO to avoid posting a negative net worth as of the end of September, the newspaper said.

Chie Hosoda, a TEPCO spokeswoman, said the company had not decided how much it would seek in aid from the institution.

By early November, the company and the institution are to come up with an emergency plan outlining cost cutting, asset sales and other restructuring steps, Hosoda said.

Compensation for the disaster could cost the operator up to 3.6 trillion yen in the financial year that will end March 30, according to a committee that has examined the company's finances, the newspaper said.