Japan’s Parliament passed a law on Wednesday that will allow the use of public funds to shore up the company operating the crippled Fukushima Daiichi nuclear plant, and help it pay what is expected to amount to billions of dollars in compensation claims.The law creates a state-backed fund that will pay damages to victims of the disaster at the plant, where three reactors melted down and spewed radiation after cooling systems were lost in the March tsunami and quake. The government will initially pay 2 trillion yen, or nearly $26 billion, into the fund, Banri Kaieda, the trade minister, told lawmakers on Tuesday.Swift compensation payments are vital not only in helping victims, analysts say, but also in helping to kick-start economic growth in the disaster zone. But the sheer size of payments could easily render Tokyo Electric Power, the embattled operator of the plant, insolvent.
Read the rest of the story: Japan Passes Law Supporting Tepco.
Tokyo Electric Power should face unlimited liability for damages stemming from its crippled nuclear power plant, Chief Cabinet Secretary Yukio Edano said on Monday, indicating Japan’s government will take a hard line against the utility in its rescue plan.
Officials from the government, Tokyo Electric (9501.T), and creditor banks have been scrambling to craft a scheme that would allow the utility to cope with the massive bill of compensating displaced residents while staying in business as a private firm.
The plan under discussion would create a fund to provide loans for and buy preferred shares from Tokyo Electric, commonly known as Tepco. Other utilities would pay premiums as a buffer against future accidents, and Tepco would repay the fund from its profits over several years, sources with knowledge of the talks have told Reuters.
Read the rest of the story: Japan says no limits to Tepco liability from nuclear disaster.