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188583
Tue, 06/14/2011 - 19:07
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https://oananews.org//node/188583
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Cabinet OKs nuclear disaster compensation bill for Diet submission
TOKYO (Kyodo) - The government on Tuesday submitted to parliament a bill to help Tokyo Electric Power Co. meet its massive compensation payments through the creation of an entity that would provide financial assistance to the company in the wake of the crisis at the Fukushima Daiichi nuclear power plant.
By creating an entity that can receive funds through a special type of government bond and contributions from utilities, the government hopes to ensure swift payment of compensation for the country's worst radiation-leaking accident, which may total trillions of yen. The bill was endorsed by the Cabinet before it was submitted to the Diet.
But the outlook for the bill's early passage in the Diet is uncertain amid political confusion caused by Prime Minister Naoto Kan's announcement that he will resign in the near future, while the main opposition Liberal Democratic Party is preparing a counterproposal.
Industry minister Banri Kaieda, who is also in charge of economic damage stemming from the nuclear disaster, said the government will try as much as possible to prevent the compensation scheme from leading utilities to pass on the costs to consumers through higher electric bills.
Under the proposed legislation, the new institution would be allocated a type of bond from the government that carries no interest and which can be cashed when necessary so that it can secure funding to support TEPCO. The government would also give state guarantees on loans provided by financial institutions to the entity.
Based on what the industry calls the idea of mutual help, electricity firms that own nuclear power plants would be required to make annual contributions to the entity, possibly depending on the number of reactors they have. TEPCO, meanwhile, would additionally repay the money covered by the body.
Although the bill is intended to prepare for possible future nuclear accidents, its main purpose for the time being would be to help TEPCO meet compensation demands from those affected by the nuclear crisis so as to prevent the utility from being crushed by debt.
An official of the Economy, Trade and Industry Ministry said the government has come up with the bill because it thought TEPCO's legal liquidation may cause problems in the compensation payment process or efforts to restore the crippled plant.
The bill also includes an article that would enable the government to provide ''necessary funds'' to the entity in the case that payment of an extremely large amount of accumulated compensation money may obstruct the stable supply of electricity or seriously affect people's lives.
The official said he cannot tell what amount would be considered as extremely large, but noted that the government and parliament would be involved in deciding whether to take such a bailout measure.
Utilities other than TEPCO expressed concerns that the contributions they would be required to pay would lead to an increase in costs.
''I think we cannot help but ask for customers to bear the burden,'' a senior official at Kyushu Electric Power Co. said, suggesting that the bill would lead to a rise in electricity bills.
The nuclear disaster, triggered by the quake-tsunami disaster on March 11, has forced many residents around the radiation-leaking plant in Fukushima Prefecture to evacuate from their homes, and damaged the agriculture, livestock and fishery industries in the region.
The government at one point planned to delay submission of the bill to a subsequent parliament session, but has decided to present it to the ongoing regular Diet session so that victims can benefit more quickly.
It is seeking an early passage of the bill in the hope also of allaying concerns among market players about uncertainties over TEPCO's outlook, which have sent its shares tumbling on stock markets.
The ruling Democratic Party of Japan is hoping to extend the current Diet session beyond the scheduled end of June 22.
By creating an entity that can receive funds through a special type of government bond and contributions from utilities, the government hopes to ensure swift payment of compensation for the country's worst radiation-leaking accident, which may total trillions of yen. The bill was endorsed by the Cabinet before it was submitted to the Diet.
But the outlook for the bill's early passage in the Diet is uncertain amid political confusion caused by Prime Minister Naoto Kan's announcement that he will resign in the near future, while the main opposition Liberal Democratic Party is preparing a counterproposal.
Industry minister Banri Kaieda, who is also in charge of economic damage stemming from the nuclear disaster, said the government will try as much as possible to prevent the compensation scheme from leading utilities to pass on the costs to consumers through higher electric bills.
Under the proposed legislation, the new institution would be allocated a type of bond from the government that carries no interest and which can be cashed when necessary so that it can secure funding to support TEPCO. The government would also give state guarantees on loans provided by financial institutions to the entity.
Based on what the industry calls the idea of mutual help, electricity firms that own nuclear power plants would be required to make annual contributions to the entity, possibly depending on the number of reactors they have. TEPCO, meanwhile, would additionally repay the money covered by the body.
Although the bill is intended to prepare for possible future nuclear accidents, its main purpose for the time being would be to help TEPCO meet compensation demands from those affected by the nuclear crisis so as to prevent the utility from being crushed by debt.
An official of the Economy, Trade and Industry Ministry said the government has come up with the bill because it thought TEPCO's legal liquidation may cause problems in the compensation payment process or efforts to restore the crippled plant.
The bill also includes an article that would enable the government to provide ''necessary funds'' to the entity in the case that payment of an extremely large amount of accumulated compensation money may obstruct the stable supply of electricity or seriously affect people's lives.
The official said he cannot tell what amount would be considered as extremely large, but noted that the government and parliament would be involved in deciding whether to take such a bailout measure.
Utilities other than TEPCO expressed concerns that the contributions they would be required to pay would lead to an increase in costs.
''I think we cannot help but ask for customers to bear the burden,'' a senior official at Kyushu Electric Power Co. said, suggesting that the bill would lead to a rise in electricity bills.
The nuclear disaster, triggered by the quake-tsunami disaster on March 11, has forced many residents around the radiation-leaking plant in Fukushima Prefecture to evacuate from their homes, and damaged the agriculture, livestock and fishery industries in the region.
The government at one point planned to delay submission of the bill to a subsequent parliament session, but has decided to present it to the ongoing regular Diet session so that victims can benefit more quickly.
It is seeking an early passage of the bill in the hope also of allaying concerns among market players about uncertainties over TEPCO's outlook, which have sent its shares tumbling on stock markets.
The ruling Democratic Party of Japan is hoping to extend the current Diet session beyond the scheduled end of June 22.
