Packbot view of the Equipment Hatch at the north-east area of the first floor of Unit 3 Reactor Building at Fukushima Daiichi Nuclear Power Station, 2 November 2011. TEPCO

By Tsuyoshi Inajima and Yuji Okada
4 November 2011 Tokyo Electric Power Co. won approval for a 900 billion yen ($11.5 billion) bailout from the government after the Fukushima nuclear catastrophe to avert bankruptcy and start paying compensation for the crisis. Trade and Industry Minister Yukio Edano approved the support after the company known as Tepco committed to cutting 7,400 jobs and 2.5 trillion yen in costs. The utility forecast an annual loss of 600 billion yen, its second since the March earthquake and tsunami wrecked its Fukushima nuclear plant. The government of Prime Minister Yoshihiko Noda is stepping in to ensure residents, farmers, fishermen and forestry businesses are properly compensated by a utility that supplies power to 29 million customers in the political and economic heart of Japan. Tepco may need more aid after March 2013, said Takashi Aoki, who helps manage 120 billion yen at Tokyo-based Mizuho Asset Management Co. “Tepco may wipe out its net assets of 708.8 billion yen by the end of next fiscal year” without an increase in electricity prices and the restart of nuclear power plants, Aoki said. The forecast by Japan’s biggest utility brings its losses to 1.8 trillion yen since the disaster. The company plans to cut about 14 percent of its workforce and shave off the costs during the next 10 years, it said in a statement today. Tepco shares fell 0.7 percent to 300 yen at the close in Tokyo today. They are down 86 percent since three reactors melted down at the Fukushima Dai-Ichi nuclear plant north of Tokyo. The company reported first-half earnings at about 4 p.m. after the market closed. Tepco had a 627.3 billion yen loss in the six months to Sept. 31 against a profit of 92 billion yen a year earlier. It’s forecasting an operating loss of 305 billion yen for the full- year, according to its earnings statement. Its loss was 1.25 trillion yen in the year to March 31 and 572 billion yen in this year’s first quarter. The reactor meltdowns in Fukushima forced 160,000 people to flee radiation and damaged fishing, farming and forestry businesses. “Tepco must compensate those affected with sincerity and generosity as well as carry out a thorough reorganization,” Edano said today in Tokyo. Japan’s Prime Minister Noda said in Parliament on Nov. 2 he wants Tepco to “speedily” pay compensation to victims of the Fukushima nuclear disaster. The crisis shook the foundations of the country’s energy policy, which will now shift from a reliance on nuclear power. […] The bill to clean up the contamination is estimated to be $14 billion over 30 years, according to the environment ministry. […]

Japan Starts Bailout of Tepco After Fukushima Causes More Losses