(Updates with compensation estimate in second paragraph.)
Dec. 27 (Bloomberg) -- Tokyo Electric Power Co. requested 689.4 billion yen ($8.8 billion) in further aid from Japan’s government to help the utility cover compensation payments to those affected by the Fukushima nuclear disaster.
The utility known as Tepco revised its estimate for compensation payments for the disaster to 1.7 trillion yen by March 2013 from 1.01 trillion yen, it said in a statement on its website. The government’s Nuclear Damage Liability Facilitation Fund will seek approval from Trade and Industry Minister Yukio Edano as early as next month to provide the support to Tepco, said Soichi Yamamoto, an official at the body.
A government panel in October said Tepco may have to pay 4.5 trillion yen in compensation payments by 2013, almost three times as much as the utility’s estimate. Decommissioning the reactors damaged in the March earthquake and tsunami at the Fukushima Dai-Ichi station may cost 1.15 trillion yen, according to the government.
“We made our estimate based on factors we can foresee at the moment,” Tepco spokesman Hiroki Kawamata said today, when asked about the difference in assessments. “It’s possible our actual compensation payments will be different from what we predict.”
The costs are pushing Tepco to the brink of collapse. The liability fund may buy preferred stock in Tepco, effectively nationalizing the utility to avoid insolvency, the Yomiuri newspaper reported on Dec. 21. Banks may be asked to lend 1 trillion yen to the company, the paper said.
Tepco won government approval for an initial disbursement of about 900 billion yen from the fund in November. New guidelines approved by the government earlier this month raised the number of those eligible for payments to about 1.5 million people. About 160,000 people were forced to flee the radiation spewing from the plant. The government has yet to say how many can return and when.
--Editors: Aaron Sheldrick, Ryan Woo
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