TEPCO staff are questioned by a reporter during a press conference at the company's headquarters in Tokyo. AP

Fukushima owners begin 'condolence money' payout for radiation damage

Tokyo Electric Power Company’s share price reaches an all-time low after the company pledges to cover evacuation costs.

THE OPERATOR of the troubled Fukushima I nuclear power plant has begun to pay compensation to Japan’s local governments for the expenses incurred in the wake of last month’s accidents at the plant.

Reuters cited statements of an official from the Tokyo Electric Power Company (TEPCO) which said the payments would cover the cost of evacuating residents from the areas around the plant, or those affected by the radiation crisis.

There was no immediate decision, however, on how many local authorities would receive the payments – with local newspaper Yomuiri Shimbun saying TEPCO would hold meetings with the Japanese government to decide where the money would be spent.

CNBC’s Moneycontrol website suggested that compensation claims for radiation damage caused by the accidents could reach 11 trillion yen, or around €91.8 billion, using figures contained in a Bank of America briefing note.

A bill of that magnitude would see the company almost certainly face bankruptcy, with TEPCO’s equity only around a quarter of that amount and with the company already heavily burdened with debt.

The same briefing note suggested, however, that the ultimate cost to TEPCO would be dictated by how quickly it could resolve the ongoing crisis at the plant, where efforts are ongoing to stop the leak of highly radioactive water into the Pacific ocean.

The paper suggested that if the crisis was resolved within two months, damage could be limited to two trillion yen (€16.9bn), with the bill rising to 3 trillion yen (€25bn) if the problems continued for six months or more.

Efforts to seal the leak in a concrete basin at one reactor in Fukushima have now turned to the use of “liquid glass” in the hope of stopping radiation from continuing to leak into the broader atmosphere.

Japan is to apply new restrictions on the eating of fish caught in its waters, mirroring its current rules on vegetables, after some fish caught in waters off the Ibaraki prefecture neighbouring Fukushima tested positive for iodine and cesium above the legal limits.

In Tokyo, shares in TEPCO closed at their lowest value ever as news of the damages payments broke, dropping by over 18 per cent in a single day’s trading.

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