TOKYO -- Japan's government decided Friday to set up a fund to help pay damages stemming from the crisis at a tsunami-crippled nuclear plant, financed by public money and mandatory contributions from utility companies.
Tokyo Electric Power Co. expects a deluge of damage claims from those affected by the radiation-leaking Fukushima Dai-ichi nuclear plant, whose problems constitute the worst nuclear accident since Chernobyl in 1986. However, the utility is not expected to be able to pay all of them.
The government's plan, which would spread the burden for the crisis and must be referred to parliament for its expected approval, would create an entity that collects money for compensation from TEPCO and other utilities that operate nuclear power plants. The government will issue the body special bonds that can be cashed when needed to pay claims. TEPCO earlier this week agreed to a cost-cutting reorganization, also intended to ensure its ability to pay compensation.
Shinichi Ichikawa, director of equity research at Credit Suisse in Tokyo, said the plan needed to achieve three goals: maintain a stable electricity supply, ease concerns of financial markets and ensure victims of the nuclear disaster would be compensated. "It looks like it's a good solution," he said.
Also Friday, the operator of a nuclear plant in central Japan began suspending operations at its reactors while it strengthens tsunami protections, under a separate agreement with the government. -- AP