Tokyo Electric Power Or Being "Dismembered"

A plan is being discussed by the Japanese government, which may first be supervised by the government of Tokyo electric power company, and then proceed to restructure and split the first nuclear power plant operator.

Tokyo Electric Power has actually gone bankrupt.

According to Japanese media 16 reported that the government began to seriously discuss how to deal with the East power company in March 28th.

In accordance with the plan envisaged, once the number of compensation for Tokyo Electric power is fixed and the cost of radiation leakage treatment at Fukushima nuclear power station is completed, the bankruptcy procedure can be entered.

At the same time, special measures should be formulated to put East power under government supervision and pave the way for bankruptcy reorganization.

The law will stipulate that the government set up an independent committee to supervise the personnel, compensation process and management reform of the east electric power company. The government provided guarantees to Tokyo Electric Power from bank loans for expenses related to the disposal of nuclear power plant accidents, and allowed the company to postpone repayment of debts owed before the March 11th earthquake and tsunami.

Japanese media reported on the 15 day that the government started to discuss the formulation of a framework for disaster compensation on the same day, and the final compensation amount could reach trillions of yen.

Tokyo Electric Power Company 2009 assets in the financial year 13 trillion and 200 billion yen (about 159 billion U.S. dollars), liabilities 10 trillion and 600 billion yen (127 billion 600 million U.S. dollars). The estimated data of Asahi Shimbun showed that the total compensation and accident handling costs totalling about 10 trillion yen (US $120 billion 400 million), which means that Tokyo Electric Power Company is actually bankrupt.

The scale of restructuring will be much smaller than now.

In accordance with the proposed plan, Tokyo will be restructured into a holding company and several subsidiaries, generating electricity and transmission business respectively. In the power generation sector, thermal power and hydropower enterprises will be gradually sold. Eventually, Tokyo will become a power transmission company with a much smaller scale than now.

Some government officials say that the resolution may start two or three years after the special measures act is enacted.

Japanese power companies also operate generation and transmission businesses. The scheme is supported by the reformers in the government's power sector.

In the privatization of the electricity sector, the separation of power generation and transmission sectors is aimed at promoting competition and reducing electricity prices.

Tokyo Electric Power Company was founded in 1951, employing more than 38 thousand employees, providing 1/3 of Japan's electricity demand, including the capital of Tokyo.

Analysis

The final plan is "watered down".

According to Xinhua news agency, the scheme is still "secret". A senior official of the Ministry of energy and resources, Ministry of economy and industry, said the plan had not been approved. A middle official of the Ministry of labor said: "it is only discussed in the prime minister's residence and the national strategy indoor department."

Critics say the fate of the scheme is partly determined by political wrangling. Specifically, it is the two factions competing in the Ministry of production and resources and the energy department.

Around 2004, two people belonging to the reformers of the power industry acted as deputy officers of the Ministry of economy and trade. However, opposition reformers now hold key posts in the province. Ishida Tetsu, former director of resources and energy department, retired from power in January this year and served as senior consultant.

Commented that the plan could be watered down by politicians and production officials in Parliament.

Japanese media reported that Tokyo and the political circles were "hard" and had "some people" in the main political parties and the Congress. In addition, the company spends a lot of money on advertising, which affects public opinion on nuclear power safety.