Wednesday, May 11, 2011

Japan to set up nuke plant compensation plan

The operator of Japan's radiation-leaking nuclear plant has agreed to drastic restructuring and cost-cutting in exchange for a government plan to support the company in its obligations to compensate people affected by the crisis.

Tokyo Electric Power Co., which operates the Fukushima Dai-ichi plant, said Wednesday it accepted the government-set reorganization plan. To insure damages, the government plans to create a fund of mandatory contributions from electric utilities in case the total exceeds TEPCO's financial capacity.

TEPCO has sought a 2 trillion yen ($24.8 billion) loan to tide it through the initial emergency. It also expects to pay 50 billion yen ($620 million) in initial compensation to the nearly 80,000 residents evacuated around the plant. Overall damages are expected to be much higher.

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