Japanese nuclear boss quits over $15bn loss

TEPCO president announces his resignation as company reports record loss in wake of quake-triggered Fukushima crisis.

Fukushima plant
Analysts suggest compensation payouts to victims of the Fukushima nuclear disaster could reach $130bn [Reuters]

The operator of Japan’s crippled Fukushima Daiichi nuclear plant has posted an annual net loss of $15bn – the biggest-ever loss by a Japanese company outside the financial sector.

The Tokyo Electric Power Company, or Tepco, announced the loss on Friday, and said its president, Masataka Shimizu, would step down.

Shimizu apologised at his company’s Tokyo headquarters and said he was taking responsibility in the wake of the March 11 earthquake and tsunami that struck Japan and damaged the company’s plant, sparking a major nuclear crisis.

“I wanted to take managerial responsibility and bring a symbolic close,” he told reporters, bowing during the news conference. “We are doing our utmost to settle the crisis.”

Tepco is to appoint Toshio Nishizawa, its managing director, to replace Shimizu, effective after a June shareholders meeting.

The company has come under criticism for its handling of the crisis – thousands of people have been displaced and radiation levels around the plant still remain high.

Al Jazeera’s Laura Kyle, reporting from Tokyo, said, “The government has been very critical of the way Tepco have been handling the nuclear crisis.”

Tepco also announced it will be permanently shutting down its four damaged reactors at the Fukushima plant.

The crisis has prompted talk about the future of nuclear energy in Japan.

Cost of compensation

The loss, the biggest in Tepco’s 60-year history, includes the costs of scrapping damaged nuclear reactors at Fukushima and a write-off of deferred tax assets.

Compensation payouts are also likely to depress profits for many years.

“Today’s loss figures do not account for the huge amount of compensation that is going to have to be paid out to more than 80,000 people who have been directly affected by the disaster, having to be relocated outside the 20-30km zone,” our correspondent said.

“There have been talks that the government itself is going to have to bail out Tepco, which of course, has come under a lot of fire from the Japanese who see it as taxpayer money bailing out a company. It seems to have handled the crisis very badly.”

The government last week agreed to set up a fund using taxpayers’ money to help Tepco cope with compensation.

The company did not offer guidance for the current year to March 2012, given uncertainty over how much of its profit will go towards paying off those forced to evacuate the areas surrounding the crippled plant, and others due compensation.

Tepco has not made an estimate for the likely cost of compensating all victims. Analyst forecasts have ranged from around $25bn up to $130bn, if the crisis at the nuclear complex drags on.

In another development, Japan’s central bank kept its key interest rate unchanged at close to zero on Friday. The move was widely expected following the announcement on Thursday that the country had slipped back into recession .

Source: Al Jazeera, News Agencies