Japan panel eyes 7,400 job cuts at TEPCO

TOKYO (AFP) ― A Japanese government panel overseeing the restructuring of TEPCO is to demand the company slash 7,400 jobs to help pay for the clean up at Fukushima nuclear plant, a report said Wednesday.

The panel is also considering calling for the resignation of the beleaguered company’s management in a move that would also see them forfeit their retirement benefits, another report said.

A paper, to be issued by the panel as early as Oct. 3, will urge Tokyo Electric Power Co. to cut 7,400 jobs ― about 14 percent of the group workforce

― by the end of March 2014, the mass-circulation Yomiuri Shimbun said.

The committee considers restructuring vital to securing sufficient funds to compensate the tens of thousands affected by the nuclear meltdown at Fukushima caused by the earthquake and tsunami that hit Japan on March 11.

TEPCO could face a capital shortfall even if it hikes electricity charges by about 10 percent without restarting the many reactors that are offline for safety checkups, the Yomiuri said, citing a copy of the report.

It said that TEPCO would need three-to-four trillion yen ($39-52 billion) to compensate the people and businesses affected, in addition to another several trillion yen to decommission the stricken nuclear reactors.

Japan has created a state-backed entity that would pool funds from TEPCO and other nuclear power companies as well as the government to guarantee that compensation can be paid out.

TEPCO, long one of the world’s biggest power companies, has only about one trillion yen of its own capital.

News agency Kyodo and private broadcaster TBS said the panel also believes the company’s senior figures must go.

The management should “fulfill its business responsibility through measures including resigning, declining retirement pay and returning stock holdings” before the firm can receive any government money, Kyodo quoted the panel report as saying.

The commission is also set to call for raising the number of shares TEPCO can issue ― shares that are likely to be bought by the government, putting the company under effective state control, the Yomiuri said.

The operator of Fukushima Daiichi plant incurred a net loss of 571.8 billion yen ($7.4 billion) for the April-June quarter following the March radiation disaster.

The world’s worst nuclear accident since Chernobyl 25 years ago has forced tens of thousands of people to flee their homes and has heavily damaged farming, fisheries and tourism in the region.

Rising public distrust of nuclear technology has meant many atomic reactors have been out of action since the March 11 quake as communities refuse to allow them to come back online over safety fears.

In a bid to stave off possible electricity shortfalls, TEPCO has boosted its purchases of thermal fuel, further adding to the costs the company has had to bear.

TEPCO shares on Tuesday were trading around 248 yen, up a little over two percent.