Japan officials draw up Tepco breakup plan: report

Monday, 4 July 2011 00:00 - - {{hitsCtrl.values.hits}}

(Reuters) - A group of Japanese government heavyweights have written a secret proposal to break up Tokyo Electric Power Co and nationalise its nuclear operations, a newspaper said on Sunday.

The plan, drawn up by Deputy Chief Cabinet Secretary Yoshito Sengoku, would force Tokyo Electric sell its power distribution business and bring its nuclear power operations under state control, leaving the company with power generation operations using thermal and hydraulic power plants.

It would leave Tokyo Electric, better known as Tepco, with only 1.6 trillion yen ($19.85 billion) in power business assets compared with 7 trillion yen at present, the Mainichi daily said, citing informed sources.

The proposal has been kept under wraps as the government focuses on a taxpayer bailout for the utility to soothe market worries.

Sengoku, who has held meetings with Tepco chairman Tsunehisa Katsumata several times, has notified Katsumata about the internal document, the report said.

In June, the government approved a draft law to help Tepco pay billions of dollars in compensation to refugees from around its crippled Fukushima Daiichi nuclear plant.

The nuclear crisis began with the March 11 earthquake and tsunami, which knocked out reactor cooling systems at the plant, triggering meltdowns and radiation leaks that have yet to be brought under control.

For years Tepco has resisted any attempt to end its monopoly on power in Tokyo and the surrounding region. The disaster has given its opponents a chance to break up Asia’s biggest power company.