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Tepco's handling of Japan's nuclear crisis under severe scrutiny

The International Atomic Energy Agency’s visit to Japan this week coincides with unprecedented criticism of the Tokyo Electric Power Company's handling of Japan's nuclear crisis following the March 11 earthquake.

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But data from the plant indicated that the earthquake had been more powerful than three of the six reactors were built to withstand, raising the possibility that at least one of the reactors was disabled before the tsunami arrived.

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Deadline for cold shutdown, new leak

Tepco has vowed to bring radiation levels under control and achieve "cold shutdown" in four stricken nuclear reactors between October and January next year, a deadline some experts have dismissed as unrealistic.

Work to cool the reactors had been hampered by dangerously high radiation levels at the site; the biggest challenge now facing workers is how to store tens of thousands of tons of contaminated water that has gathered in reactor buildings, turbines, and trenches.

Makeshift containers that are being used to store the water are almost full, and work has yet to be completed on a system to reprocess the liquid so that it can be reused to cool the reactors. On Thursday, Tepco said one water storage facility appeared to have sprung a leak.

What will this cost Tepco?

The firm also faces a compensation bill running into trillions of yen that will hit profits for years to come. Its stock has fallen more than 80 percent since the day before the tsunami, and earlier this month it recorded the biggest annual loss ever by a Japanese company outside the financial sector.

The government agreed to set up a special fund using taxpayers' money from which Tepco can draw cash – which it will then have to pay back – to cover damages claims that some analysts say could reach $130 billion.

Tepco’s future looks increasingly bleak, says Jun Okumura, a senior analyst at the Eurasia Group.

“Tepco is the loser in all of this,” he told the Monitor. “It has to pay damages, write down four [irreparably damaged] reactors, as well as pay about 1 trillion yen for extra fuel. That’s a lot of money.

“We still don’t know how much the damages bill will be. If the amount is so huge and the banks refuse to cooperate, the government will be forced to step in with more cash.”

While Tepco says it has no immediate plans to pass on extra costs to customers, Mr. Okumura believes consumers will inevitably pay the bill for extra fuel. “Unless the government is going to foot the bill, that money will have to come out of utility rates,” he says.

The 18-member IAEA team, which includes experts from the US, China, France, and India, will visit the Fukushima Daiichi plant on Friday and is expected to present its findings at an IAEA ministerial meeting in late June.


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