Tokyo Electric Power, the operator of the crippled Fukushima nuclear plant, announced that they need to make at least $1.1 billion more cuts to their annual costs in order to stay in business. The mounting costs of the nuclear meltdown of 2011 is taking its toll on the utility company, especially since the Daiichi plant remains inoperable two years after the disaster.
That figure is on top of the $35 billion that they need to cut on expenses until 2021. They are expected to post a loss of $1.3 billion in the fiscal year that ended March 31. The decommissioning of the plant itself will take years, or even decades, to finish and the costs could prove crippling for the company. They would also need to compensate the thousands of displaced residents who had to evacuate during one of the worst nuclear disasters of recent times. Lawsuits from different groups, including the US military who joined the clean-up days after the disaster, will also cut into the company’s finances. They are expecting all of their Fukushima-related expenses to reach around $128 billion, which is equivalent to 2% of Japan’s entire gross domestic product.
In a statement, the company said that they will make all the necessary reductions to ensure that they will stay afloat. This includes overhauling the whole organizational structure and reviewing procurement procedures due to the rising cost of fuel. They received $10 billion of public cash last year and in return gave the government a controlling stake in the company. They have also received various grants and loans to ensure that they won’t go under, since they provide electricity to millions of citizens.
[ via Global Post ]