Japan to aid nuclear plant operator

New York Times / August 4, 2011

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TOKYO - The Japanese Parliament passed a law yesterday that will allow the use of public funds to shore up the company operating the crippled Fukushima Daiichi nuclear plant and to help it pay the expected billions of dollars in compensation claims.

The law creates a state-backed fund that will pay damages to victims of the disaster at the plant, where three reactors melted down and spewed radiation after cooling systems were lost in the March tsunami.

The government will initially pay nearly $26 billion into the fund, Banri Kaieda, the trade minister, said Tuesday.

Swift compensation payments are vital not only in helping victims, analysts say, but also in helping to kick-start economic growth in the disaster zone. But the sheer size of payments could easily render Tokyo Electric Power, the embattled operator of the plant, insolvent.

But many uncertainties remain. Under the law, shareholders of Tokyo Electric, as well as other electric power companies in Japan, will also be asked to contribute to the fund. But it is unclear how big those contributions will be.

It is also unclear how many people or businesses might be compensated. More than 100,000 people have had to leave the area around the plant, and fisheries and farms in the vicinity have been destroyed.

Radiation has also been detected in crops and livestock, prompting the government to impose shipment bans.

Yesterday, Tokyo Electric Power reported its second deadly radiation reading in as many days at its crippled plant. It said it detected 5 sieverts of radiation per hour in the No. 1 reactor building. top stories on Twitter

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