Japan's government is considering about 230 billion yen ($2.8 billion) in outlays for aid to Tokyo Electric Power Co. and radiation monitoring in its planned extra budget, according to a draft outline prepared by the Finance Ministry.
Prime Minister Naoto Kan's government has yet to release details of the 2 trillion yen supplementary budget, which will need parliamentary approval. Officials will apply 1.8 trillion yen in tax revenue left over from the last fiscal year to help fund the package, according to the document, a copy of which was obtained by Bloomberg News.
The spending would be aimed at a nuclear crisis that remains unresolved more than three months after Japan's record earthquake and ensuing tsunami crippled Tokyo Electric's Fukushima Dai-Ichi reactor north of Tokyo. The utility, which has seen almost $37 billion of its market value erased, will hold its annual general meeting today.
"The financial future of the company" is "in question," U.S. proxy adviser Glass Lewis & Co. said in a proxy paper to be distributed to shareholders today.
Kan's Cabinet this month submitted legislation to create a public entity to help the company, known as Tepco, pay reparations for the worst nuclear crisis since Chernobyl. The budget will set aside 120 billion yen to help with compensation for damage caused by the Dai-Ichi nuclear reactor disaster.
Health Care Fund
Another 78 billion yen will be used to set up a fund for health care costs of people that were affected by radiation or live near the damaged reactor, the document said.
The cost of dismantling the Fukushima plant may reach 20 trillion yen, and compensation for households in a 20-kilometer evacuation zone may total 630 billion yen over 10 years, according to the Japan Center for Economic Research.
The draft budget also earmarked about 80 billion yen to help households that were indebted before the quake and now need to borrow more for repairs. Additional funds will be devoted to small companies affected by the natural disaster that left more than 23,000 dead or missing, according to the proposal.
Damage to buildings, roads and infrastructure will be around 16.9 trillion yen, the lower end of the government's initial 16 trillion to 25 trillion yen forecast, the Cabinet Office said last week.
The government pledged 4 trillion yen in spending it its first extra budget, which was used to build temporary homes and clean up debris from the earthquake and tsunami.
Kan said he wants parliament to approve his second disaster recovery package, authorize the sale of deficit-covering bonds and enact a renewable energy bill before stepping down.
"I would very much like to see passage of these bills before relinquishing my responsibilities," Kan said yesterday at a late night press conference after announcing some changes to his Cabinet.
