Japan sets $24.8 billion fund to cover nuclear crisis compensation claims

Japan sets $24.8 billion fund to cover nuclear crisis compensation claims

2011-06-24 06:07:56 GMT+7 (ICT)

TOKYO (BNO NEWS) -- The government of Japan on Thursday announced that a budget of 2 trillion yen ($24.8 billion) is being prepared to be distributed to cover compensation claims in relation to the nuclear crisis at the Fukushima Daiichi nuclear power plant that begun with the devastating earthquake last March.

The Tokyo Electric Power Co. (Tepco), which operates the Fukushima Daiichi nuclear power plant, has been facing massive compensation claims, which will be aided by these funds in the form of special government bonds, Kyodo news agency reported.

The government will be issuing the bonds - which have no interest and can be used at any time - to a newly established state-backed entity that has been structured to help Tepco during the ongoing crisis. The bonds are expected to enter Japan's second extra budget for the year's fiscal, which will focus on the country's reconstruction efforts.

In addition, the Japanese government is also planning a second fund worth 100 billion yen ($1.24 billion) to monitor and follow the health development of residents - in the Fukushima Prefecture - affected by Tepco's nuclear crisis during the next 30 years.

Health concerns, especially long-term impacts, have constantly increased as radiation continues to leak from the crippled nuclear plant over three months after the earthquake and tsunami struck the region.

On Tuesday, reports indicated that Japanese Prime Minister Naoto Kan would resign by the end of August, just after he was able to secure parliamentary passage of the second extra budget, as well as a bill that will allow the government to issue bonds in order to cover the year's fiscal deficit.

Japan has been facing an ongoing nuclear crisis since the Fukushima Daiichi nuclear power plant was severely damaged on March 11 when a 9.0-magnitude earthquake and a subsequent tsunami devastated the country. The disaster disabled the cooling systems of the plant, and radioactive elements leaked into the sea and were later found in water, air and food products in some parts of Japan.

At least 23,482 people were killed, while 8,069 people remain missing. There are still more than 88,000 people who are staying in shelters in 21 prefectures around Japan.

According to the Japan Research Institute, the country's reconstruction efforts will cost between 14 trillion yen ($174.58 billion) and 18 trillion yen ($224.46 billion) in the upcoming 10 years, including 9.1 trillion yen ($113.47 billion) this year alone. Japan has already allocated a 4 trillion yen ($48.89 billion) emergency budget to finance the early phase of reconstruction efforts following the disaster.

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