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Tepco’s hopes rest on dubious reform plan, new 77-year-old chief

Former Hitachi chairman to become troubled utility’s chairman in June

20170524-Tepco-77-year-old-chief_article_main_image.jpgIncoming Tepco Chairman Takashi Kawamura, left, speaks at a press conference in Tokyo on April 3, alongside incoming President Tomoaki Kobayakawa and current President Naomi Hirose.

TOKYO — The incoming leadership team at Tokyo Electric Power Co. Holdings. faces an uphill battle. Turning around the struggling utility will require pushing ahead with badly needed reforms and overcoming deep internal divisions.

Takashi Kawamura, a 77-year-old former Hitachi chairman who currently serves as the industrial conglomerate’s chairman emeritus, will become chairman of Japan’s biggest utility, succeeding 76-year-old Fumio Sudo.

Tomoaki Kobayakawa, a 53-year-old Tepco director, will become president, taking over from 64-year-old Naomi Hirose, who will become a vice chairman with no representation rights.

The new team is set to be approved on June 23 at a shareholders meeting.

Difficult target

Tepco, still reeling from the 2011 meltdowns at one of its nuclear power plants in Fukushima Prefecture, on May 11 raised eyebrows by announcing the latest “comprehensive special business plan.” The plan contains what seems to be an overly optimistic target: securing 500 billion yen ($4.46 billion) in funds annually until 2026.

On May 12, the Ministry of Economy, Trade and Industry, which supervises the electric power industry, convened a meeting of experts to discuss Tepco’s reforms. In their hearts, many of the panelists are skeptical about the plan’s feasibility.

Kawamura himself has acknowledged that putting Tepco back on its feet will be quite difficult. “Just making ordinary efforts will not be enough,” he said.

Kawamura is not acquainted with Kobayakawa. The two have yet to sit down and talk about Tepco’s future business strategy.

The costs of dealing with the aftermath of the Fukushima disaster are estimated to reach about 22 trillion yen. Tepco will have to cough up 500 billion yen annually over the next 30 years.

http://asia.nikkei.com/Business/Companies/Tepco-s-hopes-rest-on-dubious-reform-plan-new-77-year-old-chief

June 5, 2017 Posted by | Fukushima 2017 | , | Leave a comment