Tepco, crippled Fukushima plant's operator, admits wasting public funds

The operator of Japan's crippled Fukushima nuclear plant has paid way over the odds to contractors, a company spokesman said yesterday, and vowed to boost cost controls at the taxpayer-subsidised firm.

An internal probe looking at how contracts worth 1 trillion yen (HK$74 billion) were awarded has found the company routinely paid a lot more than the going rate because prices were inflated by layers of subcontractors.

The revelation comes as the Japanese government prepares to nearly double its financial support for the cash-strapped utility as part of efforts to speed up the removal of contamination in residential areas around the plant and to process compensation payments for victims.

The in-house panel found the Tokyo Electric Power Co (Tepco) agreed to pay 21 million yen for construction work linked to a nuclear power plant, but the work could have been done for about half that, the spokesman confirmed.

In another instance, Tepco was paying a contractor 49,000 yen in daily wages for one worker, but it would have paid only 12,000 yen if it had employed the man directly. "We've been making cost reduction efforts with the panel, and we will further cut costs," the spokesman said.

The ramping up of costs is the result of farming out work to contractors, who themselves subcontract, sometimes having hired retired Tepco officials, the Asahi Shimbun, which first reported the case, said.