Tokyo (AFP) - The operator of Japan's crippled Fukushima nuclear plant has paid way over the odds to contractors, a company spokesman said Friday, vowing to boost cost-controls at the taxpayer-subsidised firm.
An internal probe looking at how contracts worth 1 trillion yen ($10 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 readies to nearly double its financial support for the cash-stripped 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 Tokyo Electric Power Co. (TEPCO) agreed to pay 21 million yen ($200,000) for some construction work linked to a nuclear power plant, but this 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 including in areas pointed out by the panel," the spokesman said.
The ramping is the result of farming out work to contractors, who themselves sub-contract, sometimes having hired retired TEPCO officials, the Asahi Shimbun, which first reported the case, said.
The revelation will be a further embarrassment to bosses at the beleaguered firm, which has earned a reputation for inefficiency and ineptitude since the tsunami of March 2011 sent reactors at Fukushima into meltdown.
Japanese taxpayers were forced in 2012 to stump up billions of dollars to keep the giant utility afloat as it struggled with the enormous costs of decommissioning the reactors, cleaning up the mess they have made and paying compensation to people who lost their homes to the disaster.
The government last month approved a further $1 billion to pay for facilities to store radioactive waste.
Under a restructuring plan submitted at the end of last year, TEPCO said it wants to cut costs by 3.365 trillion yen between fiscal 2012 and 2021 through measures that would include a greater use of competitive bidding in procurement.
Critics say that Japan's utilities, which have near-monopolies on both the production and distribution of power, have little financial savvy because they have never faced competition and are accustomed to being able to pass on costs to consumers.
They add taxpayers repeatedly find themselves on the hook because of fears that if TEPCO went under, it could deal a huge blow to the viability of some of its lenders, which would have knock-on effects in other parts of the economy.
Its failure could also affect electricity production in the economically-vital Tokyo area.
TEPCO and Japan have yet to figure out the exact cost of compensating tens of thousands of people who had to flee their homes and livelihoods to avoid radiation.