Construction halt means bankruptcy: Taipower
April 28, 2014, 12:05 am TWN
TAIPEI, Taiwan -- The state-run electricity supplier, Taiwan Power Co. (Taipower) said Sunday that the government's decision to halt construction of the controversial Fourth Nuclear Power Plant is tantamount to sentencing the company to bankruptcy.
The decision came after a meeting among President Ma Ying-jeou, who doubles as chairman of the ruling Kuomintang (KMT), Premier Jiang Yi-huah and KMT mayors and magistrates earlier in the day.
They agreed that the already-completed no. 1 reactor will not be brought online once its ongoing safety inspections are concluded, and that construction of the no. 2 reactor, which is 91.5 percent completed, will be halted.
Taipower Chairman Hwang Jung-chiou said halting the construction means that the company cannot reclaim the money it has already spent on the project.
Taipower has spent NT$283 billion (US$93.7 billion) on the plant. It has an accumulated loss of NT$208 billion.
As a result, Taipower's debts will exceed its capital of NT$330 billion (US$10.9 billion). It will mean “an announcement of the company's bankruptcy,” Hwang said, adding that he is discussing with colleagues and accountants how to handle the massive losses caused by the nuclear power plant project.
Asked what Taipower will do now that the decision has been made to halt the nuclear power plant's construction, Hwang said that “it's not easy to resolve Taipower's problem” and that it will be “a while” before he will be able to make a public statement.
Asked whether or not electricity rates will be increased, Hwang said Taipower cannot even think that far ahead.
Vice Economics Minister Duh Tyzz-jiun said Taipower's NT$283 billion “investment” in the fourth nuclear power plant project will be listed as an asset for the time being to keep it from going bankrupt.
Article 211 of the country's Company Act stipulates that “in case the assets of a company is insufficient to set off its liabilities, the board of directors shall apply to the court for pronouncement of its bankruptcy.”
Earlier in the day, Taipower President Chu Wen-chen said that if the fourth nuclear power plant cannot begin operating and electricty demand continues to grow, raising the electricty rates by 10 percent will be “a modest estimate.”
“Stopping the construction of the fourth nuclear power plant will cause the greatest losses,” Chu said, adding that the halt will lead to many contract and technical problems.
The project has already been stopped once in 2000, resulting in a serious delay to the construction process and a hike in costs, he noted, warning of the consequences of another halt.
Taipower is a state-run enterprise paid for by the taxpayers, he said, exhorting the public to cherish the company.