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Scrapping Nuke 4 to hasten Taipower bankruptcy: gov't

TAIPEI, Taiwan -- If the Fourth Nuclear Power Plant is scrapped, then the Taiwan Power Company (Taipower, 台電) will either have to declare bankruptcy or request a capital increase, the government said yesterday.

The government recently made the decision to “seal up” Nuke 4, that is to halt the construction of the Fourth Nuclear Power Plant. Whether or not it is to be completed will be decided by public referendum at a later date.

The Deputy Minister of Economic Affairs Duh Tyzz-jiun (杜紫軍) said that safety examinations on Nuke 4's first reactor will be completed in two months, upon which the seal-up process will be initiated. The construction on the nuclear power plant's second reactor will also be halted.

The Ministry of Economic Affairs (MOEA) has requested that the Bureau of Energy and Taiwan Power Company (Taipower, 台電) make a proposal by the end of June regarding how to implement the seal-up process and the costs involved.

Nuke 4 is an investment made by Taipower, the state-owned company that provides electricity nationally. According to Duh, the decision to scrap Nuke 4 is equivalent to listing Taipower's NT$283 billion investment as a debt liability. In that case, Taipower will have to face two options: to request a capital increase or to declare bankruptcy.

An Investment that Adds a Burden to Taipower

In accordance with accounting principles, an investment may only be listed as an asset if it generates income. As such, once Nuke 4 is scrapped, Taipower's investment will have to be considered a loss.

Taipower has net assets of NT$330 billion, and as of the end of last year, the company had incurred debt totaling NT$208.4 billion. According to Duh, the budget for Nuke 4 amounted to NT$283.8 billion, of which NT$270 billion has already been spent. In the event that Nuke 4 is listed as a debt obligation, Taipower may have to declare bankruptcy. A capital increase, on the other hand, has to be approved by the board as well as the Legislature. This will also be considered a burden for the public, he added.

Taipower has said that without Nuke 4, utility charges may have to go up in the future. Democratic Progressive Party lawmakers said the MOEA has not only threatened an electricity price hike but also Taipower's bankruptcy in an effort to push for the construction of Nuke 4.

Science and Technology Minister Simon Chang (張善政) said that it is the hope of the government to further develop renewable energy so that it will make up 15 percent of Taiwan's total energy supply by 2025.

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