Toshiba to the res­cue in re­ac­tor deals for Ge­or­gia

The Star Early Edition - - INTERNATIONAL - Yuri Kageyama

MONEY-los­ing Ja­panese nu­clear and elec­tron­ics com­pany Toshiba will pay $3.68 bil­lion (R47.5bn) to­ward the con­struc­tion of two re­ac­tors in Ge­or­gia by its US unit West­ing­house, which has filed for bank­ruptcy pro­tec­tion.

Tokyo-based Toshiba said on Satur­day that the pay­ment, un­der agree­ment with the op­er­a­tor of the Vog­tle plant, will be made from Oc­to­ber to Jan­uary 2021.

Toshiba said the ex­pense has al­ready been fig­ured in its earn­ings. Toshiba re­ported a ¥950bn (R111bn) loss for the fis­cal year ended March.

Paul Bow­ers, chief ex­ec­u­tive of Ge­or­gia Power, the util­ity work­ing with West­ing­house to ex­pand Vog­tle, wel­comed the deal. “We are pleased with to­day’s pos­i­tive de­vel­op­ments with Toshiba and West­ing­house that al­low mo­men­tum to con­tinue at the site while we tran­si­tion project man­age­ment from West­ing­house to South­ern Nu­clear and Ge­or­gia Power,” he said.

Costs in the nu­clear in­dus­try have bal­looned since the March 2011 nu­clear dis­as­ter in north­east­ern Ja­pan, as safety re­quire­ments get tougher and the con­struc­tion of the West­ing­house re­ac­tors has fallen be­hind sched­ule. Toshiba is still in sim­i­lar talks over a South Carolina plant about such pay­ments.

Toshiba’s shoul­der­ing West­ing­house’s costs was part of the ini­tial 2008 re­ac­tor con­struc­tion deal, and the lat­est agree­ment sets the max­i­mum for the pay­ment, ac­cord­ing to Toshiba. Its earn­ings re­ports have failed to get en­dorse­ments from its au­di­tors, given the com­pany’s pre­car­i­ous fi­nances over the US projects. The re­ports are be­ing given as pro­jec­tions, not re­sults.

To stay afloat, Toshiba has been try­ing to sell its lu­cra­tive com­puter chip busi­ness. Even that ef­fort has not gone smoothly. Toshiba is wran­gling with West­ern Dig­i­tal of the US, which has ac­quired some SanDisk op­er­a­tions, in­clud­ing a joint ven­ture with Toshiba in Ja­pan.

Toshiba Pres­i­dent Satoshi Tsunakawa has ac­knowl­edged the com­pany strat­egy based on West­ing­house was a mis­take, but has stressed he doesn’t think West­ern Dig­i­tal can block Toshiba in the chip sale.

Nu­clear power will con­tinue to be a major part of Toshiba’s shrink­ing busi­ness.

It is still re­spon­si­ble for more than a dozen plants in Ja­pan, in­clud­ing de­com­mis­sion­ing Fukushima Dai-ichi nu­clear plant, where three re­ac­tors sank into melt­downs after the 2011 tsunami, in the worst nu­clear dis­as­ter since Ch­er­nobyl.

The en­trance to West­ing­house In­ter­na­tional Head­quar­ters in Cran­berry, Penn­syl­va­nia, But­ler county. De­spite the com­pany hav­ing filed for bank­ruptcy pro­tec­tion it will pro­ceed with the con­struc­tion of two nu­clear re­ac­tors in Ge­or­gia, while its par­ent Toshiba will pay $3.68bn to­wards it. Photo: AP

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