Toshiba to the rescue in reactor deals for Georgia
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