TOKYO, Dec 20 (Reuters) - Japan's government on Tuesday urged Fukushima operator Tokyo Electric Power (Tepco) to integrate its transmission and nuclear operations with peers to cut costs and generate higher income to pay the costs from the 2011 nuclear disaster.
A government panel that has held intensive meetings since October said the next six months will be "make or break" for Tepco's reform efforts, after it earlier nearly doubled the estimated costs of the Fukushima disaster to more than $180 billion.
Tepco's two previous business plans written to map out a recovery from the three meltdowns at its Fukushima Daiichi nuclear plant after a 2011 earthquake and tsunami were based on assumptions of other nuclear reactors returning to service that now look unlikely anytime soon. The panel said that now is the time for Tepco to act boldly.
"Tepco needs to focus on securing funds for compensation and decommissioning as well as boosting income through management reforms. And it needs to carry out those actions with a sense of urgency," the panel said. "The next half year is make or break for Tepco's reform."
Tepco said it will come up with a new plan next year.
"We take the proposal seriously and will put bold reforms into effect to fulfil our responsibilities for Fukushima," Tepco President Naomi Hirose told reporters after the meeting where he attended as an observer.
The panel earlier this month doubled its estimate for the Fukushima-related costs to 21.5 trillion yen ($182 billion). Tepco's portion of the burden has risen to 15.9 trillion yen from 7.2 trillion yen.
The panel also recommended that Tepco fully integrates its fuel and thermal power operations into JERA Co, a joint venture between the company and Chubu Electric Power, and urged the same for its transmission and nuclear operations.
"We will look into policies that enhance alliances," said Minister for Economy, Trade and Industry Hiroshige Seko when asked if the government will change regulations to support consolidation between Tepco and other utilities.
Other utilities have voiced opposition to joining with Tepco because of concerns they will get saddled with the Fukushima costs.
The panel also called for financial institutions and other Tepco stakeholders to provide support to what was once Asia's biggest utility.
Tepco's Hirose reiterated that his company still aims to issue bonds by the end of March.
The panel will check whether the Tepco's revised business plan and its management scheme reflects its proposal in the early half of next year, the proposal said. ($1 = 117.8300 yen) (Reporting by Yuka Obayashi; Editing by Aaron Sheldrick and Christian Schmollinger)