Japan struggles to find new Tepco chief to revive firm

Tokyo Electric Power Co , the operator of Japan's Fukushima nuclear plant, is struggling to find someone to head the troubled firm, sources

said, threatening to delay until April the submission of a turnaround plan in which it will ask for 1 trillion yen ($12 billion) in public

money.

The delay in selecting a new chief reflects huge hurdles in restoring the utility's profitability, including doubts over when and whether it

can restart its halted nuclear reactors and uncertainty over the future of Japan's atomic energy policy.

The selection of a new chairman is seen as one of the pillars of the plan, which will outline how Tepco aims to turnaround its business in

return for one of the biggest public bailouts outside the banking sector.

"Heading Tepco was difficult even before this problem (the disaster at the Fukushima plant) because of nuclear issues and anti-nuclear

movements," a banking source told Reuters this week.

"With issues such as nuclear power plants and electricity rate hikes, there aren't people who really want to take the job."

Tepco, which provides electricity to some 45 million people in the Tokyo area, is saddled with trillions of yen in compensation and clean-up

costs after a huge tsunami last March triggered a radiation disaster at its Fukushima nuclear plant.

To improve its profitability, Tepco is likely to include in the business scheme plans to restart halted nuclear reactors at its Kashiwazaki

Kariwa plant in the business year ending March 2014 and to hike electricity rates, according to sources.

But whether these factors, essential to improve profitability, can be implemented smoothly is unclear as local governments are voicing concerns

over reactor restarts and Tepco needs to win government approval to raise household rates.

"The intention is to come up with a business plan, but the murkiness cannot be wiped away with it," said Hirofumi Kawachi, a senior analyst at

Mizuho Investors Securities.

He added that a fuller picture of reactor restarts and Tepco's compensation responsibilities were key for a credible scheme.

DELAY IN TURNAROUND PLAN

Whoever takes the job over from the powerful current Tepco chairman Tsunehisa Katsumata, who became president in 2002 and chairman in 2008,

will not have a free hand as the government could have a strong say in the utility's management.

Trade Minister Yukio Edano, charged with approving the turnaround plan, wants the government to have a significant say in managing the company,

and he has been squabbling with Tepco over how big the government stake in the utility should be in return for a public fund injection.

Media reported this month that the government could take a majority stake in Tepco and obtain convertible non-voting shares which, if all are

converted, will give the government more than a two-thirds stake in the utility and allow it to decide on major management issues.

Several names have been floated as Katsumata's successor.

Among them were Yoshiyuki Kasai, the chairman of Central Japan Railway Co who experienced the privatisation of Japan National Railways about 25

years ago, as well as Akio Mimura, the chairman of Nippon Steel Corp, the world's No.4 steelmaker and the head of a government-backed experts'

panel discussing Japan's future energy balance.

But sources said that the decision has yet to be made and one banker said the personnel issue could be split from the business turnaround plan.

Edano, who oversees energy policy, hinted that the personnel decision could come later.

"It needs to be decided by the time of the shareholders' meeting (in June) at the latest," he said in a news conference this month.

Tepco, the bailout fund and politicians are widely seen to be involved in the search, though Edano said that legally he was not authorised to

pick the next chief.

"I understand well that personnel could be an issue in the plan and depending on the content, I may not approve ... unless they submit a plan

that takes this into consideration," he said on Tuesday.

The business turnaround plan had been expected for a submission to the trade minister by the end of March.

In addition to the 1 trillion yen in taxpayer's money, Tepco is also set to ask a government-backed bailout fund for 800 billion yen to

compensate victims of the nuclear disaster, a source close to the fund said.

A Tepco spokeswoman said that the firm still wanted to submit the turnaround plan this month, if possible.