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Report From Tokyo: Left Holding the Bag

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Each week that passes here brings new revelations about the unstable nature of the nuclear facility at Fukushima as a result of the earthquake and tsunami on March 11th. Most recently, it has been confirmed by Tokyo Electric Power (TEPCO) that units #1, #2 and #3 at the Daiichi Fukushima plant all have substantial contaminated water in the basements of each reactor building, reinforcing the suspicion that the containment vessels are damaged as they are not holding the water. This creates additional challenges for TEPCO as it tries to set up a continuous cooling system that will eliminate the threat of radiation leaks into the environment.

It is exactly such leaks that pose a continuing and growing threat to the environment in and around the Daiichi Fukushima plant. On May 17th, Greenpeace announced that several types of seaweed ready for harvest from the ocean show radiation levels over 10,000 Becquerel per kilogram -- the upper limit of what their equipment can detect and well-above safety limits for consumption. They are testing the water as well as marine life and results are expected to be announced this coming week.

I have noted in recent postings that the threat to the food chain continues to be of great concern. On 19th May, it was announced that minute amounts of radioactive substances were found in the breast milk of five women in Tokyo and two other prefectures. Of samples taken from 41 women in five prefectures, radioactive iodine was detected in the breast milk of a woman in Fukushima Prefecture, and cesium in four others in Tokyo, Fukushima and Ibaraki. To make matters worse, Japan has still not set safety levels for radioactive substances in breast milk.

This is yet another sign that decision-makers in charge of the crisis continue to create solutions as they go along. While no one can plan for every single possibility in a crisis, it is clear that holes not only exist in the reactors at Fukushima but also in plans to bring the crisis under control.

But at least there is a plan.

Japan has announced a blueprint to deal with the Fukushima nuclear power plant accident. The nine-month plan is the first attempt by the government to map out a time frame for the immense recovery operation. Among the necessary measures are the disposal of radioactive soil and payment of compensation to people in the area affected by the accident, including the nearly 80,000 forced to evacuate.

This brings up the issue of who is left holding the bag for the many costs associated with decontamination of the plant and surrounding facilities as well as rebuilding the dozens of communities wiped out by the tsunami. The amounts are staggering. Bank of America Corp.'s Merrill Lynch estimates TEPCO may face claims of 11 trillion yen ($136 billion). Even if TEPCO sells assets, the tax payers will be the ones responsible in the end. And costs will surely rise.

People here are already hearing talk of doubling the cost of electricity bills as well as raising the consumption tax from the current level of 5% to as high as 20%. If that happens, consumption will surely plunge which will lead to discussions about raising income taxes. And so it goes.

David Wagner is Director of Crisis Communications for Country Risk Solutions, a political risk consulting firm based in Connecticut. He has lived and worked in Japan for 25 years.