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UNCLAS SECTION 01 OF 10 TOKYO 003491 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA; 
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION; 
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE; 
SECDEF FOR JCS-J-5/JAPAN, 
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA 
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR; 
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA. 
 
E.O. 12958: N/A 
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//06 
 
 
Index: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule 
 
Korean Peninsula issues: 
4) President Roh stresses need for ROK defense capability against 
Japan 
5) Taepodong-2 missile crisis could be prolonged 
6) NPA says must assume that Taepodong-2 missile might drop on Japan 
 
 
Defense and security issues: 
7) 50% of public positively evaluate USFJ realignment, 38% do not in 
Yomiuri poll 
8) Defense white paper for 2006 stresses concern about North Korean 
missiles, China's rapid military buildup 
9) LDP project team proposes Japanese-style CIA 
10) LDP team proposes Cabinet-level intelligence council 
 
Iraq contributions: 
11) Prime Minister Koizumi thanked by Iraq's prime minister for 
GSDF's contributions 
12) Chief Cabinet Secretary Abe lists three conditions for eventual 
pullout of ASDF in Iraq 
13) GSDF member who served in Iraq recounts lessons learned 
 
Foreign aid: 
14) LDP expenditures reform team seeks to trim ODA outlays by 100 
billion yen, cut 3 trillion yen from local public works projects 
15) Foreign Minister Aso says slicing ODA program violates Prime 
Minister Koizumi's international commitment 
 
Political agenda: 
16) Survey of 100 major companies shows preference for Yasuo Fukuda 
over Shinzo Abe as next prime minister 
17) New Komeito to speed up party convention to September, mindful 
of extra Diet session in fall, by-election 
18) Foreign Minister Aso stresses that prime ministerial visits to 
Yasukuni Shrine is a domestic issue 
 
19) Hitachi, GE to jointly build nuclear power plant in US, the 
first new facility in 30 years 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi, Mainichi, Yomiuri, Sankei & Tokyo Shimbun: 
16-year-old boy arrested on suspicion of arson and killing his 
mother, brother, sister 
 
Nihon Keizai: 
Hitachi, GE receive order for construction of nuclear plant in US; 
first construction in 30 years 
 
2) EDITORIALS 
 
Asahi: 
(1) Anniversary of the end of the battle of Okinawa: Remembering the 
tragedy and madness 
 
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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//06 
 
(2) Financial Affairs Agency: What action it will take after 
punishing one while giving a warning to hundreds? 
 
Mainichi: 
(1) Falsified quake-resistance data: Investigations do not ensure 
safety 
(2) Promotion of new entry into mail delivery service: Ideas 
necessary for maintenance of uniform services 
 
Yomiuri: 
(1) Mitsui Sumitomo Insurance: Fundamentals of insurance forgotten 
(2) Ruling on murder of mother and child: Special treatment for 
juvenile killer not permitted 
 
Nihon Keizai: 
(1) Taxi business needs to break away from trying to match supply 
and demand 
(2) Reliability of insurance wavering 
 
Sankei: 
(1) Punishment of Mitsui Sumitomo Insurance: Insurance sector needs 
to review its problems 
(2) Cloned human embryos: Difficulties must be overcome for 
regenerative medicine 
 
Tokyo Shimbun: 
(1) Mitsui Sumitomo Insurance: It's outrageous to disregard clients 
(2) Takamatsuzuka mural: Plan to dismantle stone chamber should be 
dropped 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, June 22 
 
NIHON KEIZAI (Page 2) (Full) 
June 23, 2006 
 
10:08 
Met at Kantei with Economy, Trade and Industry Minister Nikai, 
followed by Vice METI Minister Sugiyama, and Resources and Energy 
Agency Director General Kodaira. 
 
11:00 
Met LDP Secretary General Takebe. 
 
12:30 
Met over lunch with BOJ Governor Fukui, Vice Governor Iwata, Finance 
Minister Tanigaki, Economic and Fiscal Policy Minister Yosano, and 
Chief Cabinet Secretary Abe. 
 
14:29 
Met Administrative Reform Minister Chuma. 
 
15:00 
Met Ambassador to the US Kato, Deputy Foreign Minister Nishida and 
North American Affairs Bureau chief Kawai. 
 
16:04 
Met Rotary International President Stenhammar and others. 
 
16:33 
Attended a cabinet meeting. Afterward met Foreign Minister Aso, 
 
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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//06 
 
Tanigaki, Nikai, Agriculture, Forestry and Fisheries Minister 
Nakagawa, and others. 
 
17:33 
Attended a meeting of the Council on Economic and Fiscal Policy. 
 
18:55 
Received a telephone call from Iraqi Prime Minister Maliki in the 
presence of MOFA Middle Eastern and African Affairs Bureau chief 
Yoshikawa and Defense Agency Defense Operations Bureau chief 
Yamazaki. 
 
19:23 
Returned to his residence. 
 
4) Takeshima/Dokdo issue: ROK president emphasizes need for 
enhancement of defense capability, noting, "We need to ready 
ourselves for Japan's provocation" 
 
ASAHI (Page 7) (Full) 
June 23, 2006 
 
Tadahisa Takatsuki, Seoul 
 
During a meeting yesterday with senior officials of the National 
Maritime Police Agency and others, South Korean President Roh Moo 
Hyun emphasized the importance of improving his country's deterrent 
capability in preparation for a possible clash with Japan in waters 
around Takeshima, referring to his country's response to the 
sovereignty issue over Takeshima/Dokdo islets claimed by both Japan 
and South Korea. The president said: "I think it's important for us 
to have the defensive capability to make the other side think there 
would be more harm than benefit in taking a provocative act." 
 
According to Blue House officials, the president noted, "We have a 
strong enough defensive capability to make Japan give up on the idea 
of taking a provocative act," adding, "What I mean is not that we 
will build combat capability strong enough to defeat Japan, but we 
will instead build military strength strong enough to deal with an 
unforeseen incident in the East Sea (the Sea of Japan), and if 
things go beyond that, politics will handle them." 
 
5) Crisis over North Korea's Taepodong-2 could be protracted 
 
SANKEI (Page 2) (Excerpts) 
June 23, 2006 
 
Ruriko Kubota, Seoul 
 
Media have reported that North Korea is preparing to launch a 
long-range Taepodong-2 missile. Amid the United States refusing to 
hold bilateral talks with North Korea, it is feared that the 
"missile crisis" may be protracted, as Pyongyang has begun to send, 
though indirectly, a message that the missile launch may come in one 
month or in one year. The test-firing of a missile is North Korea's 
most effective diplomatic leverage toward the US. Some observers 
take the view that North Korea may not easily use its ace in the 
hole. 
 
Chosen Ilbo, the organ newspaper of the General Federation of Korean 
Residents in Japan (Chongryon), on June 21 carried an article 
titled, "The story of a Taepodong-2 test-firing is a US 
 
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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//06 
 
fabrication." The article stated: "The US and Japan fabricated the 
Taepodong story with the aim of winning over world opinion to their 
hostile feelings (toward North Korea)." The article claimed that 
what everyone is watching is actually the transport rocket 
Baekdusan-2 and the satellite Kwangmyongsong-2. It argued that North 
Korea, as an autonomous country that possesses satellites, "can 
launch them at any time, even one month or one year later," without 
interference from other countries. 
 
6) National Police Agency director general: Measures being worked 
out on assumption of missile debris falling on Japan 
 
SANKEI (Page 2) (Full) 
June 23, 2006 
 
In connection with media reports that North Korea could be ready to 
test-fire a ballistic missile, National Police Agency Director 
General Iwao Uruma said in a press conference yesterday: "We will 
hammer out response measures on the assumption of a worst case 
involving debris or a warhead falling on Japan." 
 
Uruma remarked: 
 
"If the warhead or debris falls on Japanese territory and damage is 
caused, we will engage in rescue operations. In the event of such 
pieces falling in the mountains, it will be necessary to check for 
nuclear, biological, or chemical reactions. We are working out 
countermeasures, assuming that that the missile-launch news could 
cause the public to panic." 
 
7) Poll: 50% appreciate USFJ realignment accord 
 
YOMIURI (Page 2) (Full) 
June 23, 2006 
 
An estimated 50% of the Japanese public positively evaluate the 
Japanese and US governments for reaching agreement to realign US 
forces in Japan, the Yomiuri Shimbun found from its recent 
face-to-face nationwide public opinion survey conducted June 17-18. 
Negative answers accounted for 38%. 
 
The agreed realignment of US forces in Japan includes relocating 
Futenma airfield in Okinawa Prefecture to another location in the 
prefecture and redeploying US Marine Corps troops from Okinawa to 
Guam. In the survey, respondents were asked if they thought these 
realignment steps would alleviate Okinawa's base-hosting burden. In 
response to this question, 52% answered "no," with 36% saying "yes." 
As seen from these figures, negative views outnumbered positive 
ones. 
 
In the realignment process, Japan will pay in part for the 
redeployment of US Marines to Guam. Japan will also build new 
facilities for US military use at its own expense. In the survey, 
respondents were asked if they thought the government has given 
sufficient explanation to the public about Japan's cost sharing. 
Those who picked "no" totaled 87%, showing that the general public 
does not feel the government has fulfilled its accountability. "Yes" 
accounted for only 8%. 
 
8) Defense white paper expresses concern about North Korean 
missiles, warns of China's military expansion 
 
 
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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//06 
 
NIOHN KEIZAI (Page 2) (Full) 
June 23, 2006 
 
The Defense Agency will publish its defense white paper for 2006 in 
July. According to the outline released yesterday, the white paper 
expresses concern about North Korea's nuclear and missile 
development programs. North Korea is reportedly making preparations 
to launch a Taepodong-2 long-range ballistic missile. The white 
paper also warns of China's increased defense spending and military 
modernization and calls for China to ensure transparency. In 
addition, it also stresses the importance of strengthening Japan's 
relations with India. 
 
The white paper has a new section about "strengthening Japan-US 
security arrangements" that is aimed at promoting the upholding of 
favorable Japan-US relations. In this section, the white paper 
underscores the significance of realigning US forces in Japan, 
specifying the planned relocation of Futenma airfield to a coastal 
area of Camp Schwab. With North Korea and the Taiwan Straits in 
mind, the white paper upholds "regional stability" and plays up the 
US military presence. In connection with a bill to upgrade the 
Defense Agency to the status of a ministry, the white paper says 
Japan will step up its readiness for emergencies and will make 
positive efforts to contribute to peace and stability in the 
international community. 
 
9) LDP team proposes establishment of Japanese-version of CIA to 
strengthen intelligence functions 
 
TOKYO SHIMBUN (Page 3) (Full) 
June 23, 2006 
 
The Liberal Democratic Party's study team on enhanced national 
intelligence functions, chaired by former Foreign Minister Nobutaka 
Machimura, produced a set of proposals yesterday calling for the 
establishment of an external intelligence body under the Cabinet 
Secretariat similar to America's Central Intelligence Agency (CIA) 
 
SIPDIS 
or Britain's Military Intelligence 6 (MI6). The team will make the 
proposal to the government shortly. 
 
Based on the slaying of Japanese nationals in Iraq, the suicide of a 
Japanese diplomat at the Consulate General in Shanghai, and other 
incidents, the proposal says: "Japan's intelligence functions are 
weak and insufficient. Enhancing external intelligence functions is 
imperative." 
 
Aimed at building cooperative relations with foreign intelligence 
organizations, such as the CIA, the proposal calls for raising the 
status of the cabinet intelligence director to the level of the 
deputy chief cabinet secretary to place the new organ under him. 
Personnel form the Foreign Ministry, Cabinet Intelligence and 
Research Office, National Police Agency, and Defense Agency will be 
fostered into a group of intelligence experts. The proposal also 
calls for improving the law to establish the post of intelligence 
assistance to comprehensively evaluate intelligence under the 
cabinet intelligence director and to mandate the personnel to keep 
national secrets. 
 
10) LDP proposes setting up cabinet-level intelligence council, 
training counterintelligence professionals 
 
YOMIURI (Page 2) (Full) 
 
TOKYO 00003491  006 OF 010 
 
SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//06 
 
June 23, 2006 
 
The ruling Liberal Democratic Party yesterday held a meeting of its 
study group on Japan's consolidation of its intelligence functions. 
The study group, with former Foreign Minister Nobutaka Machimura 
presiding, worked out a report of recommendations featuring 
proposals to set up a cabinet-level intelligence council, which will 
set the direction for intelligence-gathering, and to establish an 
external intelligence service in the Cabinet Information Research 
Office. The report suggests the need for the proposed external 
intelligence service to be staffed with trained experts on 
counterintelligence and counterterrorism. The LDP will call on Prime 
Minister Koizumi and his successor to translate the recommendations 
into action. 
 
In addition, the report proposes upgrading the cabinet information 
officer, who heads the CIRO, to the status of a deputy chief cabinet 
secretary. The report also calls for the CIRO to have information 
 
SIPDIS 
assistant officers from other government offices and private circles 
collect and analyze information. In addition, the report proposes 
setting up an intelligence committee in both Diet chambers to 
oversee government intelligence activities. Committee members are 
required to protect secrets. 
 
Main points from LDP proposals 
 
-- Set up a cabinet-level intelligence council, including the prime 
minister, the foreign minister, the Defense Agency director general, 
and the Public Security Investigation Agency director general. 
-- Upgrade the Cabinet Information Officer to the status of a deputy 
chief cabinet secretary. The CIO briefs the prime minister and the 
chief cabinet secretary on intelligence-gathering activities. 
-- Set up an external intelligence service, which is to be staffed 
with trained experts, under the CIO. 
-- Create a common set of information security guidelines for all 
government ministries and agencies and establish a law requiring 
confidentiality. 
 
SIPDIS 
 
11) In teleconference, Iraqi prime minister expresses gratitude to 
Prime Minister Koizumi for GSDF reconstruction assistance 
 
MAINICHI (Page 3) (Full) 
June 23, 2006 
 
Prime Minister Junichiro Koizumi yesterday talked on the phone with 
Iraqi Prime Minister Maliki. Maliki expressed gratitude for Japan's 
reconstruction assistance via its Ground Self-Defense Force (GSDF) 
troops, whose pullout from Iraq has been decided on. Maliki noted, 
"They have left the Iraqi people with a good impression of Japan," 
adding, "I hope the two countries will now strengthen relations in 
the political, economic, and particularly investment areas, in 
addition to reconstruction." 
 
In response, Koizumi emphasized, "I'd like to continue assistance in 
a way in which the Iraqi people will appreciate that Japan helped 
Iraq during a difficult time via airlifting by the Air Self-Defense 
Force." Koizumi invited Maliki to visit Japan. 
 
12) Abe lays down three conditions for timing of ASDF withdrawal 
from Iraq 
 
ASAHI (Page 4) (Full) 
 
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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//06 
 
June 23, 2006 
 
Chief Cabinet Secretary Shinzo Abe yesterday made this remark about 
the timing of the withdrawal from Iraq of the Air Self-Defense Force 
(ASDF), which will expand its airlift operations in that country 
following the pullout of the Ground Self-Defense Force (GSDF): "We 
would like to properly judge and then decide based on such 
conditions: the state of public security, the situation involving 
the multinational force's efforts; and the situation involving the 
country's reconstruction. He indicated that in his view three of the 
four conditions applied to the GSDF's withdrawal applied to the 
ASDF's pullout, the fourth condition being progress in the political 
process (which has already happened).  He was replying to a question 
from Minshuto (Democratic Party of Japan) lawmaker Kazunori Yamai in 
closed session of the Lower House Iraq Reconstruction Assistance 
Special Committee. 
 
13) GSDF's Iraq mission of two years and a half: Interviews with 
returned senior GSDF officers 
 
ASAHI (Page 37) (Abridged) 
June 23, 2006 
 
The Japanese government has sent a total of 5,500 Ground 
Self-Defense Force troops to the southern Iraqi city of Samawah on 
their mission in Iraq that lasted two years and a half.  What the 
SDF troops experienced and learned from the country's first dispatch 
of troops to a country in combat? Should Japan continue such an 
overseas mission? The Asahi Shimbun asked returned senior GSDF 
officials and others about their experiences in Iraq. 
 
Colonel Masato Taura served as the leader of the second 
reconstruction support team in Samawah for seven months from August 
2004 through January 2005. Sovereignty was transferred to the 
provisional Iraqi administration in June 2004. Battles between US 
forces and Islamic Shiite militants were intensifying in Najaf in 
August. During Taura's mission in Samawah, there were seven attacks 
on the GSDF camp. A shell penetrated a storage container once. 
 
One of the major duties was to negotiate with regional and tribal 
chiefs to fairly allot school and road repair work. Taura often 
presented pictures to explain priority projects, but regional chiefs 
always insisted that their communities should take precedence. 
 
It was not clear if attacks on the GSDF camp were directly connected 
to local discontent. But the day after an attack, a local came over 
to the camp to offer his assistance to protect the camp. But as the 
GSDF turned down the offer, the man simply left the camp, sneering. 
It remains unknown if he was the one who actually fired a shell at 
the GSDF camp. The GSDF contingent called it the "shell-firing 
business." 
 
Taura had to discuss projects with people of different culture amid 
the roar of artillery.  What he experienced in Samawah was 
completely different from that of peacekeeping operations under the 
United Nations. 
 
He has also acquired the proper skills to handle weapons. It is 
critical to determine the right timing to shoot at an armed militant 
approaching. Taura said: "We cannot learn the right timing from 
papers alone. The contingent was composed of troops from across 
Japan and standards were established training, and that's our 
 
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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//06 
 
asset." 
 
Japanese troops have not fired at anyone. But should Japan continue 
sending troops to areas involving great risks. Taura simply said: 
"As an SDF officer, I cannot discuss that. We must be ready for 
anything in compliance with the government's order." 
 
Colonel Yuki Imaura stayed in Samawah between June and August 2004 
as the leader of the second reconstruction support group. During 
that period, grenades landed in the GSDF camp on four occasions. 
 
Imaura noted: "The Iraq mission has opened a new door for the SDF. 
What we experienced in Iraq gives us confidence." 
 
14) LDP reform panel proposes slashing spending on local public 
works projects by 3 trillion yen, ODA outlays by 100 billion yen 
 
YOMIURI (Page 2) (Full) 
June 23, 2006 
 
The Liberal Democratic Party's Expenditure Reform Project Team 
started arrangements yesterday to cut the government's disbursements 
to local governments for their independent projects by 3 trillion 
yen over the five years until FY2011. In FY2006, about 23.6 trillion 
yen has been set aside for local independent projects based on local 
fiscal plans, so outlays for local projects will be reduced by 13% 
over five years. The amount of tax subsidies allocated to local 
governments in FY2011 will be set at the same level as in FY2006. 
 
In the FY2006 budget, about 760 billion yen has been earmarked for 
official development assistance (ODA). The LDP panel also plans to 
trim the ODA budget by about 100 billion yen over five years, with 
about a 2.8% annual drop. The average margin of reduction in the ODA 
budget over the past five years was 5.6%. This fiscal year's drop is 
half that. 
 
In a press conference yesterday, Foreign Minister Aso rapped the LDP 
panel's proposal, saying: "Setting negative growth for the ODA 
budget over the coming five years goes against the international 
pledge made by the prime minister." 
 
Financial aid to private educational institutions totals about 435 
billion yen in the FY2006 budget. The LDP panel proposes a 1% yearly 
cut in the budget. 
 
15) ODA cut plan runs contrary to the prime minister's pledge, 
cautions Foreign Minister Aso 
 
TOKYO SHIMBUN (Page 2) (Full) 
June 23, 2006 
 
The Liberal Democratic Party's (LDP) Expenditure Reform Project Team 
is now looking into the possibility of cutting the government's 
official development assistance (ODA) budget. Commenting on the 
move, Foreign Minister Taro Aso during yesterday's press briefing 
called for a cautious approach, noting: "Prime Minister Koizumi has 
pledged to increase Japan's ODA by 10 billion dollars over five 
years and double the amount provided to Africa over three years. If 
Japan cuts the ODA budget, it would be sending a message contrary to 
what has been pledged." 
 
16) Asahi survey of 100 major companies finds Fukuda favored over 
 
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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06//06 
 
Abe for the next prime minister; Major companies: 15 to 12; regional 
business leaders: 22 to 17 
 
ASAHI (Page 1) (Excerpt) 
June 23, 2006 
 
In a questionnaire sent by the Asahi Shimbun to the top officers of 
100 major companies across the nation, one of the questions asked 
was whom did they think was the appropriate person to be prime 
minister after Junichiro Koizumi. Out of the 31 companies that put 
down a specific name, 15 favored former Chief Cabinet Secretary 
Yasuo Fukuda and 12 opted for current Chief Cabinet Secretary Shinzo 
Abe. In a parallel survey sent to the leadership of 94 business 
associations, such as the chambers of commerce in 47 prefectures and 
regional financial institutions, of the 50 that put down a specific 
name, 22 chose Fukuda and 17 picked Abe. 
 
Although many companies and organizations avoided picking a specific 
name, it was clear that business circles have a strong preference 
for Fukuda, despite the high rate of public preference for Abe in 
opinion polls. The survey of 100 companies was carried out during 
June 1-16, and the regional survey during June 1-20. 
 
17) New Komeito to speed up party convention to September to start 
new leadership early with eye on extraordinary Diet session, 
by-election 
 
ASAHI (Page 4) (Excerpt) 
June 23, 2006 
 
The New Komeito at a meeting of party central executives decided to 
speed up the timing of its party convention that occurs once every 
two years to September instead of the originally scheduled October 
¶14. It was judged a wise policy to allow its new executive lineup an 
early start given the high probability that an extraordinary Diet 
session will be convened at the end of September in order to deal 
with the many important bills now under continuing deliberation. In 
addition, a unified by-election will be proclaimed on October 10. 
 
18) Prime minister's Yasukuni visits are domestic affair, says 
Foreign Minister Aso 
 
TOKYO SHIMBUN (Page 2) (Full) 
June 23, 2006 
 
Foreign Minister Taro Aso yesterday gave a speech at the Asia 
Strategy Study Council led by the Niwa-Koga faction, Tanigaki 
faction and former Kono faction. Commenting on the prime minister's 
visits to Yasukuni Shrine, Aso noted: "The prime minister's Yasukuni 
visits are a domestic affair. I do not think that they are an 
international issue. I told the same thing to China." He thus 
stressed his thinking that the Yasukuni issue should not be made a 
diplomatic issue. 
 
He underscored that Japan-China relations are improving, noting: "I 
suggested a meeting to Foreign Minister Li Zhaoxing. He immediately 
agreed to do so. We will meet again next month." He took an 
optimistic outlook: "Since the bilateral relationship has become 
complicated over the past several years, it cannot be repaired 
immediately. However, exchange is making progress. The tensions will 
disappear over the mid-to long-term." 
 
 
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19) Hitachi, GE receive order to construct nuclear power plants in 
US; First such project in 30 years; Operation to start in 2014; 
Project to cost 600 billion yen 
 
NIHON KEIZAI (Top Play) (Excerpts) 
June 23, 2006 
 
Hitachi will construct nuclear plants in Texas in cooperation with 
General Electric. The total project cost will amount to 5.2 billion 
dollars (approximately 600 billion yen). Construction work will 
likely start in 2009 and operation in 2014. Amid the prospects for 
an expansion of the nuclear power plant market due to the rise in 
crude oil prices and a subsequent trend toward revising energy 
policy, Toshiba purchased Westinghouse, a leading US nuclear energy 
company. Hitachi has strengthened ties with GE to go on the 
offensive in the global energy market. 
 
Since the Three Mile Island accident in 1979, no nuclear power 
plants have been built in the US. The one planned for Texas is going 
to be the first of a series, following construction authorization 
after a hiatus of 30 years. 
 
Hitachi and GE will receive an order for the construction of two 
plants, which NRG Energy, a leading US power generating and 
wholesaling company, plans to build in a suburb of Houston, Texas. 
On June 19, NRG Energy formally conveyed its plan to build nuclear 
power plants to the Nuclear Power Regulatory Commission, which is in 
charge of setting US nuclear power policy. On receiving an 
application for the construction of such plants with a detailed plan 
next year, the panel will screen the safety and feasibility of the 
project. 
 
The plants are a modified version of the boiling water reactor 
(BWR). Hitachi has a track record of having built seven units of 
this type of reactor (including one now under construction) in 
Japan, etc. Its power output per unit is 1.35 million kilowatts. 
Hitachi has informally received an order from NRG Energy. A formal 
signing of a contract for the project will likely take place next 
year. 
 
The two companies will work out their respective roles. Hitachi will 
be responsible for manufacturing and installing reactor vessels and 
steam turbines, the main equipment of the nuclear power plant. Since 
GE has become a service and engineering company in the nuclear 
energy business, it is expected to be responsible for negotiations 
with the government to obtain authorization for the project and for 
procuring fuel. Hitachi has supplied equipment to GE in the past, 
but those projects were carried out under the leadership of GE in 
terms of receiving orders and constructing plants. Hitachi has 
constructed a total of 23 nuclear power plants in Japan and Taiwan. 
It has a sales record of 200 billion yen a year in the 
nuclear-energy-related business. 
 
SCHIEFFER