A blow to Britain's nuclear strategy

A blow to Britain's nuclear strategy

Tokyo - Hitachi said Thursday it would freeze construction of its stalled nuclear power station in Wales due to problems financing the project, a blow to Britain's nuclear strategy and a costly decision for the Japanese firm.

The company said in a statement the decision was made "from the viewpoint of Hitachi's economic rationality as a private enterprise".

Shelving the project at the Wylfa Newydd plant on Anglesey, a small island off the Welsh coast, will cost the Japanese firm 300 billion yen ($2.8 billion), it said.

Hitachi launched the planned construction after acquiring Britain-based Horizon Nuclear Power in 2012.

The British government had reportedly agreed to finance two thirds of the three trillion yen construction cost, with Hitachi as well as Japanese and British investors scheduled to cover the balance.

But Hitachi's fund-raising efforts have been deadlocked at home while its request for additional investment from the British government has been shelved with London consumed by Brexit.

"Unfortunately, despite the best efforts of everyone involved, the parties have not been able to reach an agreement to the satisfaction of all concerned," Hitachi said.

The Japanese firm added: "As a result, Hitachi has decided to suspend the project at this time... as it is now clear that further time is needed to develop a financial structure" for the project.

The halting of the project also deals a blow to Japan Inc's attempts to expand its nuclear power businesses overseas after the Fukushima disaster of March 2011 effectively halted demand for new reactors in Japan.

A massive tsunami triggered by a 9.0-magnitude earthquake in March 2011 overwhelmed reactor cooling systems at the Fukushima Daiichi plant in northeastern Japan.

It caused reactor meltdowns, releasing radiation in the most dangerous nuclear disaster since Chernobyl in 1986. The crisis spurred Japan to strengthen its safety regulations under a new Nuclear Regulation Authority watchdog. The accident also prompted nuclear power companies overseas to review their projects, a move that increased safety costs.

Toshiba has also been on the ropes after being forced to sell off its troubled US nuclear energy firm Westinghouse, which racked up billions of dollars in losses before being placed under bankruptcy protection. A Japanese-led consortium including Mitsubishi Heavy Industries was also scrapping a project in Turkey, local media said.

The setbacks have dealt a blow to Prime Minister Shinzo Abe's efforts to help Japan Inc export its infrastructure -- a key pillar of his business diplomacy.