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[SPEAKING JAPANESE]
[SPEAKING JAPANESE]
What's happened is that Toshiba has had to write off $6.3 billion because of problems at Westinghouse, which is their US nuclear unit. Toshiba bought that business from the British government back in 2006, and it's turned out to be a very, very bad deal for them. We still don't know exactly all of the details of what's gone wrong and why these big losses have built up, but it seems to be connected to contracts that Westinghouse has been working on in the United States.
And what seems to have happened is that the costs at those projects have ballooned. They've gone way over schedule. They're still not finished yet. They're still under construction. So essentially what they're saying is they don't want to be a lead contractor for managing new nuclear plants in this way anymore. They're going to pull out of that business. And so the immediate consequence has been that the chairman of the company, Shigenori Shiga, has resigned and is taking the blame for a lot of what has gone wrong at Westinghouse.
Longer-term, it's clear there are going to have to be very, very profound changes at Toshiba, really just to keep the company going. There's certainly concern about whether it can remain a going concern. And there's going to have to be a big restructuring. There's going to have to be disposals. There's a lot of talk about selling off its memory chip unit. It has very advanced, sophisticated flash memory business. A lot of people would certainly be interested in that.
I think ideally they'd like to sell the nuclear unit. But probably there's no buyers for that out there because that is a very, very difficult business to be in. It's lost a lot of money, and could potentially still lose quite a lot more. So they're probably looking to sell some of their better assets.
What this tells you, I think, is that the nuclear industry worldwide is a very, very difficult place to be in. Back 10 years ago, when Toshiba bought Westinghouse, there was a lot of talk about the nuclear renaissance. People thought that because of energy security needs, that because of concerns about oil and gas supplies dwindling, because of concerns about climate change and the need to cut carbon emissions, all those factors seemed to point very much in favour of new nuclear development.
Since then, we've had the shale revolution, so oil and gas supplies now seem a lot more abundant. We've had very steep falls in the prices of renewable energy sources, like wind and solar power. So nuclear power just doesn't seem as necessary now as it once did. It's always been a difficult business. It's always been susceptible to cost overruns. Now it seems to be even worse.
And I think what this is telling you is that for the private sector companies, for a company like Toshiba using private sector capital, investors money to invest in those kinds of projects, it's a very, very difficult and risky thing to do, and a lot of people are going to be unwilling to do that in future.
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