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Quick jump to below stories:
Run over: Delphi may cost GM $11B
Big oil getting desperate: Making oil with nuclear energy
Rita and Katrina knock more than £400m off BP's third-quarter profit
RBA warns of 'meltdown'
US warns millions in aid at risk if Nicaragua ousts president
Flood relief efforts hit problems

Run over: Delphi may cost GM $11B

Automaker owes union members at former unit; newspaper says plant closings, job cuts coming.

October 10, 2005: 7:58 AM EDT

In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.

NEW YORK , (CNN/Money) - The bankruptcy by auto parts maker Delphi Corp. could mean an $11 billion hit to its former parent General Motors Corp., according to the automaker, and thousands of job cuts at Delphi's North American parts plants.

GM (Research) issued a statement late Saturday estimating its liabilities from the Delphi (Research) bankruptcy filing at as much as $11 billion, due to contract obligations to United Auto Workers members at its former parts unit. That's because the bankruptcy came less than eight years after GM spun off Delphi in 1999.

Still, GM spokeswoman Toni Simonetti told the Detroit News Sunday that the $11 billion figure was a "worst-case scenario."

But GM said it could also see some advantages, as it estimated it is paying Delphi, its largest supplier of parts, a premium of $2 billion annually for those parts above market prices.

"GM believes that a restructuring of Delphi through the Chapter 11 process provides it with an opportunity to reduce or eliminate that purchase price premium, over time, as well as improve the quality of systems, components and parts it procures," GM said in its statement.

Even though the bankruptcy filing was long threatened by Delphi management, the news of the action, and the estimates from GM about liability, sent shares of GM down 3.5 percent in Frankfurt trading early Monday.

Plant closings, sales planned

Meanwhile, Delphi CEO Robert "Steve" Miller told the Wall Street Journal that Delphi's troubles would require the company to divest, consolidate or close "a substantial segment" of its 45 manufacturing sites in the U.S. and Canada, which employ 49,000 workers.

But he also told the paper he was not sure if the company would ask the U.S. government to take over its pension obligations.

"We have not decided what we will do" with the Delphi pension plan, Miller told the paper.

"We want to try and create a company that accommodates our retirees without having (the pension plan) terminated and turned over" to the government's Pension Benefit Guaranty Corp., he said. The company plan is underfunded by as much as $4.3 billion.

Miller, a 63-year-old turnaround specialist, led Bethlehem Steel Corp. through bankruptcy and handed that company's pension plan to the PBGC, the paper reported.

The filing Saturday came after Miller failed to negotiate a multibillion-dollar bailout plan with GM, Delphi's largest customer, and major wage-and-benefit concessions from the United Auto Workers union.

He said he also plans to renegotiate the contracts and retirement plans of Delphi's 33,000 union workers and 12,000 retirees, the paper reported.

In its filing, Troy, Mich.-based Delphi did not detail which or how many U.S. plants it hopes to get rid of. The company previously identified 11 U.S. plants that were unprofitable and could be closed or sold. (Full story).

The filing in bankruptcy court is the latest sign that the U.S. auto industry's unionized workers face the painful restructuring efforts forced on airline and steel workers amid bankruptcies in those industries, the Journal reported.

The filing also could disrupt the flow of auto parts, force major concessions on the UAW and load more costs on cash-strapped auto makers.

Analysts estimated GM's obligation for retiree benefits at somewhere between $1.6 billion and $6.6 billion. The company's tab for retiree pensions could run another $3 billion to $4.5 billion if Delphi terminates its plan, the Journal said.

UAW President Ron Gettelfinger in a statement called the filing a "bitter pill" and criticized Delphi for sweetening the severance packages of 21 top executives the day before seeking bankruptcy protection.

Delphi announced this past weekend that it is moving John Sheehan from chief operating officer to chief restructuring officer. Robert Dellinger will become chief financial officer, effective immediately.

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Big oil getting desperate: Making oil with nuclear energy

by Jerome a Paris
Thu Sep 22, 2005 at 03:39:58 PM PDT

In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.

Total May Use Atomic Power At Oil-Sand Project (WSJ, behind subscription wall)

PARIS -- French oil giant Total SA, amid rising oil and natural-gas prices, is considering building a nuclear power plant to extract ultraheavy oil from the vast oil-sand fields of western Canada.

This comes as oil prices -- driven even higher by Hurricane Katrina and now the threat of Hurricane Rita -- are removing lingering doubts about the long-term profitability of extracting the molasseslike form of oil from sand, despite the fact that the output is much more expensive to produce and to upgrade than is conventional crude.

At the same time, prices of natural gas -- which oil-sands producers have relied on to produce the steam and electricity needed to push the viscous oil out of the ground -- have risen 45% in the past year. That is prompting Total, which holds permits on large fields in Alberta that contain oil sands, to consider building its own nuclear plant and using the energy produced to get the job done.

This is interesting for two things: the global comeback of nuclear energy, and the staggering investments required to develop the Canadian oil sands. Neither are a sign that we are about to get back to an era of cheap energy...

Total's interest is the latest sign that nuclear energy is making a global comeback. Finland commissioned a new reactor in 2003, the first such order in Western Europe in 13 years. France has chosen a site in Normandy where a reactor will be built. The U.S. hasn't commissioned a new nuclear plant for three decades, but the industry is talking seriously about a revival, encouraged by the Bush administration and the rising cost of fossil fuel.


Total is relying on Areva SA, the French state-run nuclear engineering company, to define what type of reactor might suit its needs in Canada. Research is focusing on a dedicated reactor significantly smaller than those used by utility companies to produce electricity for large city grids.

Areva said discussions with Total are centering on a new type of reactor, known as a High Temperature Reactor, with a capacity of around 500 megawatts, about a third of the size of a traditional reactor. Areva also has been approached by other oil companies but discussions are most advanced with Total, Jean-Jacques Gautrot, Areva's director for international operations and marketing, said.

Areva, the French builder of nuclear plants (and the main contractor for the new Finnish plant), has recently signed an agreement with Constellation energy to prepare the ground to build new nuclear reactors in the US. It is also bidding for new nuclear tranches in China.

I wrote most of what I know about nuclear energy in this diary: Nuclear energy in France - a Sunday special, which describes how the industry is run in France, how waste is stored (and how it will be stored for the long run), and how costs are accounted for. I am certainly not trying to sell nuclear as a cure all on the energy front, but it is certainly better than coal for baseload (still the main source of electricity in the US, UK and Germany) and it is mostly carbon-free and, when well-run like in France, very cheap. Against that, you have the (manageable) problem of storing dangerous waste for long periods of time, the (small but uninsurable) risk of a major accident, and the high upfront cost (in money and energy) of the initial investment. On balance, nuclear should remain part of our energy supply - but just a part, and mostly as a preference to coal-fired plants.

But back to the oil sands:

In Canada, Total holds half of an oil-sands permit in Alberta and has secured more heavy-oil acreage with the purchase of Deer Creek Energy Ltd., located in the same western province. Total said it plans to invest $7 billion in Deer Creek, on top of the $1.4 billion it expects to pay for the company. The company says it could one day produce 200,000 barrels of heavy crude a day, close to 8% of Total's current global output.

Canada 's oil sands contain 174 billion barrels of recoverable reserves, the world's second-largest oil resource behind those of Saudi Arabia, according to Canadian government estimates.

Oil sands, a mixture of grit and a tarlike grade of crude oil known as bitumen, were discovered more than a century ago but have been considered economical to produce only in recent years as the price of oil has surged. In addition to nuclear power, producers are considering burning oil-sands residue and coal as alternatives to natural gas to make the steam needed for extraction.

Mr. Darricarrère said a nuclear power plant would help Total comply with tougher constraints on carbon dioxide and other so-called greenhouse-gas emissions. Although they generate toxic, radioactive waste, nuclear reactors don't emit greenhouse gases that scientists believe contribute to global warming.

Hidden behind these paragraphs are two things:

  • getting oil sands into something usable is a very messy process, which requires a lot of industrial treatment of the oil sands, and a lot of energy. So you need oil sands AND natural gas or some other power source to make oil, which, as energy prices increase, will make the resulting oil quite expensive...
  • as the numbers above show, this is an amazingly expensive effort. Consider that Total says it will spend about 8 billion $ to build a 200,000 b/d capacity - worth about 2 billion dollars per year at current prices, but equivalent to 1% of US daily consumption - and imagine how much more will need to be spent to get to volumes able to service America's insatiable thirst for oil... The graph also shows that oil sand production in Canada is not expected to reach significant volumes in the next 10-15 years, reaching barely 3-4% of world production (and less than a third of current US imports), so it will not be enough on its own to significantly modify the global oil balance. It will certainly create few more fortunes in Alberta, and lots of prosperity around Calgary, but it won't solve the looming oil crisis.

A spokesman for Imperial Oil Ltd. of Canada, an affiliate of Exxon Mobil Corp., which operates some of the world's largest oil-sands operations, said it looked into the nuclear option in the past but didn't pursue it because of cost and technology challenges.

Shell Canada Ltd. said it isn't considering nuclear power as part of its oil-sands plans. Rather, the company said it is looking into the possibility of turning asphaltene, very heavy oil, into gas to save on its natural-gas bill.

So there is still abundant skepticism in the industry. Most of all, this shows the desperation of the industry in the face of dwindling reserves, lack of access to the countries that still have some oil, and the increasing cost of production of new volumes of oil.

Those that say that oil will come back to 40$/barrel or less are either lying to us, hopelessly naive, or unaware of these worrying trends. The Financial Times published an article (Storm over the oil industry (behing sub wall) that came out just during Katrina and which I did not find an opportunity to comment upon then)

The issue of costs might not get much attention as hurricanes, terrorist threats to oil production, the dwindling spare capacity of oil in Saudi Arabia and the insatiable thirst for energy in China and the US. But cost inflation is being viewed as a significant reason why oil prices are so high and a sign that they will remain so for some years to come. Sanford Bernstein expects the cost of producing a single barrel of oil to increase by 9 per cent a year, from about $22 a barrel this year to $36 in 2010, and the cost of finding and producing the so-called marginal barrel - beyond which the activity becomes unprofitable - will double to $60 over the same period. Uncertainty about how much new projects will cost also prompted Goldman Sachs this month to raise its prediction of the long-term oil price from $45 a barrel to $60.

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Rita and Katrina knock more than £400m off BP's third-quarter profit

· Oil company's output falls by 145,000 barrels a day

· Bill for lost production and repairs could total $1.7bn

Terry Macalister
Wednesday October 5, 2005

In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.

Hurricanes Katrina and Rita will blow a $700m (£400m) hole in BP third-quarter profits and have knocked the world's second largest stock-listed oil company off course from its annual production targets.

A trading statement ahead of its official results revealed BP had lost 145,000 barrels of oil equivalents per day (boepd) over the three months to end September.

The figure could rise to 175,000 during the fourth quarter and impact on the first three months of 2006, leaving the total damage of lost production and repairs at almost $1.7bn. Shares in BP fell 2.5% to 656p as the City reeled at the scale of the financial damage caused by the storms that hit the US Gulf coast last month. Investment bank Goldman Sachs had predicted that third-quarter oil and gas production would average 4bn barrels of oil equivalents a day but BP reported a figure of 3.8bn after losing 145,000 barrels.

The oil company also lost output as a result of planned maintenance in the UK North Sea and elsewhere as well as a lower percentage from production-sharing contracts due to higher crude prices. Like other companies BP signs contracts with host governments that dictate a rate of financial return. When prices are high, BP has to reduce the amount of oil it can take from a particular field.

In February BP chief executive Lord Browne predicted his company would produce between 4.1m to 4.2m barrels of oil equivalents a day but admitted this would only be achieved "adjusting for the impact of Hurricanes Katrina and Rita and the impact of higher prices on production sharing contracts". As for the effect of the storms on profits, BP "estimates that the impact ... on third-quarter replacement cost profit before interest and tax will be in excess of $700m", as a result of disruption, clean-up and repairs. There would be an additional $100m worth of costs resulting from the repairs needed to the Thunder Horse production platform in the US Gulf following the passing of Hurricane Dennis.

Although the financial damage is considerable, it is easily manageable for a company with expected 2005 profits of more than $20bn, analysts said. Bruce Evers from Investec Securities said the impact of the storms was heavier than he had expected. "It's a big number but you have to remember that BP is a very big company." Mr Evers said BP figures indicated that up to 175,000 barrels of oil equivalents a day could be lost in the fourth quarter with a possible 50,000 in the first three months of 2006.

BP confirmed this while warning: "The figures for the third quarter will not be finalised completely until October 25 [the date the third-quarter financial results will be released] therefore it is too early to say exactly what the fourth quarter will look like," a spokeswoman said.

Mr Evers said it was hard to estimate exactly what the total financial damage to the company would be owing to volatility in the oil markets which would affect future marketing costs. Investec said it would be revising downwards its 2005 annual profit estimates from the current $22.3bn, which compares with actual earnings of $16.4bn in 2004.

Goldman Sachs was disappointed both by the impact of hurricanes and "significantly weaker" than expected performance in marketing. It is cutting third-quarter earnings by $1.1bn to reflect the trading update and 2005 earnings a share estimates by 7% to $1.12.

Goldman Sachs argues that these disappointments should be put in context of an oil environment "better than it has ever been" and point out that earnings per share will have risen 50% year on year after the downgrades. Earnings will benefit from a sharp rise in global crude prices during the third quarter - compared with the previous one - although BP admitted its own realisations lagged behind the $10 per barrel rise in Brent blend.

The company said its refining business would record another strong performance with margins up by $2 a barrel. Prices rose partly on the back of refinery closures caused by the hurricanes but BP also saw reduced output from its Texas City plant, which has been hit by an explosion.

Those wholesale price increases affected the marketing and retail petrol side of the business, driving down margins in the third quarter over the second one. "The overall marketing result [is] expected to be negative," said BP.

Guardian Unlimited © Guardian Newspapers Limited 2005

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RBA warns of 'meltdown'

By David Uren
The Australian,10119,16731131,00.html

In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.

The RBA has warned the rise in house prices and shares and high personal debt might be sowing the seeds for future problems.

Further rises in oil prices, the collapse of a major bank or an unexpected jump in inflation could be all it takes to send the increasingly fragile global financial system into meltdown.

The Reserve Bank of Australia warned yesterday that the current calm in financial markets could be the prelude to a storm that could wreak havoc in the world economy.

The RBA believes the boom in markets for shares, bonds and housing in many countries is unsustainable.

The warning came as share prices in Australia reached a new high point, while a rush to invest in Australian bonds is pushing down long-term interest rates.

"The preconditions are in place for quite abrupt swings in sentiment and a disruptive snap-back in pricing," the central bank said in its latest review of the health of the financial system.

The Australian share market soared yesterday, with the benchmark All Ordinaries index rising 51.3 points to a record 4565.3.

The share market has risen by more than 12.5 per cent in the past four months.

And the RBA says a key measure of all the world's share markets is now 62 per cent higher than its 2003 nadir, with the biggest gains made in the riskiest markets.

The bank says that financial markets have been acting on a belief that there will be no sharp changes in interest rates around the world. This has resulted in huge investments in government bonds.

In Australia, the long-term interest rate, which is set by the 10-year government bond rate, has been below the cash rate set by the RBA since March.

The belief that rates will remain stable has made investors more willing to borrow to buy shares and bonds.

And with long-term interest rates at historically low levels, investors in international financial markets -- such as insurance companies, banks and superannuation funds -- have been seeking out riskier assets that pay higher returns.

The trend for people to borrow more heavily than before has extended to housing markets, which are still booming in many countries around the world.

"The concern is that the increase in prices and leverage across a range of asset markets might be sowing the seeds for future problems," the RBA says.

"In many markets, there seems to be considerably more scope for asset prices to fall than to increase."

The Reserve Bank says the sooner the correction occurs, the better, as the magnitude of the shock is likely to increase if the boom continues for a few more years.

It says world markets could be sent plunging by a general reassessment of risk in world financial markets.

The possible triggers for such a reassessment include a further increase in oil prices, which hit a record above $US70 a barrel this month, the default of a big borrower such as a bank, or an unexpected rise in inflation.

The RBA believes the risks of Australia's housing downturn triggering a recession have receded, although it warns that the risks have not entirely disappeared.

"The high levels of household debt make the household sector vulnerable to a change in the generally favourable economic and financial climate," the bank says.

Although housing prices levelled out over the past year, it says, home owners are still increasing their debts.

Household interest payments are now equivalent to a record 9.8 per cent of household disposable income.

"Those with the highest debt-servicing burdens, or the smallest buffers on which to fall back in adverse circumstances, are often those that have taken out loans only recently, as well as lower-income households and investors," the bank says.

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[FTW has been aware for some time that many who understand the pending Peak Oil crisis have been looking to relocate to warmer climates with lower population densities in Central America. Costa Rica and Panama have been prime choices and good ones. But a recent uptick in real estate prices in those counties has encouraged interest in other Central American countries including Nicaragua. As I have said for years, six and a half billion people cannot move to the beach in Costa Rica. Nicaragua, however, poses risks not described in some investment brochures. The first is pending political instability that may spread regionally if the global economy continues its meltdown and if a Sandinista government is returned to power. A second (probably more serious) risk is that Nicaragua is seeing rapidly-rising fuel costs as the IMF is brutally trying to impose further austerity measures on a country whose population is already poor. Nicaragua’s foreign exchange (forex) reserves don’t suggest it would be able to compete long if oil prices continue to rise, as the IMF continues to clamp down on the poor.

There have already been two national casualties as a result of Peak Oil. The first, clearly, has been Zimbabwe which, as a result of near-zero forex reserves has collapsed utterly and is now resurrecting coal-fired locomotives as the only transportation available in a country that has otherwise been reduced to animal-powered transportation in its capital city, Harare. Zimbabwe, as a nation, is toast. No new capital will enter that country; it can no longer produce or export much of anything and its complete decline into the Stone Age is guaranteed.

The second casualty is once-mighty Indonesia, a founding member of OPEC which has entered steep oil-production decline and become a net oil importer. It was recently forced to drop fuel subsidies for its population as a result of rising costs or else see the government go bankrupt. A recent overnight jump of over 160% in fuel costs (especially for cooking) prompted massive civil unrest. (Fuel riots are actually looming and being prepared for in Great Britain). Nicaragua is now standing in line on the list of nations poised to go over the Peak Oil cliff and the question then is, will a collapse there spread to other neighboring countries as populations begin to migrate in search of jobs, food and shelter? Anti-American sentiment is sure to rise if indigenous populations find themselves being squeezed out by gringos with dollars.

For the moment only Panama looks to be capable of withstanding the pressures for any length of time because of its huge banking industry and the canal. Many major US corporations are actually incorporated as Panamanian foundations and thus the US has a vested interest in underwriting Panamanian security for as long as possible, even as America’s global reach is being impaired on a number of fronts. Unfortunately the (until now) perennially stable Costa Rica lies just across Nicaragua’s southern border and Honduras and El Salvador lie just to the north. In late 2004 Honduran officials reported a possible “Al Qaeda presence” and in 2005 Honduran street gangs started proliferating throughout the region. Things do not look good for Nicaragua as Sandinista leader (former president) Daniel Ortega re-emerges onto the political scene. It seems clear that the US government will rush to destabilize that country and where the instability goes after that is anyone’s guess. – MCR]

US warns millions in aid at risk if Nicaragua ousts president

· Leader under threat over alleged election violations

· Bush representative seeks to avert Sandinista revival

Duncan Campbell
Thursday October 6, 2005

In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.

The United States has warned Nicaraguan politicians that millions of dollars of aid will be withheld from the country if any moves are made to oust the president, Enrique Bolaños. In a move that has echoes of US intervention in the country's politics in the 80s, the US deputy secretary of state, Robert Zoellick, is in the capital Managua this week to head off the possibility of the Sandinista leader, Daniel Ortega, returning to power.

The Nicaraguan national assembly is at present debating a proposal to impeach Mr Bolaños, who was elected in 2001, for alleged campaign finance violations. He claims he is the innocent victim of an agreement, known locally as el pacto, between Mr Ortega and the former president, Arnoldo Aleman, of the Constitutionalist Liberal party, who has himself been sentenced to 20 years for corruption.

"For those who think they can remove him [Mr Bolaños], my message is: there will be consequences in terms of their relations with the United States," said Mr Zoellick. He attacked Mr Ortega and Mr Aleman and what he described as the "corrupt pact" between them. He said $4bn (£2.3bn) in debt forgiveness and a $175m grant to the country would be withheld if Mr Bolaños were toppled. Corrupt Aleman backers could also face the withdrawal of their visas to enter the US, he added.

"The United States will not welcome corrupt people to our country," Mr Zoellick said at a press conference, according to the Associated Press. "We will take actions to block them."

Mr Zoellick added that Nicaragua's "promising future is threatened by a creeping coup". He also met a number of Nicaraguan politicians in what was seen as an indication of who enjoys US favour.

The pro-business, pro-US Mr Bolaños, who was vice-president under Mr Aleman but came to power promising to fight corruption, has said that he is the victim of a "rolling coup d'etat".

He had enjoyed a working relationship with Mr Ortega in the early part of his administration but is thought to have been warned off any such association by the US and no longer has a strong power base in the national assembly. He has made pleas to international bodies for assistance but attempts by the Organisation of American States to resolve the dispute have so far been unsuccessful.

The pact between the conservative Mr Aleman and the leftist Mr Ortega has dismayed Nicaraguans. Many leading Sandinistas, who participated in the 1979 revolution that overthrew the US-backed dictator, Anastasio Somoza, have quit the party, disillusioned with Mr Ortega and what they see as his unholy alliance with Mr Aleman, which is regarded as a cynical device to secure power and immunity for the two men. Mr Ortega's power base is now centred around a rump of remaining Sandinistas known as the "Danielistas."

There is also, however, some resentment at the role of the US, which backed Mr Aleman when he was elected in 1997 and who illegally aided the anti-Sandinista "contras" in the 1980s civil war when the then President Ronald Reagan vowed to make the Sandinistas say "uncle". The US also made clear in 2001 that voters should elect Mr Bolaños or face financial consequences, and the Bush administration has rehabilitated many of those implicated in supporting the contras.

Mr Ortega, who was elected president in 1984 but lost two subsequent elections, has long harboured ambitions to return to power. His chances in next year's poll are seen as slim.

Mr Aleman, who left office in 2002, was investigated when Mr Bolaños came to power and found to have embezzled $100m from the state. Despite his 20-year sentence, he is free to move around Managua, supposedly for health reasons.


The 1979 revolution in Nicaragua saw the end of the Somoza dynasty, overthrown by the Sandinista National Liberation Front, led by Daniel Ortega. The "contras", backed by the US, fought to overthrow the Sandinistas. Mr Ortega was elected president in 1984 but lost in 1990. Arnold Aleman held office until 2002 but has been convicted of embezzling state funds. Enrique Bolaños replaced him on an anti-corruption ticket.

Guardian Unlimited © Guardian Newspapers Limited 2005

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[We dare not forget that Mother Nature is continuing to escalate her reminders about who is in charge here. Torrential rains are now pouring down on the estimated 40,000 dead and their rescuers in South Asia. We can only wait to see what surprises she has in store for us this winter. – MCR]

Flood relief efforts hit problems
BBC News

In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.

Relief efforts for millions of people in South Asia affected by floods are being badly hit by continuing bad weather and organisational problems.

In the Indian state of Bihar, 400 soldiers are struggling to help four million victims. Thousands are still without food or drinking water.

Up to 80 more people were reported missing on Thursday in separate incidents in India and Bangladesh.

Scores have already died in India, Nepal and Bangladesh in recent days.

Accurate figures for the devastation are hard to come by. Conservative estimates suggest at least 10 million people are affected in the three countries.


The BBC's Anu Anand in Bihar saw one aid convoy stuck in waters that are too high for road vehicles, yet too shallow for boats.

A local bridge had collapsed, leaving villagers stranded.

Our correspondent says the Bihar government has only just appealed for federal emergency funds for the state. There are no Western aid agencies operating there.

She says thousands of people are spending another night huddled under plastic sheeting without food or drinking water.

In the town of Darbhanga reports say hungry people plundered grain stores.

Many of the flood victims say the disasters - which happen most years during the monsoon season - could be avoided if South Asian governments co-operated in managing water resources.

In one incident in Bihar, at least 25 people are feared drowned when the boat they were travelling in sank in the Bagmati river.

In another incident in Bihar, 34 prisoners are reported to have escaped from a jail district after it was flooded.

Hundreds of kilometres of roads and railways have been swept away or submerged in the state, further hampering relief efforts.

Bangladesh severe

Sixty people are also missing in Bangladesh after an embankment on the swollen Jamuna river burst.

The BBC's Roland Buerk in Dhaka says that floods remain severe across the country, with 29 out of 64 districts affected.

The government says its own relief operation to distribute rice will be sufficient and is not calling for international aid.

Central areas are now coming under increasing threat as the floodwaters move south towards the Bay of Bengal.

Forecasters say low lying areas around Dhaka are beginning to be inundated though the capital itself is safe.

'Fury of the floods'

Across the border, in the Indian state of Assam, officials said on Thursday that nine-million people had been affected by the rains there since late June.

An official told the BBC that 400,000 homes have been either destroyed or damaged.

One Assam resident, Madhab Deb Barma, told BBC News Online by e-mail: "I saw the fury of the floods at such a close angle that I am frightened even now after returning from the flood-hit districts of Barak Valley.

"So many people were struggling just to save basic minimum items from their houses, with schools and government buildings filled with flood-hit refugees."

Assam 's Chief Minister, Tarun Gogoi, is demanding international co-operation to prevent the annual floods which would involve water supply control in China and Bhutan to the north.

"My children are dying in hunger," one woman, Madhu Sarma, told the AFP news agency.

"For the last three days, we have been starving and have not received anything from the government," she said, speaking on the outskirts of Assam's main city, Guwahati.

In Nepal, meanwhile, the floods have started receding after a week of heavy rain.

At least 50 people died in the kingdom over the last week in landslides and flash floods, and thousands of others have been displaced.

While parts of South Asia have had too much rain, some areas in central and northern India are desperate for it to avoid drought.

India was hit by a massive drought in 2002 and officials say that they want to be better prepared this time.

Floods and landslides are common in South Asia during the monsoon season when annual rains combine with melting snow from the Himalayas.

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