www.upi.com By Bradley Brooks UPI Business Correspondent From the Business & Economics Desk Published 3/3/2003 11:05 AM

RIO DE JANEIRO, Brazil, March 3 (UPI) -- The Brazilian state development bank is likely to take control of a U.S.-owned utility that failed to meet its debt payments, local media reported.

The BNDES development bank has refused to roll over a $329 million debt payment owed it by a subsidiary of AES Corp., the U.S. electricity company, according to local reports.

The bank has the right to collect its collateral -- shares in Eletropaulo, Latin America's largest electricity company, which would give it control of the outfit.

Foreign investors have been keeping a close eye on this situation, as many fear it could signal the re-nationalization of privatized companies under the new leftist President Luiz Inacio Lula da Silva.

BNDES declined to comment, citing a confidentiality agreement. The bank said it was up to AES to inform its stockholders and the public of the decision, made at the start of Brazil's carnival season, when offices are closed.

AES has yet to comment on the matter.

AES has asked BNDES to renegotiate its debt, and BNDES had already rolled over an $85 million payment owed it by AES in January.

The Virginia-based AES owes BNDES some $1.2 billion in debt, money borrowed to invest in three Brazilian utilities during the aggressive privatization of the late 1990s.

In the past seven years, private investors have injected more than $30 billion into the power sector, which has seen turbulence since a 1999 devaluation and strict energy rationing in 2001 after a drought. Much of Brazil's power is hydroelectric.

Local and foreign analysts were confident that BNDES would not decide to take back control of Eletropaulo, though all were clear that it wasn't out of the realm of possibility.

"This is a very technical situation. It's not a political thing that the government is taking over the company," Oswaldo Telles, a Brazilian analyst with BBV Corretora in Sao Paulo, told UPI before the reports that BNDES was calling in the loan.

"You have to face it as a bank executing or not a past due debt."

Brazil's power companies were hit hard last year as the local currency lost 35 percent of its value.

Most companies have debts in dollars but revenues in reals -- the local currency -- contributing to tough times and an inability to meet debt payments.

It was in 2001 that Brazil was forced to ration energy, as a drought provoked a shortage of hydroelectric power, on which the country is largely dependent.

An aggressive energy conservation campaign has also had its effect, with demand for energy falling by nearly one-fourth since 2001.

Additionally, unknown changes look to be in store for the energy sector's regulating agency, which sets prices.

Lula and his economic team have harshly criticized Brazil's regulating agencies, saying they appear to be placing the betterment of corporations ahead of the needs of Brazil's citizens.

Analysts, however, say that a regulating agency that isn't independent of the government will never create an environment where the foreign investor feels confident, with worries that pricing policies will change radically with every new government.

usinfo.state.gov 04 March 2003 Transcript: White House Press Briefing, March 4, 2003 .............. Q: Next question, Ari, please -- recently The Washington Post had an editorial in which it expressed its worries about some of the latest steps taken by President Hugo Chavez of Venezuela, and asking the United States to get more involved with a group of friends trying to find a democratic solution --

MR. FLEISCHER: The United States is deeply involved in the Mission of the Secretary General of the Organization of American States. They have formed this group of friends that is working very hard to bring solutions to the problem in Venezuela based on a constitutional solution and based on a peaceful model. We're a deeply integral part of that. ...............

(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: usinfo.state.gov)

www.hopewellnews.com By ALEX BRIDGES News Staff Writer

Even as temperatures warm up across much of Virginia, Columbia Gas customers may feel the cold reality of increased prices as they could begin to see their bills jump more than 30 percent. Columbia Gas announced Monday the company's customers would likely see a 33 percent increase in their utility bill starting in March and depending on how much gas they use, consumers will feel that cost increase. Columbia Gas used the example of a current monthly bill of about $106 increasing to more than $140. Bob Innes, a spokesman for Columbia, explained the increase comes as a result of greater usage by its customers during an unusually cold winter. The price Columbia pays for the fuel increased, forcing the company to pass the cost onto the customers. Specifically, reasons for the increase include: • Continued colder weather resulting in heavier than anticipated withdrawals from underground storage facilities. • The sustained cold weather in Columbia Gas’ service territory has been about 10 percent colder than normal for the season. • The time required to develop new drilling of natural gas versus the increased demand is creating added price pressures. • Oil is adding upward pressure on natural gas prices. This is contributed to the Venezuela strike and Middle East uncertainty. • According to the American Gas Association natural gas demand is expected to increase nearly 8.7 percent above last winter’s level. Innes also explained the driving cost comes from the unrest in the Middle East and in Venezuela. "The energy market is being pressed," Innes said. Industries have helped drive up the cost, as well, since many use natural gas for fuel. Ken Schrad, spokesman for the State Corporation Commission, explained the entire energy market has reacted to the problems involving foreign oil. "They had no choice but to pass the cost on to the consumer," Schrad said. Schrad said Columbia files reports with the SCC and looks at both past and future costs of natural gas. He acknowledged the cost of the fuel had spiked following the cold snap Industries often have the capability to switch fuel sources, Schrad said. When oil prices increase, they can revert to natural gas. This switch then raises the demand and the price of natural gas, the SCC official said. Although the company couldn't fully anticipate the weather, Innes said Columbia Gas looks at a 30-year average when determining future prices. Those currently on a budget payment plan with the utility may also be in for a shock: Their March bill may appear about double what it should be. The annual March adjustment is indicating a potential for the monthly budget customer to have their amount double the current amount, according to a Columbia Gas press release. Customers will see their individual account change in their March bills. Columbia Gas has about 47,000 customers participating in the budget payment plan. Schrad said Columbia will work with its customers to allow them to pay their bill to the best of the consumer's ability. Additionally, area social services departments offer assistance through a crisis program; the Salvation Army also helps with Heatshare. Although the company offers the payment plan, "there's an obligation of the customer to contact them" about whether they can receive assistance. Prices may not go down any time soon, Innes said, adding the company cannot predict whether prices will go down.

www.lapress.org Tuesday,  March 4,  2003 Elza Fiúza/ Agencia Brasil Ricardo Soca.  Mar 3, 2003

"Zero Hunger" by 2007 was the promise made by Brazil' s President Luiz Inácio Lula da Silva when he served up a program to eliminate poverty and malnutrition Jan. 30. An estimated 50 million Brazilians, nearly one-third of the population, live in poverty (LP, Jan. 15, 2003).

At the program launch in Brasília, Da Silva also swore in the new members of the National Food Security Council (CONSEA), made up of cabinet ministers, legislators, governors, trade unionists, business leaders and representatives of indigenous and civil society movements. CONSEA will develop the program in partnership with the Ministry of Food Security and the Fight Against Hunger, headed by José Graziano. The Council was previously founded and disbanded respectively by ex-Presidents Itamar Franco (1992-94) and Fernando Henrique Cardoso (1994-2002).

Da Silva emphasized that the "Zero Hunger" program does not just mean more food. He aims to implement structural measures that will combat the causes and effects of hunger, targeting the most marginalized social groups in an effort requiring "the mobilization of society."

Da Silva recognizes the urgent nature of the program. "Those who are hungry can t afford to wait another day," he said. "Our fight against hunger is a fundamental step towards eliminating misery, poverty, the lack of opportunities and social inequality."

Food security, according to Da Silva, can only be guaranteed by increasing food demand, lowering the prices of essential foodstuffs and providing assistance in hunger-related emergencies. To do this, he intends to boost rice and bean production by 30 percent, at the same time creating 350,000 new jobs in the agriculture sector.

"Zero Hunger" consists of 60 action plans split into three groups and is set to be fully operative by August. The three-pronged attack aims to tackle hunger on "structural," "specific" and "local" levels. This involves increasing food production via technical training, assisting families in extreme situations and decentralizing the program to include the participation of civil society and 5,600 municipalities.

Da Silva has committed US$1.4 billion to the program in its first year, including $500 million in state funds and the remainder from other ministry programs, the World Bank, the Inter-American Development Bank and the United Nations (UN). "In Brazil hunger can be represented by a half empty plate or the acceptance of just one meal a day," said Andrew MacMillan, of the UN Food and Agriculture Organization. "In the long run this weakens the people and undermines the development opportunities in a country filled with potential."

"Zero Hunger" kicks off at the end of February with pilot programs in Acauá and Guaribas, in the northeastern state of Piauí. Electronic cards are to be distributed to 716 families with which they will be able to draw $13 a month from state-owned banks to cover their food needs. The cards are renewable every three months, subject to proof of sale receipts.

The program, despite receiving widespread popular support, came under fire from conservatives as well as some CONSEA members, including Mauro Morelli, Bishop of Duque de Caxias in Rio de Janeiro, who can t stomach the idea of controlling what beneficiaries buy.

World Bank officials share Morelli s critique, calling such controls pointless because hungry people do not waste money on products other than food anyway. Conservative commentators have called the program "a political marketing program that sells redemption for remorse."

Further discontent was expressed over the slow start to the program, limited to a small corner of Brazil. "We had to start somewhere and give priority to one area in particular," explained Rev. Carlos Livanio Christo (better known as Frei Betto), Da Silva s special "Zero Hunger" advisor. "Little by little the program will extend nationwide", said the priest.

Government goals target aid such as food banks and public dining halls for 1.5 million families in 1,000 municipalities across the semiarid region of the northeast, one of the poorest parts of the country, by the end of 2003. Da Silva s Minister of Cities, Olivio Dutra, intends to link "Zero Hunger" with his program "Zero Thirst", aimed at bringing an end to chronic water shortages in the same region.

With Da Silva s public approval at almost 84 percent, the new president appears to have the nation behind him. Politicians across the spectrum, as well as media moguls, businessmen, bankers, and trade union leaders, have lent their solidarity and support in the fight against hunger and poverty.

www.globeandmail.ca By JEFF GRAY Globe and Mail Update

For the second year in a row, Vancouver has finished second in a study ranking quality of life in 215 world cities.

The study, from Mercer Human Resource Consulting — a firm with offices in 40 countries — takes into account public safety, political stability, economics, culture, personal freedom, schools, transit and other public services.

Vancouver finished first in the same rankings two years ago, but slipped to second last year because of "traffic congestion" — leaving the top spot to Zurich. The Swiss city ranked first again this year.

In this year's survey, Toronto ranked 12th, tied with Brussels and the German city of Düsseldorf and up from 18th the year before. Ottawa was 20th, up five spots from last year. Montreal was 23rd, a two-spot improvement. Calgary was 26th, up from 31st.

Mercer said Scandinavian cities — which usually rank quite high on such surveys — were re-evaluated this year "on the basis of evidence relating to seasonal affective disorders caused by shorter daylight hours."

Some of their rankings appeared to slip as a result.

Helsinki dropped to 26th from sixth, while Oslo sank from 15th to 31st.

Many of the world's most-visited and most-romanticized cities rank quite low on the quality-of-life scale.

London ranked 39th, tied with Boston, Portland, the French city of Lyon and North Carolina's Winston-Salem. At 31st, Paris ranks behind Calgary, on par with the Australian cities of Brisbane and Adelaide and with Yokohama, Japan. New York ranked 44th.

The worst place in the world to live was Brazzaville, capital of the Republic of Congo. It ranked 215th. Many African cities were clustered at the bottom of the scale, but the Iraqi capital of Baghdad was third-last.

Mercer said the rankings were accurate as of November, 2002, but could be re-evaluated, especially if events in the Middle East warrant.

Ranked on public safety alone, Canada's cities are the safest in North America, the study says, "due to strict law enforcement and low crime rates."

All five cities tied for 25th in the world on this measure.

In the U.S., Honolulu, Houston and San Francisco were the safest, tying for 40th place worldwide. Washington, D.C., was North America's most dangerous city, ranking 107th.

Luxembourg was the safest city in the world; Bangui, in the Central African Republic, was deemed the most dangerous.

Caracas, 140

For the whole list: www.globeandmail.com