2012 most expensive year for US motorists

NEW YORK | Mon Dec 31, 2012 12:39pm EST

NEW YORK (Reuters) - The average U.S. gasoline price in 2012 was a record-high $3.60 a gallon, topping the previous high of $3.51 in 2011, travel group AAA said on Monday.

AAA blamed refinery outages, major hurricanes and unrest in the Middle East for the rise.

Drivers in states like Hawaii, Alaska, California and New York paid the highest prices.

However, the price fell to $3.30 a gallon in December, the lowest monthly average for the year, AAA said.

(Reporting by Selam Gebrekidan)

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Kosovo struggles to shake Wild West image among investors

A general view of Pristina, capital of the breakaway Kosovo province, is seen as the sun rises, January 22, 2008.

Credit: Reuters/Hazir Reka

By Fatos Bytyci

ASTRAZUB, Kosovo | Mon Dec 31, 2012 7:09am EST

ASTRAZUB, Kosovo (Reuters) - When Briton Christopher Gilbert and London-educated Etrur Albani teamed up to dig marble in Albani's native Kosovo, they knew they were taking a gamble.

For two years, Albani and Gilbert, who was better known in Britain as an entertainment industry entrepreneur, knocked on literally hundreds of doors in search of intrepid investors.

They eventually turned up 12, convincing them that the risk associated with investing in this young Balkan nation was overblown and that the image of crime and corruption did not match the reality.

One of the poorest corners of Europe, Kosovo is in dire need of outside investment as it tries to make a go of the independence it won from Serbia in 2008.

By September, Gilbert and Albani's Fox Marble Holdings (FOX.L) was listed on the junior tier of the London Stock Exchange and had spent 1 million euros in readying five mines for business.

Mining is seen as a potential driver of growth in Kosovo, a small country blessed with mineral deposits and Europe's youngest population, but shackled with a damaging reputation for gangsters and graft.

Now, Fox Marble's dream is in tatters, its licences to cut and sell Kosovo's marble revoked and millions of euros of investment hanging in the balance.

Whether the victim of over-zealous officials or something more sinister, Fox Marble has gone from investment trailblazer to cautionary tale in the risks of doing business in this country of 1.7 million people roughly half the size of Wales.

"We spent two years convincing people that the country risk was not something that people needed to be concerned about and now everybody is turning to me and saying, 'We told you so'," Gilbert told Reuters.2

In December, Kosovo's Mining and Minerals Commission ICMM.L revoked four of Fox Marble's five licences, saying the firm had failed to start work within an agreed time frame.

"It could take years for the work to start. How do we know?" the chairman of the ICMM board, Ahmet Tmava, told Reuters. "Our resources must not be held hostage."

Gilbert said the firm had needed more time to raise funds but had already spent heavily on machinery, taxes and preparing the mines.

He cited a Kosovo law saying that the ICMM is obliged to inform the company in writing and give it 2-4 months to address the complaint. Fox Marble got neither, Gilbert said. Tmava said the company was informed "verbally".

"VERY STRANGE"

Asked what was behind the decision, Gilbert, who was in Pristina trying to save the licences, chose his words carefully.

He said the mining authorities had acted outside the law, and suggested there was perhaps more to the matter than met the eye. The mines contain deposits valued by Gilbert and Albani at billions of euros.

"It's certainly a very strange situation for a company that is spending money in Kosovo. We don't know what the realpolitik is behind this, but clearly there is something going on."

Asked about the allegations of political interference in the marble case, Kosovo's minister of economy and development, Besim Beqaj, said only: "I'm not aware of anything like that."

Britain's ambassador to Kosovo, Ian Cliff, said the British government was "very concerned" and, in a written response to questions from Reuters, said he had heard of allegations of political interference.

"I hope this is not the case," Cliff said, adding that British Foreign Secretary William Hague had raised the issue with Kosovo "at the highest level".

The United States and the European Union have spent an estimated 4 billion euros in stabilising Kosovo and encouraging good governance and growth since NATO went to war in 1999 to halt the killing and expulsion of civilians by Serbian forces fighting rebels from Kosovo's ethnic Albanian majority.

With ethnic tensions subsiding, Western powers formally gave up "supervisory" powers over Kosovo this year. But an EU police and justice mission retains some executive authority to investigate cases of organised crime, corruption and war crimes.

NATO retains some 6,000 troops on the ground, mainly in the north where a small Serb minority still rejects Kosovo as a sovereign state.

The government insists it is changing perceptions. There are positives: Kosovo's legislative framework has been crafted to meet most EU standards; construction is thriving, driving average annual economic growth of 5 percent over the past five years; foreign direct investment was up 14 percent to 379 million euros in 2011; in October the World Bank lifted Kosovo from 126 to 98th place in a poll on ease of doing business.

"Kosovo has been challenged by a bad image unfairly attached to it due to the past," said Valdrin Lluka, head of the Kosovo Investment Promotion Agency, part of the Ministry of Trade.

"When investors come with expectations of high crime and corruption, they see a beautiful country, friendly people and a friendly business environment," he told Reuters. "Good news is not news, so foreigners get to know only the dark side of Kosovo, and that's what's damaging us."

HARD TO INVEST WITHOUT BRIBES?

But there was more bad news in November: an Austrian firm said it had stopped printing Kosovo's biometric passports for now because 1.4 million euros in fees had not been paid.

Natali Velija, a German citizen and the company's local partner in Kosovo, was arrested on suspicion of embezzling the money, but Velija says it was spent on bribes for a handful of officials from the Ministry of Interior.

The Austrian company denies bribing anyone.

Kosovo suffered a heavy blow last year when the sale of the country's most profitable company, the state telecom concern PTK, collapsed after corruption charges were filed against a number of senior PTK officials.

Avni Zogiani, founder of the Cohu (Wake Up) non-governmental organisation dedicated to fighting corruption, said it was extremely difficult to invest in Kosovo without political connections or a readiness to bribe.

"When we talk about small and medium-sized projects of a few million euros, then they're dealt with through bribes," he said.

Albani said he and Gilbert had struggled to shake the stereotype. "When we went to Italy to buy machines," he said, "they asked, 'Why are you coming with a letter of credit? Where's your suitcase of money?'"

Investors and Western officials in Kosovo also cite frequent power cuts, an underdeveloped administration, widespread tax evasion and high interest rates on bank loans, some as much as 25 percent as banks hedge against political and economic instability.

Kosovo is ranked 105 on Transparency International's graft perception index, on a par with Bolivia, Gambia and Mali.

"I spend a lot of my time persuading British companies and financial institutions that the Kosovo 'country risk' is less than they think - so that they will support investment here," said Cliff, the British ambassador.

"The key practical question for the Kosovo institutions is this: can Kosovo afford to lose 10 million pounds of British investment and the jobs and exports that will go with it?"

Gilbert and Albani, first inspired by a 2005 USAID report extolling the quality and colour of marble in Kosovo, stood to make a lot of money.

They estimate the five mines that Fox Marble won licences to exploit, including Red Rock near the village of Astrazub in southwest Kosovo, contain around 240 million cubic metres of marble worth billions of euros.

Albani and Gilbert say Kosovo marble was used in building the White House in Washington and the Vienna Opera House.

In Astrazub, villagers recall marble mining under socialist Yugoslavia, and say their ancestors told stories of its extraction when Kosovo was part of the Ottoman Empire.

Signs of traditional, small-scale excavation can still be seen. A new mining venture would be a boon for the local economy, which like the rest of Kosovo struggles to absorb new jobseekers who often end up emigrating for work. Kosovo also has lignite, lead, chromium, zinc, nickel and silver deposits.

Mining in Kosovo ground to a halt during the violent disintegration of Yugoslavia in the 1990s, and has only restarted on a limited scale over the past few years. In the north, Kosovo's giant Trepca lead and zinc mine complex stands idle, hostage to complex ownership disputes.

Fox Marble has filed a complaint with the ICMM, and Gilbert insisted they would not give up. "We're not going anywhere. This is grave for Fox Marble, but it's a tragedy for Kosovo." (Editing by Matt Robinson and Mark Heinrich)

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Sculpture knock-offs prove plague of art world

By Daniel Grant

AMHERST, Massachusetts | Mon Dec 31, 2012 1:48pm EST

AMHERST, Massachusetts (Reuters) - An epidemic of sculpture knock-offs is plaguing the art world, and just like the sale and production of counterfeit designer handbags and shoes, law enforcement is having a difficult time keeping up.

Statues, wildlife figures and, in one case, a copy of Jasper Johns' 1960 metallic collage "Flag," are turning up for sale in stores, garden centres and other outlets without the approval of the artists who originally created them, and sometimes at top-end prices.

American sculptors say they are losing income and spending tens of thousands of dollars in legal expenses trying to track down and stop the knock-offs, often with little success. Many of the forgeries come from foundries in Asia, while advances in digital scanning and photography are making copycat sculptures even easier to create.

Art crime police say it is difficult to estimate the scale of the trade in fakes.

"There is a significant problem of knock-offs in all areas of the art world," Robert K. Wittman, retired founder of the FBI's Art Crime Team, told Reuters.

He cited an Interpol statistic of $6 billion in annual art crimes around the world, of which the majority are forgeries. Unauthorized sculpture castings are classified by the FBI and Interpol as forgeries.

Eli Hopkins, business manager for his father, Colorado-based wildlife sculptor Mark Hopkins, said he found fibreglass copies of his father's bronzes in a Hobby Lobby arts and crafts store selling for one-tenth the price of the originals.

"I used to get catalogues of decorations just to look for copycats, but I just stopped after a while," Hopkins told Reuters. "I got too stressed out finding things and then finding out that I couldn't do anything to stop it."

Over the years, he and his father, whose work has been collected by McDonnell Douglas Corp and former President Bill Clinton, among others, have spent more than $75,000 in legal expenses, hiring lawyers to write cease-and-desist letters, occasionally going to court and only sometimes meeting with success.

"You try to get the judge to award legal fees but that doesn't always happen," he said. The real culprits, Hopkins said, are foundries in China and Thailand that produce knock-offs and who appear to be outside the reach of the law.

DISCOUNT PRICES

The same problem happened to Jane Dedecker, a sculptor in Loveland, Colorado, whose works have been collected by television hostess Kathie Lee Gifford and actor Arnold Schwarzenegger, among others.

She first discovered unauthorized reproductions of her work 10 years ago at a garden store. One of the sculptures looked like hers and bore her signature but it wasn't made by Dedecker and the price was less than one-third of the $21,000 she charged for the original version.

Dedecker and her business managers say they have identified approximately 30 of her sculptures that have been reproduced by unknown others.

On occasion, a culprit is found. In November, Brian Ramnarine, owner of the Empire Bronze Art Foundry in Long Island, New York, was charged with one count of wire fraud after he attempted to sell both privately and through an international auctioneer an unauthorized copy of Johns' 1960 metallic collage "Flag" for $11 million.

The foundry was known to Johns, who, in 1990, had brought a mould for the sculpture to the foundry in order to create a wax cast of the piece, according to the U.S. Attorney's office in Manhattan.

Ramnarine produced the wax cast for Johns but is accused of keeping the original mould and later using it to manufacture the knock-off. Ramnarine pleaded not guilty and is awaiting trial.

Many foundries today do not need a mould or a casting to recreate sculptures. Photographs of art works can be scanned into computers and turned into three-dimensional models from which new moulds are created.

"With the advances in 3D scanning and other digital technologies, I suspect it is easier than ever to duplicate work and create copies," DeWitt Godfrey, professor of art at Colgate University and an authority on unethical castings, told Reuters.

It was through photographs used to make digital files that Dedecker's and Hopkins' work was appropriated. Dedecker recently went public with the experience on website bronzecopyright.com.

"I get calls all the time from sculptors, asking me, 'What do I do?' They figure that since it happened to me, I've figured out some way of fighting back, but I never know what to tell them," she said. "Personally, I just try not to think about it."

Dedecker advises artists to copyright all their work, which will not stop people from making and selling knock-offs but may lead, if a lawsuit ever gets to court and results in a win for the artist, to recovering attorneys' fees. (Editing by Jill Serjeant)

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New airline operating licences in Saudi may take 3-6 months

By Asma Alsharif and Praveen Menon

JEDDAH/DUBAI | Mon Dec 31, 2012 5:13am EST

JEDDAH/DUBAI (Reuters) - Foreign airlines may need about three to six months to obtain operating licences letting them enter Saudi Arabia's domestic aviation market, a spokesman for the General Authority for Civil Aviation GACA.L said on Saturday.

GACA announced on Friday that Qatar Airways and Bahrain's national carrier Gulf Air had become the first foreign airlines to obtain carrier licences under which they would be able to run local and international flights in the kingdom.

Fourteen foreign and local companies had applied for the licences, which mark a major reform of the aviation market in Saudi Arabia, the biggest Arab economy and by far the largest country in the Gulf geographically.

Currently, only national carrier Saudi Arabian Airlines and budget airline National Air Services serve a domestic market of about 27 million people. Foreign carriers can only fly in and out of Saudi Arabia, not within the country.

Over 54 million passengers passed through Saudi Arabia's 27 airports last year, up 13.6 percent from 2010, according to GACA data. But the kingdom has one of the smallest airline networks in the region relative to its size, and passengers have complained about the limited range of flights as well as the quality of service.

In a statement to Reuters on Saturday, the GACA spokesman said Qatar Airways and Gulf Air were working on final procedures for their operating licences.

He did not comment on whether other firms among the 14 that applied for carrier licences might eventually be successful. The 14 included firms fully owned by Saudis, Gulf-Arab firms, and consortiums of Saudi-Gulf and Saudi-Chinese companies.

OPPORTUNITY

Over the past year, Saudi Arabia has taken steps to liberalise its economy in several areas in an effort to create jobs and diversify away from heavy dependence on oil. For example, it is trying to develop a home mortgage industry.

Earlier this month the information minister said GACA would be allowed to grant permission for airlines to raise their fares under certain circumstances, and that fuel prices at Saudi airports would be reviewed to ensure fairer competition.

Abdulwahab Abu Dahesh, a Saudi financial analyst, said he believed the government would also remove subsidies now provided to existing Saudi airlines.

"This has to happen in 2013 because there will be no competition unless that problem is solved," he said. "This needs to be resolved before these firms start operations."

Qatar Airways could be a strong competitor in Saudi Arabia. It is growing rapidly, and in October became the first major Gulf airline to announce plans to join the oneworld alliance, a global group of carriers which cooperate in areas such as route networks, frequent flyer schemes and procurement.

Akbar Al Baker, chief executive of Qatar Airways, has said he is interested in the possibility of launching an airline in Saudi Arabia.

By contrast, Gulf Air has been struggling; last month it cut an order for Boeing (BA.N) planes and revised a deal with Airbus (EAD.PA) as it restructured its fleet to reduce pressure on its finances.

Nevertheless, Riyadh has been supporting Manama politically and economically during the social unrest that has plagued Bahrain since last year. A Saudi operating licence could help Gulf Air by letting it diversify beyond its weak home market.

Officials for Qatar Airways and Gulf Air declined to comment on the airlines' plans when contacted by Reuters on Saturday. (Writing by Andrew Torchia)

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Yale under fire for new campus in restrictive Singapore

Handout image shows an artist's rendition of the learning commons at the Yale NUS College in Singapore.

Credit: Reuters/Yale NUS College/Handout

By Stephanie Simon

NEW HAVEN | Mon Dec 31, 2012 5:49am EST

NEW HAVEN (Reuters) - For more than 300 years, Yale University has prided itself on training top students to question and analyze, to challenge and critique.

Now, Yale is seeking to export those values by establishing the first foreign campus to bear its name, a liberal arts college in Singapore that is set to open this summer. The ambitious, multimillion-dollar project thrills many in the Yale community who say it will help the university maintain its prestige and build global influence.

But it has also stirred sharp criticism from faculty and human-rights advocates who say it is impossible to build an elite college dedicated to free inquiry in an authoritarian nation with heavy restrictions on public speech and assembly.

"Yale's motto is 'Lux et veritas,' or 'Light and truth,'" said Michael Fischer, a Yale professor of computer science. "We're going into a place with severe curbs on light and truth ... We're redefining the brand in a way that's contrary to Yale's values."

Yale President Richard Levin describes the new venture as a chance to extend Yale's tradition of nurturing independent thinkers to a dynamic young nation at the crossroads of Asia. In the 19th century, Yale scholars fanned out to launch dozens of American colleges, Levin noted in a 2010 memo presenting the concept to faculty. "Yale could influence the course of 21st century education as profoundly," he wrote.

Levin, who spent years expanding Yale's campus in New Haven before initiating the Singapore project in 2010, has announced plans to retire at the end of the academic year. His successor, Yale Provost Peter Salovey, also supports the Singapore venture.

Working with the National University of Singapore, or NUS, Yale is building a comprehensive liberal arts college from scratch. The school will offer majors from anthropology to urban studies, electives from fractal geometry to moral reasoning, and a rich menu of extracurricular activities -- sports, drama, debate, even a juggling club.

Scheduled to open this summer with 150 students, it is slated to grow to about 1,000 undergraduates living in a high-rise campus now under construction.

While American universities have been venturing overseas for decades, they have mostly offered tightly focused degree programs, often for graduate students. The closest analogy to the Yale project may be New York University's branch campuses now under construction in Abu Dhabi and Shanghai.

But the new NYU campuses are extensions of the university. The Yale venture, which targets top students from around the globe, is an unusual hybrid.

It will be called Yale-NUS College. It will draw some faculty -- and its inaugural president, Pericles Lewis -- straight from New Haven. Students will spend the summer before freshman year in New Haven, attending seminars with Yale faculty. When they graduate, they will be welcomed into the Association of Yale Alumni.

Yet Yale officials are emphatic that the new school is not a branch campus. The degrees it issues will not be Yale degrees.

"It is not Yale," said Charles Bailyn, an astronomy professor on leave from Yale to serve as the founding dean of Yale-NUS.

OPPORTUNITY OR "FRANKENYALE"?

The new college will be funded entirely by the Singapore government, which will also subsidize tuition. Singapore citizens will pay about $18,000 a year, including room and board. International students will pay about $43,000 unless they secure a discount by committing to work for a Singapore company for three years after graduation.

Yale and Singapore will get an equal number of seats on the new college's governing board -- but Singapore's education minister must approve all the Yale nominees.

The arrangement exposes Yale to risk because its name is on the college, yet the university does not have control over the end product, said Richard Edelstein, who studies trends in higher education at the University of California at Berkeley. One angry member of Yale's faculty, Christopher Miller, a professor of French and African American studies, has dubbed the venture "Frankenyale."

Those involved in the project say the novel structure is a boon that will enable educational experimentation, with an emphasis on interdisciplinary seminars and student research. It's a "once-in-a-lifetime opportunity to build a new college program from the ground up," said Yale anthropologist Bernard Bate, who has signed on to teach in Singapore.

He and others say they will bring the best of their new approach back to New Haven. And they contend that fears about censorship in Singapore are wildly overblown.

That issue came to the fore last spring, when Yale faculty voted 100 to 69 for a resolution raising concern about the venture in light of "the history of lack of respect for civil and political rights" in Singapore.

Human Rights Watch, the international advocacy group, subsequently accused Yale of "betraying the spirit of the university." This month the American Association of University Professors weighed in, expressing concern about the project's implications for academic freedom.

Singapore, an island nation in southeast Asia, is a democracy but has been dominated by one political party since securing independence from Britain half a century ago. In the name of stability and security, the government restricts public demonstrations to a corner of one park and heavily regulates news and entertainment, according to the U.S. State Department.

Last year a British author was jailed for writing a book critical of Singapore's judiciary. This spring the government prevented an opposition politician from leaving the country to speak at the Oslo Freedom Forum.

Still, Yale faculty working on the new college said they had spoken with foreign professors teaching on other campuses in Singapore and came away convinced that academic freedom would be respected.

George Bishop, a Yale PhD who been teaching psychology at the National University of Singapore since 1991, says he has never felt restricted. In a class on the AIDS epidemic, he and his students freely discuss how Singapore's anti-sodomy laws hinder the nation's public-health response.

"We criticize the government all the time in class," said Bishop, who has joined the faculty of the new college.

PLENTY OF APPLICANTS

Yet Yale-NUS will not be free and open in the way American students may expect.

Singapore bans speech deemed to promote racial or religious strife. As long as they toe that line, students will be free to hear speakers and express views inside campus buildings. But many outdoor assemblies will require a government permit, Yale-NUS President Lewis said. Singapore law defines "assembly" quite broadly, to include a single protester holding a sign or an open-air debate.

"Can you march on City Hall?" asked Bailyn, the Yale-NUS dean. No, he answered -- but said that didn't trouble him, as "that's not really an educational matter." Bailyn said he had been promised complete freedom with "the core mission of the college -- researching, teaching, unfettered discussion."

Indeed, Yale-NUS faculty say they expect Singapore to be cautious about interfering with the new college for fear of provoking an incident and prompting Yale to withdraw its name.

"We know what a liberal arts education is, what intellectual freedom is," said Keith Darden, a professor of social sciences at Yale-NUS, "and we'll accept nothing less than that for ourselves and our students."

Under the philosophical questions lies a pragmatic one: Will the new college succeed?

For all its wealth, Singapore has not always proved an ideal marketplace for higher education. Australia's University of New South Wales opened a campus in Singapore in 2007 -- only to shut it after one semester because of low enrolment. This fall, NYU announced it would close its graduate film school in Singapore because of financial trouble.

Other American ventures in Singapore have done better, including a music conservatory developed by Johns Hopkins University.

Interest in Yale-NUS is running high. Almost 2,600 students from around the globe have applied for the initial 150 spots. Several dozen have already been accepted -- among them, Singaporean students who suggest Yale's faculty might do well to back off the criticism and trust in the value of the liberal arts education they hold so dear.

"Ideological purity and moral righteousness from these critics will not make Singapore a free society, but education and the spread of ideas will," Jared Yeo, a Singapore native accepted to Yale-NUS, wrote on the college's blog.

Perhaps the most pointed critique of the New Haven protests came from E-Ching Ng, a Singaporean who earned an undergraduate degree at Yale and remained on campus to study linguistics. In a column in the Yale Daily News last spring, she urged faculty to respect the rules Singapore has developed to maintain public order.

"Qur'an burning is illegal in Singapore, and we like it that way," she wrote. "We prioritize our values differently, and different doesn't mean wrong. At least, that's what I learned from a Yale liberal arts education." (Reporting By Stephanie Simon in New Haven. Additional reporting by Kevin Lim in Singapore. Editing by Jonathan Weber and Douglas Royalty.)

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Qatar Airways files $600 mln claim over new airport

DUBAI | Mon Dec 31, 2012 5:11am EST

DUBAI (Reuters) - Qatar Airways said it was filing a $600 million legal claim against a contractor for a delay in opening a new international airport in Doha.

Lindner Depa Interiors, a German-Dubai joint venture DEPA.DI, holds a $250 million contract to build 19 airport lounges by the middle of 2012, Qatar Airways said in a statement on Saturday.

In a statement later in the day, LDI said it had not received a legal claim from Qatar Airways and described the carrier's allegations as "false and misleading".

It said it was not able to meet its original completion deadline because it was denied full access to the project site for the first nine months of a 16-month contract.

LDI also said it had no contractual relationship with Qatar Airways and that it was in arbitration with its client on the project, New Doha International Airport. Qatar Airways will run the airport when it becomes operational.

The $15.5 billion airport in the Qatari capital will be the hub for the airline, which has grown to a fleet of 116 aircraft since its launch 15 years ago. The new airport was scheduled to open this month but is now expected to start operating in late 2013, Qatar Airways said.

It said Doha's existing airport had reached capacity and the delay in moving to a new facility was hindering the company's expansion plans.

LDI is a joint venture between Lindner Group and Depa United Group DEPA.DI. (Reporting By Praveen Menon; Writing by Angus McDowall; Editing by Robert Birsel and Jane Baird)

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Passengers on Queen Mary 2 sickened by unidentified pathogen

By Sharon Begley

NEW YORK | Mon Dec 31, 2012 5:29am EST

NEW YORK (Reuters) - An unknown illness, suspected of being a norovirus, has sickened 194 passengers and 11 crew members aboard the luxury cruise ship Queen Mary 2, causing vomiting and diarrhoea, federal health officials said on Friday.

Earlier in the week, 189 passengers and 31 crew members on the Emerald Princess came down with the same symptoms.

The symptoms are those of norovirus, a contagious microorganism that can be acquired from an infected person, contaminated food or water, or by touching contaminated surfaces, according to the U.S. Centers for Disease Control and Prevention.

Norovirus causes an inflammation of the stomach or intestines called acute gastroenteritis, producing stomach pain, nausea and diarrhoea, and is the most common cause of acute gastroenteritis in the United States.

Each year, norovirus causes some 21 million illnesses, of which 70,000 require hospitalization. It kills about 800 people a year, the CDC says.

The Queen Mary 2, with 2,613 passengers and 1,255 crew members, is now docked in Saint Lucia in the Caribbean, according to ship owner Cunard Line, which is owned by Carnival Corp (CCL.N). The cruise left Brooklyn, New York, last Saturday and is due to return there next Thursday.

The CDC learned of the illnesses on the QM2 on Christmas Day on Tuesday, and of those on the Emerald Princess last Saturday. Vessels are required to notify the agency when 2 percent of those on board develop a gastrointestinal illness.

Although the microbial culprit remains unclear In both cases, another reason to suspect norovirus is that the pathogen "has affected a number of schools, hospitals, nursing homes and children's day care centres this winter" in the United Kingdom, Cunard said in a statement.

The UK's Health Protection Agency reports that norovirus activity in the country is 83 per cent higher than last year.

The QM2 sails regularly scheduled crossings between New York and Southampton, England, between April and late November, Cunard spokeswoman Jackie Chase said in an email. "In addition, many of our guests come from the UK."

The QM2's captain is advising passengers with gastrointestinal symptoms to report to the medical centre, Chase said. Those sickened are asked to "isolate themselves in their cabin until non-contagious. They are also asked not to proceed ashore, and any shore excursion costs will be refunded. Room service is provided to affected passengers and every effort is made to make them as comfortable as possible."

Of the 194 QM2 passengers who had fallen sick, said Chase, all but 12 had recovered as of Friday.

'NOROVIRUS ACTIVE ON BOARD'

In a post on the message board cruisecritic.com on Wednesday, a woman who said her daughter was on the QM2 said she "just received a message from her indicating that the Norovirus is active on board."

On Thursday, someone reporting being on the ship posted that "the restaurants are still full. The Captain last night recommended that people take all of their meals in the full-service restaurants rather than the buffet, but the buffet remains open as of this morning. We've been kept informed daily of the persistent cases."

Another post said: "The crew are working like crazy to service all the guests. At lunch today I noticed the hand rails on the promenade deck were wiped three times in about 1 hour."

In response to the outbreak, the QM2 crew has increased cleaning and disinfection procedures, the CDC said, and is asking passengers and crew to report cases of illness and "encourage hand hygiene."

Medical personnel are also collecting stool specimens from ill passengers and crew, which a CDC lab will analyze to make a definitive diagnosis.

When the QM2 docks in Brooklyn, an officer from the CDC's Vessel Sanitation Program and an epidemiologist will board, conduct an environmental health assessment "and evaluate the outbreak and response activities," the CDC said.

Two officers boarded the Emerald Princess, also owned by Carnival, when it arrived in Fort Lauderdale, Florida, on Thursday and are conducting an environmental assessment.

The Vessel Sanitation Program has authority to inspect cruise ships that carry 13 or more passengers and call at U.S. ports. It gave the Queen Mary 2 a perfect 100 on its most recent inspection this past summer, but found a few minor infractions, including a lack of serving utensils with breakfast pastries at a buffet.

(Reporting by Sharon Begley; Editing by Peter Cooney)

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