Disaster strikes again in New Orleans

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Even before it struck the mainland, Hurricane Rita served notice of its might yesterday, sending out bands of rain and tidal surges that caused disastrous new flooding in New Orleans, and indirectly causing the death of 24 elderly patients, who perished in a bus fire as they fled north to escape the storm.

The victims, all residents of a nursing home south of Houston, died after a series of explosions on the bus; leaving it a fiery wreck blocking the jammed highway leading north, 17 miles south of Dallas. They were part of a the largest peacetime exodus in modern US history, which saw an estimated 2.7 million people leave south-eastern Texas for safety to the north and west.

The bus burst into flames after several oxygen canisters used to treat the patients exploded. Police and rescue crews rushed to the scene, but only 14 people were pulled out alive. The accident caused huge new jams, adding to the miseries caused by widespread petrol shortages and excruciatingly slow bumper-to-bumper traffic.

But, by midday yesterday, the evacuation was almost complete ­ indeed some were returning to the city as the course of the storm edged to the east, diminishing the threat to Houston itself. The latest forecasts had Rita ­ less ferocious than 48 hours ago but still a dangerous category 3 storm with winds of 125 mph ­ making landfall early today close to the Texas border with Louisiana, some 80 miles east of the city.

The shift means that America's fourth largest urban area, with a population of 4 million, will lie on the less brutal western side of the storm. But Houston's good fortune meant new calamity for New Orleans, just four weeks after the city was devastated by the levee breaches caused by Hurricane Katrina .

Suddenly, New Orleans found itself perilously close to the heart of the storm and even before the worst of Rita's weather arrived, a levee protecting the low-lying ninth ward of the city broke in three places, sending vast quantities of water gushing back into a city still one third flooded.

"Our worst fears have come true," Major Barry Guidry of the Georgia National Guard said. "These breaks were substantial at daybreak, and they've grown larger." The risk also grew of a higher tidal surge, placing additional strains on the hastily repaired defences. By midday tides were already between three and four feet higher than normal.

Houston meanwhile has been reduced to a ghost metropolis. At what is normally the peak morning rush hour on Friday, the streets in the downtown skyscraper district were completely empty apart from a few police cars. In a region which accounts for 2 per cent of the entire US economy, almost every business has closed ­ from huge refineries and petrochemical complexes and the Nasa space centre to the smallest restaurants and corner stores. Malls, garages and homes were bolted and boarded, braced for the looming weather onslaught.

Equally deserted was the island city of Galveston, 45 miles to the south, which was wiped out by the great storm of 1900. At least 6,000 people died in what is America's deadliest natural disaster. This time, the 58,000 inhabitants took no chances. By yesterday afternoon, only a few hundred remained.

Though its power seemed to be relenting, the hurricane remained a colossal weather system, with tropical storm conditions stretching 350 miles across. ­ and for the unfortunate localities that take a direct hit, the consequences could be catastrophic. Texas officials warned that the entire city of Port Arthur, close to where Rita is predicted to make landfall today would be flooded by a storm surge of 20ft.

Overall, Rita is set to affect 5.2 million Texans in 1.8 million households, destroy 6,000 homes and cost the state a minimum of $8.2bn (£4.3bn). Damage to oil and other industrial installations however could send the bill far higher. "Be calm, be strong, say a prayer for Texas," Rick Perry, the Governor of Texas, urged.

The storm's economic impact is already huge. In the two states, 15 oil refineries have already been shut down, with a daily loss of more than 2 million barrels a day of petrol. Almost a third of US refining capacity is now down, all but guaranteeing a sharp new jump in petrol prices.

Rita's threat is fourfold: not just savage winds, tornadoes and tidal surges, but also flooding rain. Some forecasters say the system will grind to a standstill in the days after it makes land. In that case, parts of northern Texas could receive 20 inches of rain or more, they warn.

The military has been mobilised; 1,000 marines are on board amphibious vessels ready to lead rescue operations, and 10,000 National Guardsmen on Texas are on stand by.

When Katrina struck, President Bush lingered on holiday at his Texas ranch, and travelled to political events in Arizona and California. Yesterday he cancelled a planned trip to Texas for fear of interfering with relief preparations, heading instead to the homeland defence command in Colorado to supervise operations from there.