(Repeats Sunday story with no changes)
* Nepal faces season without successful Everest ascent
* Death of 16 sherpas in accident sparks crisis
* Climbing world's highest peak now big business
* Sherpas demand more reward, costs may rise further
By John Chalmers and Gopal Sharma
KATHMANDU, April 27 (Reuters) - Blogging from Everest base camp after 16 sherpas were killed by an avalanche, American climber Ed Marzec lamented: "I am shamed by our greed and embarrassed by our lack of compassion."
Expressions of sympathy and regret were not enough, however, for the Nepali guides who take breathtaking risks to help Western clients scale the slopes of Everest and realise the ultimate conquest.
There was fury among the roughly 400 sherpas at base camp after the April 18 accident on the perilous Khumbu icefall, the single deadliest disaster on the world's highest mountain.
Chanting, pumping their fists and threatening violence, a group of young sherpas forced an expedition boycott that now looks almost certain, for the first time, to write off a whole season for hundreds of would-be summiteers.
The sherpa backlash, which had simmered for years as a cut-throat business expanded, could deal a blow to the commercial expedition industry that took off in the mid-1990s - pushing costs for climbers even higher.
At the top of the Everest supply chain are "clients" from around the globe who pay tens of thousands of dollars to Western mountaineering firms. Then there are Nepali middlemen and the government who take a cut, shoestring local agents, and finally the guides, who can earn as little as $1,000 a season.
Much of the sherpas' anger was directed at the Himalayan nation's government, which receives a $10,000 "royalty" from every Everest climber in a group of seven. After the accident it announced a payment of around $400 to the victims' families to cover funeral costs.
"This is something of a wake-up call for the government," said expedition leader Phil Crampton of New York-based Altitude Junkies, who flew last week from base camp to Kathmandu, the capital, for emergency talks with officials on the sherpas' clamour for compensation and higher insurance cover.
"It is a crisis moment for Everest, and a crisis moment for Nepal," said Crampton, his face sunburnt from having joined the team that retrieved the bodies of sherpas battered by enormous blocks of ice on the glacier above base camp.
The sherpa resentment is not aimed at the government alone.
Three European climbers abandoned their ascent to the 8,850-metre (29,035-foot) summit last year after a brawl with a group of sherpas during which their tents were pelted with stones and punches were thrown.
And last week many sherpas were outraged that Crampton and another prominent mountaineer, New Zealander Russell Brice, had presumed to intercede on their behalf with the government.
"SOME OUTFITS WILL TAKE ANYONE"
The big business that is now Everest stands in stark contrast to the simplicity of Edmund Hillary's expedition in 1953, when he and sherpa Tenzing Norgay became the first climbers confirmed to have reached the highest point on earth.
No one would argue that following in their footsteps along the same South Col route 61 years later is easy. But climbers today can count on bigger teams of sherpas, accurate weather forecasts, sophisticated gear, rescue helicopters, satellite phones and steroids to avert high-altitude disorders.
More than 250 people have died trying to climb Everest, which straddles the border between Nepal and the Chinese region of Tibet and can be scaled from both sides in a season that is cut short in late May by rain clouds cloaking the Himalayas.
But it has become gradually safer, according to climber and writer Alan Arnette, who says the death-per-summit ratio dropped from 5.6 percent in the 1990s to 1.5 percent in the 2000s.
That has attracted recreational climbers to sign up for expeditions with major Everest guide companies, known as "wholesalers", which charge clients between $40,000 and $90,000, depending on the number of guides and other services they want.
In a recent blog on the cost of scaling Everest, Arnette said the most expensive companies provide Western guides - who can command $10,000-$35,000 a climb, according to two Western professionals - and some offer gourmet food, with one promoting its sushi and another a five-star chef.
Jon Krakauer, whose book "Into Thin Air" told the story of a vicious storm that killed eight people on Everest in 1996, wrote last week that the statistics give Western novices a false sense of security about "a preposterously dangerous undertaking".
And before he died in 2008, Hillary himself voiced disdain for the modern processions to the top of Everest.
Elizabeth Hawley, a highly respected chronicler of climbing in Nepal, says that she now comes across people setting out for the summit who have never climbed a mountain.
"Sometimes clients fake their qualifications. And some irresponsible wholesalers will take anyone," said U.S.-born Hawley, who arrived in Nepal over half a century ago and still, at the age of 90, collates data at her Kathmandu home.
Crampton said Altitude Junkies takes only experienced clients: the 12 in his team at base camp this month had accomplished 41 climbs of more than 8,000 metres between them.
MONEY RAISED ABROAD
What clients don't see is the contract that the wholesaler is obliged by regulations to take out with a Nepali agency, which arranges everything from airport transfers and domestic flights to permits, porters and oxygen bottles.
According to one local operator, who showed Reuters a contract on condition he not be named, a wholesaler that charges its clients $50,000 might typically pay him $35,000.
Wongchu Sherpa, an Everest summiteer who now organises expeditions, charges about $37,000 per climber with two sherpas, making a profit of $2,000-3,000 on each client.
Sitting at the Rum Doodle restaurant in Kathmandu, where the ceilings and walls are festooned with yeti-sized cardboard footprints scrawled with the names and comments of climbers, he said the industry is geared to make clients pay.
"Sometimes people think that if they pay more money that means they have a better chance of reaching the summit," he said from the top floor of the famed restaurant in Thamel, a thicket of narrow streets crammed with backpackers, trekking gear stores and eateries serving 'momo' dumplings and 'Everest' beer.
He said the wholesalers "make a lot of margin", which is justified because they have marketing skills that local firms lack, but the government has no visibility of money raised abroad that fails to find its way to Nepal.
Mountaineering is a key part of Nepal's tourism industry, which accounts for about four percent of GDP in a nation whose desperate poverty is hard to miss, even in the capital, a dishevelled and polluted low-rise city with potholed roads.
"We are concerned that they are taking more money there and paying less here," Tourism Minister Bhim Acharya told Reuters. "We would like to tackle it ... but not make an issue of it now."
Crampton said climbers spend heavily at stores and hotels in Kathmandu, at cafes up to base camp, and on helicopters. "Pretty much all the money goes into the country," he said.
WHERE DOES THE MONEY GO?
Prachanda Man Shrestha, a tourism expert who was formerly in charge of Nepal's mountaineering department, said wholesalers force price-cutting competition on local agents, who in turn squeeze the sherpas.
Some locals have become wealthy, however, running businesses that stretch from mountaineering to hotels and private planes.
"There are very strong and powerful people in the agencies," said a senior government official, who declined to be named. "All political parties have contacts with them for donations. If you have contacts, you can get contracts."
The government says mountaineering is free of graft, and that it sticks to a rule that 30 percent of the climbing fees is ploughed back into development of the Everest region. It collected $3.3 million this year from 334 registered climbers.
Many sherpas, however, believe that the government - as one Nepali newspaper put it last week - views the Everest industry as simply "a milk cow" and cares little about their welfare.
Climbers, for their part, complain that the government has failed to provide a liaison officer for each team at base camp - as agreed after last year's scuffle on the slopes - even though they are charged for it. They said there were 39 expeditions there recently but only three officers, even as tensions mounted among the sherpas.
"They really don't have much to do," said Crampton. "A lot of money goes through the ministry of tourism ... where does it all go?"
"CORRIDOR OF CALAMITY"
Sherpas, an ethnic group who live mostly in the Himalayan mountains of Nepal's eastern regions, have always been the backbone of Everest expeditions, fixing ropes and ladders, carrying packs and cooking for climbers.
They will often make 20-25 round trips to take kit and supplies to advanced camps, which exposes them to greater risk than their clients. A team of "Icefall Doctors" faces the most danger, setting routes across the ever-moving Khumbu Icefall, which Californian guide Adrian Ballinger describes as a "corridor of calamity".
Depending on their loads, bonuses and tips, most sherpas earn between $2,000 and $8,000 per season, and a few with exceptional skills are paid as much as Western guides.
However, Ballinger told Reuters after giving up on his own expedition following the tragedy that many operators "at the bottom end of the business" pay sherpas less than $1,000 and insure them for the minimum set by Nepal's government.
Marzec, a 67-year-old lawyer from Los Angeles who had already forked out more than $100,000 by the time he reached base camp, believes climbers exploit competition among sherpas to keep their fees down.
The idea that foreign climbers have always had a callous disregard for local porters is captured in a recent account by author Wade Davis of a 1922 attempt on Everest by Briton George Mallory. When seven porters were killed in an avalanche, the message sent down from the mountain was: "All whites are safe!"
Still, a member of that same expedition later wrote: "Why, oh why could not one of us, Britishers, share their fate?". And so it remains today that, while some recreational climbers barely know the names of their guides, professionals feel a brotherly affection for the sherpas.
ESCALATION OF COSTS AHEAD
That attachment stems in part from the traditionally stoical and gentle nature of the sherpa. But what puzzled many climbers at base camp last week was the aggression of a younger group they described as "politicised".
Brice, the New Zealander, says many guides now come from other regions of Nepal - including parts that were plagued for years by a Maoist insurgency - and are sherpas by profession rather than ethnic group.
"We are seeing young boys from remote rural villages," he said after his crisis meeting with the government in Kathmandu.
There have been no suggestions that the past week's tragedy and base camp drama will derail commercial climbing of Everest, but together they could bring an escalation of costs.
Arnette said sherpa fees would inevitably have to go up and helicopters may be used in future to ferry gear above the Icefall, forcing up prices for clients whose number may dwindle because of increased costs and a greater awareness of risks.
"Climbing in Nepal has changed forever," he said. (Writing by John Chalmers; Editing by Mike Collett-White)