Environment Minister Arthur Hodgson said the Government was well on its way to developing a new Bermuda with the new Hotel Concessions Act.

"This creates a new framework within we can work.'' And responding to opposition concerns that developers would not be able to fill jobs created by the hotels, he said that the jobs Government wanted for Bermudians were management-level positions which required training.

"We're not just satisfied with going to work anymore,'' he said.

"These hotels won't have as many employees, but they'll have a higher quality of employee,'' he said.

Tourism Minister David Allen then rose to respond to questions posed by MPs.

He said that duty rebates on alcohol sales at hotels would be based on the ratio of alcohol sales to locals and tourists. Hotels currently selling 70 percent of alcohol to tourists would be rebated 70 percent of the duty paid on that alcohol, he said.

The legislation mandates that the rebate be used to fund local entertainment and that any outstanding balance be returned to Government.

And to calm fears that projects could go uncompleted, he said that backers would be forced to go ahead with joint hotel/condominium projects once the residential units were completed or risk having their concession revoked by Government.

Mr. Allen also outlined the development of Castle Harbour, saying that the existing facilities would be completely demolished as refurbishment costs had proved too high.

"The layout is very inefficient with it taking half an hour to get room service from one end of the building to another,'' he said.

"The building will be demolished in its entirety. Rosewood (the development company) does not work with old buildings.'' He said the new structure would incorporate traditional Bermuda architecture and 18th-century motifs.

Mr. Allen justified the idea of concessions, saying new properties would need "sustenance'' for the first five years before becoming really viable. He said that occupancy tax breaks would become a competitive advantage for hotels and that such breaks would not be given out indiscriminately.

And following concerns from the opposition that a significant amount of tax revenue would be lost, he said that it was better earning some tax from hotels than no tax at all from hotels that sat dormant.

"The whole idea is to grow the economy through these concessions,'' he said.

"It's a big step by the Finance Ministry. In some ways, it's a leap of faith.'' House coverage continues on Page 8 MPs debate Hotel Concessions Act Tourism Minister David Allen -- responding to Opposition questions -- told the House concessions under the new legislation would be available to hotels carrying out refurbishments costing $1 million or $15,000 multiplied by the number of bedrooms, whichever is the highest.

He said this would mean the Southampton Princess would have to spend $9 million on refurbishments before it could qualify.

UBP Shadow Minister David Dodwell said it was "sad day'' that smaller properties such as the Salt Kettle guest house would have to spend $1 million before getting tax breaks for refurbishing their properties.

Progressive Labour Party MP Delaey Robinson , the chairman of the Tourist Board and owner of Aunt Nea's guest house in St. George's, said he was quoted $1.2 million for adding six bedrooms to the property.

He said owners could not spend much less than $1 million to substantially improve their properties and the figure had been set as part of the drive to push the Island further upmarket.

Mr. Dodwell said the criteria for companies applying for concessions was too loose. They should also be required to provide Government with a marketing plan, disclose the source of funds, give details of training plans, feasibility studies, and provide environmental assessments.

But Mr. Allen brushed aside the objection saying this referred only to the initial application and Government did not want to dissuade companies with too much red tape at this stage.

He explained that the hotels would get to keep the occupancy tax for up to five years then pay it to Government.

He rejected claims from Mr. Dodwell that it was unethical to tell guests they would be paying the tax when it would not go to Government. Government was merely allowing the hotels to defer the payment.

Mr. Dodwell claimed hotels were "salivating'' at the thought they could qualify for these concessions.

But he predicted some owners would be disgruntled if they are turned down because the Minister does not have to give reasons for rejecting an application.

Mr. Dodwell said there was confusion about how the alcohol concessions would apply because the regulations state the drink is to be consumed by hotel guests.

He questioned whether this alcohol could be served to Bermudians coming in for a drink or to alcohol served on beaches or boat trips organised by the hotels.

Mr. Dodwell also said it would be impossible for Government to quantify the amount of alcohol consumed in hotels by locals and tourists.

But Mr. Allen admitted that the 70 percent figure was a "ballpark figure'' that a special committee had agreed on.