The Government will have to pay almost $130 million in interest on its debt in the new financial year, MPs have heard.

David Burt, the Premier and Minister of Finance, said: “Of this estimate, $127.2 million represents ongoing debt service costs, while $550,000 is allocated for facility fees and other related costs.

“The remaining $2 million is for the costs associated with the management of government’s guarantees.”

He was speaking during the debate on the ministry’s budget in the House of Assembly last Friday.

Mr Burt took a swipe at the Opposition One Bermuda Alliance over its handling of the guarantee for Morgan’s Point, a failed resort development in the West End, when it was in power.

He insisted that “lessons had been learnt” so the Government would not be left with a multimillion-dollar bill when it issued further guarantees.

Mr Burt said: “Considerable work has had to be invested for more than two years to address the issues arising from the call on the $165 million guarantee that was issued by the previous administration for the Morgan’s Point project.

“There are a number of factors that contributed to the project and the remediation work that was required and the costs associated with having to come good on this guarantee have been significant.

“A key lesson learnt has been the importance of insuring that critical risk to the Government of Bermuda – any guarantee arrangements are comprehensively identified, assessed, and appropriately mitigated with adequate resource.”

Mr Burt added “significant work” had been done in the last financial year on the assessment of proposals for the redevelopment of the Fairmont Southampton.

He said that additional funding had been allocated for the new financial year to support efforts needed to make sure work started on the hotel redevelopment as soon as possible.

Mr Burt added: “All such actions will be done consistent with this Government’s commitment to ensuring appropriate and effective risk management, maximisation of economic benefit, and prudent economic and fiscal management.

“Additionally, funds are being set aside to ensure the Morgan’s Point project is developed in a manner that will be cost effective and of maximum economic and social benefit to the people of Bermuda.”

Mr Burt said: “It has already been necessary to spend considerable resources – the guarantee amount was $165 million and there was certainly interest on top of that.

“Contractors never got paid and funds have had to be spent in order to accomplish the goal that was established by the Government of getting our money back.”

Mr Burt added that his administration was committed to diversification of the economy and stabilisation of the country’s debt.

He said: “We have a responsibility to the people of this country to provide the best fiscal management possible and to this end the ministry of finance will continue to make the necessary decisions required to grow Bermuda’s economy and reduce the tax burden on workers.”

Mr Burt admitted: “On the heels of a lasting global pandemic, Bermuda continues to be faced with significant challenges, which if not appropriately managed can damage our economic security and stability.

“To that end, the Ministry of Finance budget has been carefully constructed to ensure the ministry’s in-house team is able to lead the Government’s policies responsibly.”

Mr Burt said that the ministry had received 3,710 applications for Financial Assistance last year and that 3,011 of them were approved.