Bermuda will pay contractor Serco IAL about $13 million over three years to maintain buildings and run water, sewage, lighting and other systems at the former US Naval Air Station at St. David's.

Management and Technology Minister the Hon. Grant Gibbons made the announcement yesterday in the House of Assembly.

The price for the contract is "well below our original estimate,'' Dr.

Gibbons said.

As well as hiring Bermudian sub-contractors, Serco IAL will directly employ 20 Bermudians by mid-June, he said. The company has also promised to train Bermudians and employ all local people by the end of the contract.

Earlier, the Minister had said the infrastructure contract might be more costly than another contract for air operations, which will cost Bermuda $4.4 million a year for five years.

That contract -- which includes air traffic control, weather, flight information, fire fighting, and ground electronics maintenance -- went to Serco Aviation Services Inc., the Canadian subsidiary of the huge UK company Serco IAL.

Both contracts were made necessary by the US Navy's withdrawal from Bermuda between June 1 and September 1.

While infrastructure "may seem simple compared to air operations, . .. I assure you it is anything but,'' Dr. Gibbons said.

He noted the contractor would be responsible for more than 260 buildings and other structures on more than 1,000 acres of land. Runways, taxiways, Airport lighting, and power and water systems were all part of the job.

"Much of it will have to be kept running, some of it will have to be upgraded, some of it will have to be demolished and some of it will have to be mothballed for use another day,'' he said. "There will be a continuing need for garbage collection, air conditioning, plumbing, grounds maintenance, runway sweeping and pavement repairs.'' Government was "aware the selection of Serco IAL might be viewed negatively because of the current air operations contract,'' Dr. Gibbons said. "We were concerned about a possible charge of putting all our eggs in one basket.

"We were also cognizant that some people might accuse us of favouritism towards Serco IAL.'' That was why Government's evaluation team "bent over backwards to make sure we had carefully considered the pros and cons of two closely-related contractors,'' he said.

After advertising in November, Government received six bids, all from overseas firms, with prices ranging between about $12 million and $21 million, Dr.

Gibbons said.

The contenders were recently narrowed down to two. Interviews were held recently with top managers from Serco IAL and an American company, Halifax Corp. of Alexandria, Virginia.

"Our evaluation of their tenders showed the two companies' bids were comparable technically and financially and that they were equally committed to Bermudianisation -- one of our principal goals for the contract,'' Dr. Gibbons said.

Serco's experience tipped the scales in its favour, he said. With 11,000 employees and more than 45 years of international experience in air operations and aviation support, the company "is doing much of the same airfield work elsewhere that we require here.

"For example, it is currently managing and training people in air services and support throughout the Middle East, at RAF Gibraltar, Liverpool Airport, UK regional airports, and the US Naval facility in Diego Garcia,'' Dr. Gibbons said.

Serco will work with Bermuda College to establish training courses and will also send recruits to Bailbrook College in England, he said.

The Base infrastructure will be turned over to Bermuda in three phases, Dr.

Gibbons said.

Fire truck maintenance, runway lighting, and pavement repairs will be turned over on June 1, followed by water and sewage systems on July 1, and the rest on July 31.