Any cash Bermuda Hospitals Board has to borrow as part of the hospital rebuild will count against Government's debt ceiling, the Ministry of Finance has confirmed.

Health Minister Walter Roban had told a press conference Government's guarantee to finance the redevelopment would not be treated as debt and "hence will not impact the debt ceiling", which currently stands at $1.25 billion.

However, when told this appeared to contradict previous statements on the subject, Assistant Financial Secretary Anthony Manders told The Royal Gazette: "I can confirm that, just like any other Government guarantee, if the BHB has to borrow funds to meet the obligations under this project then these amounts will be counted against the debt ceiling."

Under a private-public partnership, BHB will foot $55 million for the rebuilding of King Edward VII Memorial Hospital, with a private firm paying around $260 million; three firms submitted their final bids last week.

Last month, Parliament passed legislation stating clearly that Government has power to guarantee the debts and other obligations of third parties.

Speaking to this newspaper shortly before Cup Match, Mr. Manders said the final terms of the BHB guarantee would be finalised when a project agreement has been signed with the successful bidder.

The United Bermuda Party has frequently complained as Government has raised its debt ceiling in recent years.

In 2008, the borrowing limit went up from $375 million to $550 million; last year it climbed again to $1 billion; and this February it was lifted to $1.25 billion.

Government's debts and guarantees outstanding includes a $200 million guarantee of Butterfield Bank's preference share issuance last year, which counts as a liability even though it has not been paid out.