The Minister of Public Works denied that the Bermudiana Beach Resort was a “failed project” as he defended a recent announcement the Government had pulled out of the deal for it to become a boutique hotel.

The 94 units of the resort will instead be put on the rental market once construction is complete at the end of this year.

Lieutenant-Colonel David Burch was speaking after Craig Cannonier, the Shadow Minister of Public Works, condemned the Government’s decision to rent out units at the Bermudiana Beach Resort as homes at prices out of reach of less well-off Bermudians.

Colonel Burch revealed previously that rents were expected to start at $3,000 per month for a studio, rising to $7,000 for a three-bedroom apartment, and were targeted to young professionals and couples.

He said Mr Cannonier’s remarks on Friday showed “amnesia” because, as a former public works minister, he would have been responsible for the property during the One Bermuda Alliance administration.

Colonel Burch said more revenue would be generated by rental accommodation than a hotel, with less risk.

He added: “We have indicated that those on the Bermuda Housing Corporation list will be reviewed so that some of them may take advantage of this opportunity as well as some guest workers to ensure sufficient revenue is raised to service the outstanding debt.”

Under the previous model, condos sold to overseas buyers could be occupied for up to 90 days a year.

The suites would be rented for the rest of the year as tourist accommodation by Hilton Hotels, which had branded the resort as a luxury hotel in its Tapestry Collection.

Colonel Burch said last week that the Government would have to pay a “break fee” of less than $500,000 to Hilton Hotels for pulling out of its contract with the operator.

Responding to Mr Cannonier’s comments, the minister said that he did not wish to put the exact amount into the public domain.

He added: “It is significantly below that price. However, I don’t want to publicise it without some collaboration with Hilton.”

Colonel Burch defended having the residential units open to foreign workers.

“While Bermudians and Bermudian families will be eligible to rent these units, I do not see it as a negative either that guest workers will also be eligible,” he said.

“Everyone agrees, that part of the challenge that we are facing is that we need more people in the island.

“And you cannot have more people here if they do not have anywhere to live.”