The Bermuda Land Development Company is to take over the running of the 198-home Southside building project from Bermuda Homes of People who are insolvent.

If follows the resignation of Clifford Schorer who spearheaded the plan and now is claiming he is owed $733,000.

Housing Minster Ashfield DeVent promised building would still start in May or June and he said work was continuing in moving business tenants from the site at Ship's Wharf.

Asked if Mr. Schorer would be paid Mr. DeVent said it was a matter for Bermuda Homes for People (BHP) and Government did not have to provide funds.

Government stepped in after a report by accountants KMPG showed the plan was on the verge of collapse unless Bermuda Homes for People were given funds.

But at a Press conference yesterday, Mr. DeVent said Government is not going to pay BHP.

Mr. DeVent added: “Government then made the decision it needed to involve the Bermuda Land Development Company with BHP so we could pool the talents in both organisations so together they could deliver the homes to the people of Bermuda.”

He said commitment to the project had never wavered and deposits on homes at Harbourside Village were secured with a law firm.

A memo of understanding is being drafted with BLDC, said Mr. DeVent.

“We do not anticipate this structure will require any interim financing from the Bermuda Government.”

He said BHP had come up with the idea, had the architectural plans and to cut them out of the project now would mean starting from scratch.

The KPMG report, leaked to The Royal Gazette, shows BHP is insolvent after being incorporated just five months ago.

It was set up as a non-profit venture to build 98 affordable homes priced at $199,000 supported by 98 market priced homes going for an average of $673,000.

Operating on a budget of $82.1 million it allowed for a surplus of $3.1 million but with a contingency of $4.3 million built into the budget.

Chairman Richard Winchell said he could not say whether Mr. Schorer would be paid money he is claiming until the board meet this week.

He said: “It's a great project and its going to continue.” Bermuda Homes for People will continue to be part of the project.

He denied the project was being run on too tight a budget and said there was flexibility to overcome any unforeseen circumstances.

Government said yesterday that money from banks and international companies was still in place despite the change in management.

Opposition MP Maxwell Burgess said landlords BLDC had wanted to build homes elsewhere in Southside but Government had rammed the Ship's Wharf project down the company's throats and now the quango was supposed to rescue the plan.

He said BLDC's original plan, which has not been made public, should now be followed with those who had put down deposits given the first option to buy at the alternative site. Attorney General Larry Mussenden admitted BLDC had alternative plans for housing at Southside but Government had preferred BHP's. “It is an exciting project,” he said.