Negotiations into a possible land swap between Morgan's Point and Southlands have received a cautious welcome from Opposition politicians and sustainable development campaigners, but the big question is: who is going to pay for the clean-up?

As talks continue between Government, developers Southlands Ltd. and the Jumeirah Group, the environmental remediation of Morgan's Point remains the prime issue, according to Opposition MP Dr. Grant Gibbons.

Estimating costs in excess of $25 million, Dr. Gibbons says that ultimately, any hotel development on the 260-acre peninsula could end up costing $1 billion.

Dr. Gibbons was involved in negotiations with the US government over their former Naval Air Stations at Morgan's Point (Southampton Naval Annex) and Southside (US Naval Air Station, Kindley Field) in his post as Management and Technology Minister in the mid-1990s.

The US paid $11 million in 2002 to replace Longbird Bridge, but has refused to pay compensation for a clean-up of its base lands and the environmental waste left behind.

Yesterday, Dr. Gibbons said that any development of Morgan's Point would first have to examine the removal of hazardous waste.

This includes asbestos, heavy metals and chemicals, as well as 500,000 gallons of jet fuel and a layer of viscous oil floating on the surface of the salt water in Bassett's Cave.

And as the land is leased by the Bermuda Land Development Company (BLOC), any development may also require an Act of Parliament.

"You're really dealing with a property which needs significant remediation. There are a lot of large environmental issues that need to be dealt with first. To somehow suggest you can put a stand-alone hotel up there without dealing with the rest of it just doesn't make sense," said Dr. Gibbons.

He explained that there are 130 underground storage tanks sitting at Morgan's Point and the former US base at Southside as well as container tanks on the surface. Used to store petroleum products such as lubricating oils, diesel, kerosene and jet fuel, over time these tanks have developed cracks and corrosion, resulting in leaks.

At Morgan's Point a plume of more than 55,000 gallons of jet fuel lies above the water table.

"There's a small lake of thousands of gallons of jet fuel just floating on top of the groundwater there," said Dr. Gibbons.

Morgan's Point also has concrete sea plane ramps and reinforced buildings with walls several feet thick in places so as to withstand aerial bombardment.

The units are also full of asbestos, further complicating the demolition process.

The most challenging clean-up however is Bassett's Cave, which presents "a complex environmental remediation problem".

Dr. Gibbons said: "For over 40 years it was used as an industrial dump site. Everything from sewage and heavy metals to petroleum and waste oil was dumped there."

Any remediation work would have to pump out a two foot layer of viscous oil on top of the salt water as well as the sludge beneath it. The walls of the cave would then have to be scrubbed down.

In 1997, a report by independent consultants the J.A. Jones Environmental Services Company estimated the costs of cleaning up Morgan's Point at $15 million.

"That was ten years ago, so now my rough guess, taking inflation at five percent, would be that you're probably looking at around $25 million now," said Dr. Gibbons.

In the report, J.A. Jones describes the difficulty of cleaning up Bassett's Cave.

"The cave was used by the US military as a disposal well for industrial waste and raw sewage. Its central chambers contain deep pools — tar pits, in effect — of waste oil and other petroleum products floating and washing through the cave system.

"Extensive evidence of toxic metals such as mercury, lead, cadmium, chromium and copper have also been identified. Caves are a protected natural resource in Bermuda."

Another hurdle according to Dr. Gibbons, is that any development at Morgan's Point would require an Act of Parliament.

The BLOC was set up in 1996 to manage the redevelopment of the US base lands and the company holds the long-term lease.

Dr. Gibbons said: "There's a difficulty between private property which is what Southlands is, and Government property which is what Morgan's Point is, so one of the other issues Jumeirah Southlands would have to deal with is the leasing of that property.

"At the moment in order to lease that property from the BLDC, it requires an Act of Parliament so you've got a lot of bureaucratic issues which would make it a lot more complicated.

"I feel most Bermudians would feel that this is something that should be put out to tender. Why should it just be handed over to a developer without getting the best possible deal for the site first."

Dr. Gibbons said: "The concept of a swap may sound nice, but you've got very different types of development there.

"Why give up a pristine site on the South Shore (Southlands) where you have none of the costs and questions over a brownfield site, for something a lot more complicated?

"You've got 260 acres at Morgan's Point and Southlands is 37 acres, so it's a very different order of magnitude in terms of cost. With Southlands you may be talking in the region of between $25-$50 million, whereas at Morgan's Point you're probably looking at $1 billion in terms of scale and development, in terms of costs, and building and construction as well.

"When you add all the issues you're facing at Morgan's Point, I think it becomes a very difficult issue."

Dr. Gibbons is however, in favour of the former base land being developed. "I think it is something we should do," he said. "You've 260 acres of prime Bermuda real estate up there, but you can't do it on a piecemeal basis, because of the extent of environmental contamination.

"This would slow down the development of a hotel for at least a couple of years, just for all the demolition and environmental work.

"I think you're looking at at least a couple of years before you can build a hotel or residential property on it."

The Royal Gazette asked Environment Minister Neletha Butterfield whether she would support a land transfer at Morgan's Point and whether Government would then turn Southlands into a national park.

Ms Butterfield said: "I haven't discussed that with the Government. As it is I am sure they would put out questionnaires to people to see what they would want. We always like to go to the public with our ideas."

She added that the Special Development Order for Southlands could be transferred over in the negotiations.

"The land (Southlands) is zoned as tourism. If the owners want to look into changing the zoning they can put in an application to change that," she said.

Government would not comment yesterday on who would bear the remediation costs for Morgan's Point.

A spokesman said: "It would be inappropriate to comment at this time as negotiations between Government and the developer are ongoing."