Morgan's Point is to become Bermuda's fourth main residential hub after Government gave up on grand leisure complex plans which never materialise.

Works and Engineering Minister Terry Lister said the Department of Planning was conducting a study which will go to Cabinet to sanction the new development plan.

Asked what the new site would look like he said: “You have another small town, in the West End you have a Dockyard-centred town anchored to the Southampton stretch by the Morgan's Point.

“Then you go into Hamilton and St. George's. We will have these four towns... these four recognised villages in Bermuda as we go forward.”

The former Naval Annex at Southampton has been empty since 1995 when the US pulled out but Bermuda Land Development Corporation have failed to sign up a developer.

One sticking point has been who was responsible for removing raw sewage and thousands of gallons of oil in underground caves.

The blank canvas at Morgan's Point would allow the new town to be carefully organised said Mr. Lister.

“That excites me. It's virgin land, obviously it's a dirty site to some extent. But it's a virgin in that there are no people there.

“Under the new scheme of things we are looking at something similar to what we are doing in Dockyard.”

He said under that model a master plan was devised and private entities fitted in where they could rather than one developer handling the whole thing.

Similar approaches were working in Southside said Mr. Lister where there would be a fully developed town by 2010 or 2015.

Mr. Lister said forward planning would decide on how many houses would be built but, he said, waterfront properties would be incorporated on the 250 acre site.

“We should be able to provide for every sector of Bermuda on that site. That's what we are doing at Southside.

“I am not prepared to commit myself to some idea in the sky that someone's going to develop some day out there. I want to get my feet out on the ground and get on with it.”

Rival developers have been hoping to transform the contaminated base into an up-market marina, golf, leisure and housing complex, but the latest bid collapsed last summer.

Mr. Lister said the Progressive Labour Party had been justly criticised for following the previous Government's plans for the land which juts into the Great Sound.

“I found the two developers there, one had been rejected, the other was still sort of on the table and I had to work with them over a number of years.

“The real problem was not that they were incapable, not that they would never have got the money. The problem was the project was simply way to big for a little island like Bermuda.

“When you get that big a percentage of the Island going on one project and you have guys running around trying to get partners and associates and there's the big question mark over clean up - all of that made the project too hard.”

Government pulled the plug on plans by Morgan's Harbour Investment Limited to develop the former United States Naval annex into a golf, marina and residential development in 1999 because it claimed the proposals were “in limbo”.

Another company, BEAM Ltd., led by Alan Burland of BCM McAlpine, was then given a 90-day exclusivity agreement, but that ran out in November 1999.

But Mr. Lister did not want to discuss who would now pay for the environmental clean up.

He said: “We are going to move that site forward. How the environmental side gets handled and paid for in the end, we will address as we get there.

“But we are confident we are going to go forward with development on that site.”

However hotels were not part of the plans because Mr. Lister said there were plenty of plans elsewhere on the Island, including Belmont, Tucker's Point, Palmetto and Lantana.

The minister said hotels which had reinvested recently under the Hotel Concessions Act should get the opportunity to fill their rooms to get their money back.

“It's only fair that they should.”