Government should offer tax concessions to lure overseas manufacturers to the Base lands, the president of Bermuda's Chamber of Commerce said yesterday.

"That's basically a positive trade-off, because it's going to generate employment,'' Mr. Robert Rego told The Royal Gazette .

Mr. Rego said the return of the US Naval Air Station at St. David's and the US Naval Annex in Southampton represented "a tremendous opportunity'', but "it has to be planned very carefully''.

To attract manufacturers that would create jobs, Government would likely need to grant concessions, due to Bermuda's high labour costs, Mr. Rego said. They could include relief from land tax or from duty on imports of equipment. "In order to encourage overseas firms, there are going to have to be some concessions given them,'' he said.

Preferably, Mr. Rego said many of the lands would be developed by partnerships formed between Bermudian and overseas companies.

The manufacturing he envisioned was light industry, perhaps related to computers, telecommunications, or assembly of high tech equipment. A duty free area in which products could be made for export only could also be part of the plan.

Mr. Rego's comments came as Government Ministers warned that the American Base lands would have to largely be used to make money for Bermuda.

"That can not all be used by Bermudians for Bermudians' recreational purposes,'' said Deputy Premier the Hon. Irving Pearman. "We've got to find ways to generate hard currency.'' Not only is the closure of the US, British, and Canadian Bases taking an estimated $50 million a year in benefit out of the Bermudian economy, but the Airport which the US Navy has returned to Bermuda is costing Government an extra $20 million a year to operate.

Meanwhile, information released by the Base Transition Office show that Bermudian contractors are beginning to see benefits of the transfer of work from the US Navy to Government control.

Management and Technology Minister the Hon. Grant Gibbons has said about $8 million in work will flow to local companies this year alone.

Island Wide Security has won an Airport security contract, Bermuda Tech Ltd.

is building the new Airport fence, Barker & Linberg and Woodbourne Associates are working on the Base utilisation report with EDAW of London, Belco is working on a high-voltage upgrade with Boston-Edison, Telecom (Bermuda) Ltd.

is providing two-way radios for security and airfield work, Bermuda Aviation Services is providing vehicle and plant maintenance, Jo-Car Ltd. is providing grounds maintenance, Bermuda Water Consultants Ltd. is carrying out an asbestos survey, Atlantic Water Development and Woodbourne Associates are providing well drilling and surveying for an environmental study, Leo Seymour Construction is renovating the Airport control tower, Island Construction is doing iron and rust work on the radar tower, and Solid Rock Construction is doing weather office carpentry.

Contracts for pest control, janitorial services, airfield apron and runway maintenance, highway and pavement maintenance, painting, and water and sanitary systems are among those still to be let.