The Ministry of Tourism's budget has been cut by $5 million, but other ministries will be investing $28 million to help improve the tourism product.

Overall, Government has allocated $20 million to tourism initiatives in the capital projects budget and the Ministry of Works and Engineering will be spending $8 million to demolish the former Club Med — though it is still not clear if an agreement has been signed to build a proposed five star St. Regis on the site.

At a news conference after the Budget, Premier and Minister of Tourism Ewart Brown said the Island was preparing for a new tourism era and that promotional programming would be realigned.

And in an apparent reference to the $5 million cut in Tourism's budget Dr. Brown said: "This will mean increased efficiencies in reaching our target and a reduction in the costs associated with acquiring each visitor.

"Our focus will continue to be geared toward the expansion of the season with a view to bolstering arrivals during the Golf and Spa period. We will continue to fish where the fish are but we will do it far more cost effectively."

Earlier Finance Minister Paula Cox announced that $10 million had been set aside in the capital projects budget to finish the second cruise ship pier in the west end, which she said would help establish Dockyard as a first class destination.

She added that Government hoped to enable the redevelopment of the Hamilton and St. George's waterfronts by moving the majority of cruise ships to Dockyard.

She added: "To complement the introduction of the second cruise pier and assist with planning for the future of Bermuda's cruise ship industry, a Hydrographic Survey of Ship Channel and Entrances will be conducted."

Dr. Brown did not respond to a query about whether the shipping channel into Dockyard would need to be widened as a result of the new pier.

The Government is also setting aside another $10 million from the capital projects budget for major renovations to the Port Royal Golf Course, which is consistent with the strategy to promote Bermuda as a leading golf destination Ms Cox said.

And Minister of Works and Engineering Derrick Burgess said his ministry would be spending $8 million to remove asbestos and demolish the former Club Med site.

"This will prepare the site at the earliest possible time so that construction on a new five star hotel might commence," he added.

At an election rally in December the Premier said before the end of 2007 Carl Bazarian, of investment firm Bazarian International, announced that a five-star St. Regis hotel be built on the Club Med site. He added that an agreement had already been signed with respect to the Club Med land.

Mr. Bazarian has made no such announcement and the Premier did not reply to a request yesterday for a clarification about the former Club Med site. He was asked if any agreements had been signed regarding building a five-star hotel on site.

The Opposition has chosen not to comment on yesterday's announcements until their Reply to the Budget at the next House of Assembly session.