Weeks after Government announced the Bermuda Land Development Company would take over the 198-home Southside building project, a deal has yet to be signed.

And sources involved with the project have said the Bermuda Housing Corporation has now been approached to take it over.

Government stepped in last month when Bermuda Homes for People (BHP), which is running the project, was declared insolvent.

It was decided not to give BHP any more cash but have the organisation work under the umbrella of the Bermuda Land Development Company which owns the site at Ship?s Wharf, St. David?s.

However, the delay in signing a new deal means BHP cannot afford to employ architects or engineers which could further delay the project which was originally supposed to start in January.

Sources have said funding for the project has been held up because the banks are unwilling to loan money to BHP until it gets a lease but a lease cannot be obtained until BHP get vacant possession after the business tenants move out.

BHP chairman Richard Winchell said he could not say when building would start.

However he said six prefab warehouses had arrived to take the business tenants who are currently on the site. They are expected to have moved by June.

Mr. Winchell told : ?We are still working closely with Government and I am optimistic we will have a deal.?

Property developer Clifford Schorer, who spearheaded the plan but later resigned claiming $733,000 in expenses has yet to be paid.

The claim was queried by auditors KPMG. Mr. Winchell said: ?There will be some payment for substantiated claims when we have the money.?

He said a private benefactor had stepped in with some funds to pay wages.

?Until we have the interim financing in place we cannot go full steam.?

BLDC chairman Geoffrey Elliot would not comment yesterday when asked whether BLDC was trying to back out of the deal or whether BHC was about to step in.

Housing Minister Ashfield DeVent is currently off the Island and not available for comment while BHC General Manager Vance Campbell did not return calls.

BHP 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.