to trim the rising cost of the work.

Hidden problems inside the buildings have presented Bermuda Properties Limited (BPL) with many "challenges'' as they bid to bring the price of the construction down.

Initial estimates of $50 million, before Marriott closed the hotel last November, soon escalated when workmen started exploratory surveys inside the property. The estimated cost has soared to $78 million.

But Peter Parker of BPL said he was still hopeful the new luxury hotel would open as planned in 2002 despite the delays.

"We are certainly pushed back in terms of getting construction going,'' he said.

Mr. Parker said working with the budgets was a balancing act as every cut in the building budget could add costs to the operating budget.

He added that early estimates of what the total upgrading of the 1930s buildings would cost became unstuck when Marriott left and BPL staff were able to move in.

"The brutal honesty of it is that every time we went further with the investigation, everything we found added to the price.

"Every time we turned a corner, the price went up. The real problem was that even at that price we still had no insurance we wouldn't find something else.

"We are looking at all the options and trying to figure out how to do it right.'' Mr. Parker added that they were hoping to come to a figure between $50 and $78 million, while still building a five star resort, by tweaking their designs.

"We have to make our dreams a reality. Sometimes that means retreating a bit and there are lots of ways of doing that.

"We have a very, very highly professional, skilled development team who are working very hard on this.'' It has also emerged that other hotel management chains are interested in the planned luxury hotel. Regent International is reported to have sent a letter of intent for the property but nothing will be decided until nearer completion of the hotel.

Presently, much of the hotel's interior fixtures and fittings are being sold off. The new Daniel's Head eco-resort has purchased furniture to go in its tented cottages which are due to open in the summer.