Shipping expenses and structural adjustments have been blamed for increased costs in capsule homes purchased for a pilot programme at Boaz Island in the West End.

The project, announced last year, proposed the purchase and installation of nine capsule homes in Sandys as part of efforts to address housing problems on the island.

In December, in response to questions put forward by Michael Fahy, who was then the Shadow Minister of Housing and Municipalities, the House of Assembly was given a price of $25,850 per two-bedroom unit.

However, documents submitted as part of an effort to gain planning approval for the project listed the cost per unit as $55,000.

In response to queries from The Royal Gazette, a spokesman for the Ministry of Housing and Municipalities said the original figure reflected the base manufacturing costs “on a freight on board to the port of Qingdao, China”.

The spokesman said: “This cost represented production only and did not include shipping, logistics or any subsequent refinements.

“Following initial procurement discussions, structural adjustments were made to ensure the units meet anticipated performance and installation requirements. This resulted in a revised manufacturing cost of $26,300 per unit.

“At the time these figures were first shared in 2025, shipping costs to Bermuda were estimated at approximately $9,000 to $12,000 per unit. However, global shipping conditions have changed significantly since then.

“Prior to the issuance of the appeal letter, freight costs had increased to $24,031.12 per unit and have since risen further to $29,481.58 per unit.”

Between the manufacturing costs and the shipping costs, the spokeswoman said, the cost per fully delivered unit would come in at $55,781.58.

The spokesman added: “It is important to emphasise that the earlier figure presented in the House of Assembly reflected manufacturing costs only, whereas the updated figure represents the full landed cost to Bermuda, inclusive of logistics and current market conditions.

“The ministry remains committed to transparency and will continue to provide clear, accurate updates as the project progresses.”

The pilot programme was announced by the Government in November as part of a plan to bolster housing on the island.

However, a planning application for the project garnered more than a dozen objections.

The proposal was subsequently turned down by the Development Applications Board, which found it to be in conflict with policies in the Bermuda Plan 2018.

Specific issues included that the units went against the “Bermuda image” and lacked communal space for garbage or adequate outdoor areas.

The Bermuda Housing Corporation subsequently launched an appeal to overturn the decision, arguing in a letter to Diallo Rabain, the Cabinet Office minister, that the project be considered in the light of the island’s “real and growing” housing crisis.