The planned $32 million resuscitation of a derelict Island hotel is on hold until after the General Election, it emerged yesterday.

"It makes good business sense to see the results of the election before we commit,'' said Camberley Hotel Company president Ian Lloyd-Jones.

Atlanta-based Camberley hopes to take over the abandoned Club Med hotel in St.

George's and was originally scheduled to sign a lease with Government this month.

However, the company has now asked -- and been granted -- an extended period of time before it has to sign the lease for the East End property which has been closed for a decade.

"We asked Government for an extension until the end of the year and they have agreed,'' said Mr. Lloyd-Jones.

Tourism Minister David Dodwell said Government's granting an extension to the project showed its confidence in Camberley.

He stressed that the decision was made because Camberley was a themed hotel which fitted perfectly with St. George's historical and cultural atmosphere and with the five year plan the Department had helped devise to take Bermuda forward. "We recognise that Camberley is a very good company and presents a very good opportunity to Bermuda. In my view we should not pass up that opportunity.'' Camberley's decision to ask for an extension arose from the risks the project involves which were identified during the due diligence phase of the proposed take over which began nine months ago.

Mr. Lloyd-Jones noted: "This project is not without risk. The reason we have taken so much time on the due diligence phase of this project is to mitigate that risk and understand what all the risks are.'' A number of major issues have been resolved leaving just one to deal with, he continued.

"I read the papers and I know that an election is imminent. We want to know who our landlord partner will be, what they will expect from us and what we can expect from them.'' He stressed that he was not implying that a change in the Country's leadership would mean the termination of a deal.

"That is not the case. It makes good business sense to know who you are dealing with. There is some uncertainty surrounding this election as there is with any election.

"This project is not without risk. We do not want to find that we have covered all the bases except the most important one.'' Mr. Lloyd-Jones compared it to the leasing of an apartment.

"If you rent an apartment right before the landlord sells the lease and then you find that you have a new landlord, you will want to know who your new landlord is.

"I know where I stand now with the present Government. I regard them as my landlord.'' And he recognised the "tremendous'' support he had received from Mr. Dodwell and Works and Engineering Minister C.V. (Jim) Woolridge during the due diligence process.

Meanwhile, Mr. Dodwell noted: "We have had excellent relationships with Camberley. Ian Lloyd-Jones is a highly principled individual and I am confident that if the United Bermuda Party is elected at the next General election then we will move forward with this project.'' Meanwhile, the company also faces the challenge of raising the necessary funds for the project in an unstable global financial climate.

Camberley has been given a verbal assessment of the site from the experts who studied it and are aware what renovations and operation of the property will entail.

However, the firm has yet to receive the written reports -- which will not tell Camberley anything it does not already know, stressed Mr. Lloyd-Jones -- but will enable the hotel company to prepare the files possible capital sources will want to see.

"We have got to have these documents and others for them,'' he said.

"We have not finalised our capital partners but we are taking steps to do so,'' he noted.

And getting the capital sources presents its own challenges, added Mr.

Lloyd-Jones, pointing to the problems they were facing.

"Capital markets world-wide are just drying up,'' he said.

"The major players are locking down and waiting for the storm to past.'' Camberley has turned to private equity in its bid to raise the necessary capital for the renovation of the hotel property and has opened discussions with local institutions about dealing with the debt the company will assume during the project.

He declined to reveal who the company was speaking to in Bermuda.

David Dodwell