Foreign development of the Bermudiana Hotel will boost Bermuda's economy and anchor two huge offshore insurance companies to the Island, according to the businesses behind the project.

It will also benefit local shareholders and is currently the only viable way of ridding the Island of a prominent eyesore.

And ACE Ltd. and Exel Ltd. said yesterday in a counter attack against the plan's critics that it will prove Bermuda's commitment to the international business pillar of the economy.

ACE and Exel have agreed to buy the property from Argus Insurance and develop the site for their new offices -- if a private Bill bypassing the 60/40 ownership rule and planning permission are passed.

The deal is opposed by former owner the Bermuda Financial Centre Ltd. which wanted to raise cash to develop the site for offices, shops and a hotel.

It claims the land should be kept in Bermudian hands and still hopes to launch a rival bid despite struggling to raise the necessary cash.

Yesterday ACE, Exel and Argus -- which took over the property from BFCL -- released documents attacking BFCL which they accused of making factual errors in its campaign against the plan.

They also list reasons to support the scheme, although it now seems certain to be accepted by MPs after the PLP indicated its support for the private Bermudiana Site Rehabilitation Bill, which is likely to get its second reading on Friday, when the House of Assembly reconvenes.

The governing United Bermuda Party is set to resume discussions on the bill today at a special caucus meeting.

The reasons given by the three companies include: The Bermudiana site has been in non-Bermudian hands for years and true ownersip will pass from the British hotel chain Trust House Forte to ACE and EXEL; BFCL never owned the land and even if it succeeded in developing the site would be still be 90 percent foreign owned; No truly Bermudian entity can afford to develop the site; ACE and EXEL will not be able to sell-on to non-Bermudians without the approval of the Finance Minister; A five-year phased development is ideal for the construction industry and the site will need landscaping, servicing, painting and cleaning; It will anchor key insurance industry businesses solidly in Bermuda, ensuring their long-term presence on the Island.

Small BFCL shareholders would receive $525,000 voluntary compensation from ACE and EXEL; and An influx of overseas money financing the development would benefit Bermuda's balance of payments.

On BFCL, the documents say it has no ownership interest in the Bermudiana and "therefore has no standing whatsoever to state it should be given the opportunity to develop the site''.

"BFCL has no ownership rights in the site, it tried for three years but was unsuccessful in financing and developing the site and even if it were now to arrange financing, it would be financing for a site it has no right to own,'' state the documents.

They continue: "While it might be nice to consider Bermudian ownership through local companies, like BFCL for example, the economic reality is that more than ample opportunity has been given to `local' investors to finance and develop the site with absolutely no success to date.

"If BFCL were successful tomorrow in raising the necessary financing, the company would at best be 90 percent foreign owned and probably 95 percent. For BFCL to project itself as Bermudian is grossly misleading.

"ACE and Exel, two significant overseas companies with major financial resources ready to be committed to this project, are here and ready to develop the site.

"The abandoned and crumbling Bermudiana Hotel is an eyesore totally inconsistent with the image Bermuda wishes to promote at home and abroad.

"Its dereliction advertises that Bermuda has failed to find a proper economic use for the site.'' TOURISM TOU