Shadow Education Minister Tim Smith says he was astounded when he learned that Government's troubled Stonington Beach Hotel was being transferred to the care of the "failing" Tourism Ministry.

During his presentation in the Education Budget debate in the House of Assembly on Monday, he said Friday's announcement that Bermuda College would no longer be responsible for the hotel had come as quite a shock.

He said: "Disbelief is our response at this time. To move an institution from a sound Ministry to a Ministry that is lacklustre . we don't understand.

"We are concerned that this transfer will not solve a lot of the problems. There are more questions than answers now. If we are out-sourcing the hotel (management of it), why would we need to move it anywhere."

He said he could not understand why Bermuda College could not continue to oversee the hotel once it was leased to a private hotelier.

Education and Development Minister Paula Cox told Parliament on Friday that the hotel, which is attached to the college and provides its hospitality students with on-the-job training, would no longer be the responsibility of the college board, and ultimately the Education Ministry.

She said for many years, the hotel had been running at a loss, creating financial problems for the college, and distracting the board from its most important focus - the students.

She said it was proposed that the College's $2.2 million debt, caused by the hotel, would be paid off this year before Stonington was handed over to the care of Tourism Minister David Allen and his Ministry.

But yesterday, Mr. Smith said many colleges around the world, especially those in the hospitality industry, had private businesses attached to them, such as hotels, and he said he believed there were some benefits to be derived from them.

He added: "I don't understand the rationale of it."

College president Dr. Michael Orenduff welcomed the transfer.

He said moving the hotel to the Tourism Ministry would free up the college administration and the board to concentrate purely on the college and the students.

He said: "I'm an educator, not a hotelier. In an ideal world, it would have been nice, but now I think someone else can get on and make the hotel work, and we can get on and make the college work."

Ms Cox said during her announcement on Friday that the hotel would be leased to an experienced and successful hotelier, with all business risks being met by the lessee.

She said the Tourism Ministry would not be involved in the running of the hotel. And a board, including members of the Education Ministry, will be set up to oversee the operation of the hotel, and to ensure that hospitality students at the college continued to be given first rate training.