A project to provide bargain homes for ?lottery winners? alongside identical market value properties has been massively downsized ? prompting questions about how Government will fund the multi-million dollar scheme.

The Ministry of Works and Engineering and Housing confirmed yesterday that just 108 units would be built at the Southside housing project Harbourside Village ? 88 less than first planned by Bermuda Homes for People (BHP). Private developer BHP originally said it would build 98 market price homes and 98 identical low-cost homes, with the costlier homes paying for the construction of the cheaper properties.

The group was declared technically insolvent last year but Government went ahead with a lottery for the 98 low-cost homes, offering them to winners for just $199,000. Housing Minister Sen. Burch met with winners of the BHP lottery last week to assure them that work was soon to start on the building of the homes. A spokeswoman at the Ministry of Works and Engineering and Housing reiterated what Sen. Burch told the winners.

She said: ?The purpose of last week?s meeting was to keep the lottery winners abreast of the status of the Bermuda Homes for People. The lottery winners are aware of all the terms and conditions as it relates to the project. There will be 108 units. The units will be for sale at $199,000.?

Opposition Senate Leader Kim Swan said last night that the downsizing of the scheme would have dramatic financial implications.

?The irony of this new revelation is that the Government is now promising to make good on the promise to provide homes for the lottery winners at a new location across the street,? he said.

?The Minister revealed in a newscast on ZBM on Friday that the new development would cost in the region of $50 million and that the project would be scaled down to 108 units. The projected cost of $50 million floated by the Minister is astronomical when considering that to realise 108 units would place the average cost of each unit at $462,000.?

Sen. Swan said that would require the Government to subsidise the scheme by a projected $25.7 million or $263,000 per lottery winner.

?It is important to note that the proposed plan of the defunct Bermuda Homes for People was to offset the $199,000 sale price by diverting the profits of the additional homes it proposed to build and sell at market value,? he said. ?The Minister has revealed that he plans to build an additional ten units above the 98 units expected by the lottery winners.

If these units were sold at market price, the profits derived from their sale would make little impact on the projected deficit amount of $25 million.?

He added: ?How will Government underwrite the shortfall between the actual cost of building each unit and the below market price guaranteed to the lottery winners??

Sen. Swan said while the UBP empathises with people promised homes in the lottery, the party believes Sen. Burch ?in his desperation to bring forward some good news, is writing a cheque the Government may find difficult to honour.?

He claimed the ?ongoing saga? had ?gone from a financial failure to an ?at all and any cost? election ploy?.

The Ministry spokeswoman did not respond to a question about how the project would be subsidised.