Tourism Minister David Allen gave another boost to the flagging tourism industry yesterday when he revealed that Malaysian developers were interested in redeveloping the former Club Med property.

And Mr. Allen told the House of Assembly that the potential developers intended to demolish and substantially rebuild the St. George's landmark if its plans went ahead.

Mr. Allen said Government had negotiated and signed a memorandum of understanding concerning the redevelopment of the site, which would have a "substantial tourism component''.

"The Government of Bermuda and Aman Capital, a subsidiary of Selangor Properties Berhad, based in Kuala Lumpur, Malaysia, have been engaged in negotiations for the past year on the future of the former Club Med site, which has now been closed for over 12 years,'' he said.

"The memorandum of agreement provides for a 90 day period of exclusivity for Aman Capital to draw up a master plan for the former Club Med site, such development plan to be the basis for formalising with the Cabinet Sub-Committee for Hotel Development the incentives to be provided under the Hotel Concessions Act 2000.'' Negotiations on behalf of Government were handled by the Cabinet Sub-Committee for Hotel Development which included Mr. Allen, Finance Minister Eugene Cox, Environment, Development and Opportunity Minister Terry Lister, Works & Engineering Minister Alex Scott, Attorney General Dame Lois Browne-Evans and their technical officers.

Works and Engineering, as landlords for the East End property, will formalise a lease agreement with Aman Capital.

"Final agreement is of course subject to Cabinet approval,'' continued Mr.

Allen. "The resort will have a substantial tourism component and development will be sympathetic to the nature and ambience of St. George's Parish, and in keeping with St. George's new designation by UNESCO as a World Heritage Site.

"Demolition of the great majority of, or all of, the existing structure would take place in preparation for the new development.'' Aman Capital's parent company, Selangor Properties Berhad, is a very substantial company of international reputation with extensive holdings in southeast Asia, Australia and North America, involving property development -- including resort development.

"They are prepared to become full partners in developing the full potential of Bermuda as a high end destination for discerning visitors,'' he said.

Club Med And the principals of the company said that of all the countries with which they had conducted business, Bermuda, with its Hotel Concessions Act 2000, provided the clearest and most user friendly blueprint for investors, he added.

"The Government of Bermuda welcomes the opportunity to forge a partnership with Aman Capital which, with other landmark hotel and tourism projects now under way in Bermuda, and the concurrent reinvestment in Bermuda's human capital resources, will ensure that Bermuda's tourism industry does indeed have a very bright future ahead of it.''