Hopes are high that the new US government led by George W. Bush will give the green light for the clean-up of the former Naval Annex in Southampton.

The redevelopment of the 250-acre former US base remains on hold as a result of ongoing negotiations between the US, Bermuda and the UK government on who should foot the bill for the mess at the site.

But both Government and developer King's Point Company -- lead by local businessman Alan Burland -- remain committed to the project.

Development and Opportunity Minister Terry Lister said last week that ground had not been broken and a contract has yet to be signed.

And the biggest stumbling block to the project -- which, if it goes forward, will represent an investment in Bermuda of several hundred million -- is the environmental damage at the site.

"We still haven't worked out the environmental issues,'' Mr. Lister told The Royal Gazette . "That will continue to be a problem until that great and wonderful day when we get the Americans to do something.'' The environmental hazards at the Southampton site include both raw sewage and thousands of gallons of oil in the caves under the land.

Yesterday, Deputy Governor Tim Gurney said progress was being made in the ongoing clean-up negotiations between the three nations.

"Discussions are ongoing between Bermuda, Britain and the United States to find a resolution,'' he said.

"Although there was a change of administration, the British embassy in Washington is still pursuing the matter at a very high level.'' The US Navy pumped raw sewage into Bassett's Cave for years prior to pulling out of Bermuda in 1995. And the oil with which it is co-mingling the caves exacerbates the problem. The oil is believed to have leaked from holding tanks on the former baseland.

A UK-based environmental assessment team which surveyed the caves last year were said to have been "revolted'' and "stunned'' by the extent of the damage.

The UK government is helping Bermuda lobby the US to foot the bill for clean-up efforts at their former bases in both St. David's and Southampton.

The figured attached to the clean-up of both sites is roughly $60 million.

Until a deal is reached, however, the date ground will be broken at King's Point remains up in the air, said Mr. Lister.

When it does go ahead it will proceed in stages.

The first phase of the planned development is to include a golf course, club house and practice facilities and some housing units, Mr. Burland said yesterday.

Hopes raised over former US Naval Annex clean-up Ultimately the development will add a marina, shops, restaurants, other businesses, housing and a hotel but Mr. Lister described King's Point as a project that would be still be a long time in the making.

While the environmental negotiations continue, developers and the Ministry maintain contact on the project.

The King's Point Company includes Mr. Burland's management and development company BEAM Ltd. and others and is charged specifically with the development of the former Annex.

BEAM lost the original bid to develop the land to a British-based firm, Renaissance Resorts, in 1997. But, the company successfully obtained the project when the Renaissance deal fell through in the summer of 1999.

Since then, a waiting game has been underway. Mr. Lister said Government and BEAM are working through a few other minor issues but "nothing major''.

He said, the King's Point team recently had to adjust their plans in order to allow for new ferry docks to complement incoming high speed ferries. "The King's Point team re-worked their plan to meet national needs and we were very appreciative of that,'' said Mr. Lister.

And he said both sides are moving closer and closer every day.

On his part Mr. Burland said discussions with Government continued to be productive. "Hopefully we'll be able to finalise things in the foreseeable future,'' he said.

ENVIRONMENT ENV