Norwegian Cruise Line has had its knuckles rapped after busting passenger limits -- and in the process they boosted Tourism Minister David Allen's marketing budget by $500,000.

And, despite being "fined'' for filling cruise and stay cabins with regular passengers, Government has allowed NCL to carry on selling extra berths above their previous "limit'', with conditions.

Unlike other funds set up by cruise lines, which give training to Bermudians or to boost retail trade on the Island, NCL's "fines'' go straight into the Department of Tourism's budget.

The "fines'' are a one-off donation of $300,000 to fund joint marketing in the US and $200,000 a year into a cooperative fund for further selling in the US North East.

In addition, NCL will have to dedicate 100 berths each week to cruise and stay vacationers -- those who cruise to the Island and stay in a hotel, flying home, or vice versa.

And if they sell more than 100 cruise and stay berths, Government will pay $50 per adult passengers above the limit.

That means the vessel could sell up to 400 extra berths a week above its unofficial 1,500 cap.

As The Royal Gazette first reported, NCL's Norwegian Majesty brought several hundred "regular'' cruise passengers to St. George's above its unofficial ceiling of 1,500 last season.

After a refit in 1998, its berths increased to 2,000 but Tourism Minister David Allen said any of those extra berths were sold to cruise and stay passengers -- acting as a cap on numbers.

However, it is known that the cruise and stay idea failed to take off and NCL could not supply numbers of holidays sold.

Mr. Allen said NCL president Colin Veitch had worked with the Department of Tourism to reach "a resolution of this dispute in a spirit of partnership''.

"This agreement means that next year we will have an additional $500,000 for marketing Bermuda as a destination, as well as vacations with a hotel staying component,'' he said.

"It sends a strong signal to cruise lines that we take such agreements seriously.'' The Minister told MPs that this summer the Norwegian Majesty carried some 400 cruise-only passengers at peak times over agreed numbers. He added that NCL's ten year contract, which expires in 2003, did not stipulate a cap on numbers.

"When the excess cruise-only passengers were carried in cabins dedicated to cruise and stay passengers, Government strenuously expressed its extreme displeasure to NCL.'' The one-off payment of $300,000 is a donation into a joint fund for Department of Tourism destination marketing in New England and the north eastern US.

CRUISE SHIP SHI