MPs have approved a land reclamation agreement between Government and the West End Development Corporation (Wedco) for 2.7 acres at Dockyard.

The area to be occupied marks a reduction from an original 8.2 acres proposed in November. It concerns 2.76 acres adjoining the North Breakwater at the New Dockyard Camber.

The retroactive agreement for work already done permits the land to be reclaimed, and will pave the way for the second phase of the project to accommodate Panamax and Post-Panamax 'mega' ships. According to the agreement, approved in the House of Assembly this week, the 2.7 acres will be licensed to Wedco in a 'freehold conveyance' for $1.

The agreement states: "This Land Reclamation Agreement constitutes a licence and confers no tenancy or lease or other legal interest in land upon the Licensee."

As one of the conditions, Wedco must complete the land reclamation before May 31. Insurance must also be arranged in the joint names of Government and Wedco for "all perils, including loss or damage to the land and the works hereof and public liability", to cover a sum of $56 million.

The reclamation area will facilitate the next phase of the second cruise ship pier project, which involves the pier itself, a ground transportation area, new terminal building and 36 ft-wide bridge.

Works and Engineering Minister Derrick Burgess announced that the retroactive planning application for the second phase of the project would be decided by Planning officials next week.

Outlining the land reclamation agreement to MPs on Wednesday, Mr. Burgess said the Ministry had taken legal advice from the Attorney General's Chambers.

Government was forced to suspend its original proposed land reclamation agreement with Wedco in December, after a storm of protest from MPs in the House. The plan was to grant Wedco a freehold to 8.2 acres of the seabed, but Mr. Burgess announced the matter would have to go to further consideration.

He told MPs this week: "The area to be reclaimed is 2.7 acres and not the 8.2 acres as previously submitted."

Deputy Opposition Leader Trevor Moniz said: "It's an unusual agreement and is now in a form which is not objectionable, and it covers an area of land the dock and the fill area, in which work has already been done.

"That's not to say there may not be at a later date a further transfer of land under which we might have difficulty (as the Opposition)."

Government unveiled plans for the second cruise ship pier in 2007, with the project contracted to Correia Construction. Mr. Moniz told the House on Wednesday: "The system of specifying and picking the vendor for this project was opaque, the opposite of transparent. "And this concerns me, as at the end of the day the project went over-budget."

The Premier told MPs on March 11 that the $60 m pier project would come in over-budget as extra money had to be spent due to environmental concerns and to make sure it was completed in time for the cruise ship season this summer.

He said the overspend last year was $6 million, which included $3.7 million on "dolphin mitigation".

Dr. Ewart Brown told MPs this was to ensure the animals were not disturbed by construction of the new cruise ship pier, such as with noise and vibration of the pile driving. Dr. Brown said studies were also needed into the possible effects on the dolphins of the ships' modern thrusters. He said the cost of the tests "went up to $3.7 million".

"That's really taking excellent care of the dolphins," he said.

In the House this week however, Mr. Moniz took issue with this amount.

"The Premier says this 'supplementary' cost was done on work for the dolphins, but I don't believe that," he said. "There were measures such as putting a baffle in the water gate, but that would have involved a few thousand dollars, so we are very concerned about the over-running of the project budget.

"The transfer of land is taking place for the consideration of $1. I believe this project today costs close to $60 million and we wonder what the public is going to get back at the end of the day, but that remains to be seen."

Shadow Environment Minister Cole Simons then asked: "I would like to know whether at this point the retroactive planning has been approved and if so, when?

"I want the Minister to confirm when it was approved. If it was not approved we can't approve this land lease based on what is written here today."

Mr. Simons also pointed out the project costs of $60 million-plus were more than the amount being insured in the agreement $56 million.

"We want the project to be well-insured, we don't want it to be under-insured. We want to make sure this is insured adequately," he said.

He added there was already enough room on the dock for buses and taxis to turn around, so questioned the need for additional land reclamation. "If Bermuda can manage with what's there now, why do we need to extend to eight acres? Why do we have to go and landfill six acres, it's totally unnecessary as far as I'm concerned. Let's do what we can with what we have. What we should have out there should be adequate."

Mr. Burgess responded: "The $60 million, that includes the value for the environmental works, the studies, project management and the fit-out of the terminal building and other expenses.

"As far as planning approval, we don't have it yet. It's going to Planning next week. As far as the point that the honourable member Trevor Moniz made, $3.7 million was spent on a study for the dolphins. That was for a consultant."

Mr. Burgess said: "I move the land reclamation agreement be approved."

The agreement between Government and Wedco was passed in the House of Assembly following no objections.