The preferred bidder to build Bermuda's new multimillion dollar hospital will be named by September 29, Health Minister Walter Roban told MPs on Monday.

He said in the House of Assembly he wanted to reassure the public that the project to replace King Edward VII Memorial Hospital with a high-tech acute care centre was happening "according to plan and on schedule".

The fact that Government is guaranteeing the financing of the facility clearly demonstrates its commitment to the redevelopment of KEMH, the Minister added. Mr. Roban spoke during debate on the Government Loans Amendment Act 2010, which was approved by MPs.

The legislation seeks to reassure companies bidding on the hospital contract that Government can guarantee the debts and other obligations of third parties. Finance Minister Paula Cox presented the bill, explaining that it amended the Government Loans Act 1978 to state clearly that Government has such power and to clarify the meaning of "public debt".

"Honourable members will recall that the Government has committed to provide a guarantee in support of the Bermuda Hospitals Board's (BHB) financial obligations related to the contract with a private sector partner to design, build, finance and maintain new facilities at the King Edward VII Memorial Hospital site," she said.

"Honourable members are advised that the KEMH Redevelopment Project is on schedule and it is anticipated that the contract and financial close for this project is scheduled to take place in the later part of this year.

"The Government guarantee is an important feature of the KEMH Redevelopment Project. The advisers to the BHB for this project have indicated to the Ministry that having this amendment approved by the Legislature prior to the House recessing for the summer will clearly establish bidders' certainty and confidence with respect to the Government guarantee."

The Deputy Premier added: "At the outset, I wish to make it abundantly clear that the sole purpose of this bill is to provide the level of certainty sought by bidders on the KEMH Redevelopment Project; nothing more, nothing less."

She said the amendment would improve transparency as it required the Minister of Finance to inform the Legislature as soon as possible after the execution of a guarantee.

It also adds a definition of public debt as the amount of funds borrowed by Government in line with international standards to the original Act.

Shadow Finance Minister Bob Richards said he had no problem with the amendment, which he described as housekeeping to do with the hospital project.