to ACE Ltd. and Exel Ltd. to buy the Bermudiana Hotel site.

Approval by the House of Assembly is not the only hurdle that the two companies will have to clear, but it does mean that a waiver of the rule requiring that companies be 60 percent owned by Bermudians in order to own local property is virtually certain.

For years now, it has been generally accepted that with the exception of large hotels (which require massive amounts of capital which Bermudians either do not have or are not prepared to spend on an industry which has provided a terrible return lately) and very wealthy non-Bermudians, land in Bermuda can only be owned by Bermudians or companies in which 60 percent of the stock is held by Bermudians.

The rationale for this is that Bermudians have a right to the opportunity to own "a piece of the rock'' or to build a company without facing the severe competition which could come from companies based in much larger countries.

There have been exceptions. Cable & Wireless required land to build its telecommunications centre which has long benefited Bermuda. Bacardi and American International, who came to Bermuda when the exempted company business was getting started, own their own land and buildings. But in many ways, these are exceptions which make the rule, because Bermuda's greater interest was served by a waiver.

The questions the ACE/Exel proposal raises are whether the 60/40 rule is still valid in today's Bermuda and if so, whether a waiver in this case serves that greater interest.

The debate symbolises the shift in Bermuda from a tourism-based economy to one in which tourism is waning while international business continues to rise.

Thus we have a situation where a historic hotel site which is now a "blot on the landscape'' is seen as the ideal site for a major office building.

Proponents of the ACE/Exel plan note the importance of the companies as good corporate citizens who have blazed a trail which has made Bermuda one of the world's most important insurance sectors. Ownership of the buildings, it is argued, would more firmly anchor them in Bermuda and give them a stake in the Island's well being.

That's all well and good, but to many Bermudians, it signifies a shift away from the traditional protection afforded to Bermudians. With some justice, they see this not as a "one-off'', but as the thin edge of the wedge. Which good corporate citizen will want to have its piece of the rock next, they wonder, and how will Government be able to say no when this precedent has been set? There are no easy answers to those questions. The proposal by ACE and Exel may well be the best available for the Bermudiana and the companies certainly have the financial wherewithal to see it through while preserving much of the site as open space. The United Bermuda Party and the Progressive Labour Party say they are supporting this bill (with misgivings by sizeable minorities) because of the overall benefit to the economy. Now it is time for a broader debate on the merits of the 60/40 rule and how -- and indeed, whether -- Bermudians' birthright should be protected in today's competitive world.