The new Bahamas Mortgage Corporation building that is under construction on John F. Kennedy Drive has a cost overrun of more that $7 million, according to Prime Minister Hubert Ingraham.

He told the House of Assembly on Monday that the government has discontinued construction on the large complex next to the Ministry of Works.

The prime minister revealed this information as a result of a question posed to the government by Philip Davis, PLP MP for Cat Island, San Salvador and Rum Cay, during Opposition Day.

"An assessment is now being undertaken to determine the extent of the liability of either the National Insurance Board or the Mortgage Corporation and the contractor," said Mr. Ingraham in response to Mr. Davis.

"The intent is to terminate the contract for cause and to cause the building to be completed; for the national insurance board to be paid the $7 million that you as chairman of National Insurance lent to the mortgage corporation; and for that building to come into the ownership of the government."

Mr. Davis did not respond to the prime minister.

It appears unlikely that the Mortgage Corporation will occupy the building once it is completed. The prime minister has previously said that the building is the government?s and it will decide how to use it.

Mr. Ingraham reaffirmed this on Monday.

"And we will permit the Mortgage Corporation to build a building suitable for its needs, because that building far, far exceeds anything they can dream of becoming in the next century," he said.

Rumors have circulated that the Office of the Prime Minister will be one of the government entities placed in the new building once it is completed. The government, however, has not officially named all of the state agencies scheduled to occupy the location.

The government also announced in the last budget that it intends to construct new office buildings in New Providence, Grand Bahama and Abaco.

On Monday, Mr. Ingraham reaffirmed his government?s intent to go ahead with these multi-million dollar projects on Monday despite the global financial crisis.

By BRENT DEAN