updated 11/28/2008 2:26:18 AM ET 2008-11-28T07:26:18

Bermuda plans to build a second cruise ship pier in the island's western region to accommodate large ships.

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The government says it hopes the multimillion dollar project will transform an old naval town into a new tourism hub.

The government said this week that it has signed an agreement with a local developer. Dockyard was chosen because it already has a deep-water pier that can accommodate ships longer than 710 feet (216 meters).

Bermuda has two smaller piers that have lost popularity as cruise ship companies build larger vessels. The government had warned that expanding those piers would damage the environment.

About 226,000 cruise ship passengers arrived through August this year, a nearly 18 percent drop from 2007.

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