Ras Male' project is an initiative of Eagle Hills, and no agreement has been made to grant land ownership to any foreign entity: Muththalib

Minister of Infrastructure, Housing and Urban Development Dr. Abdulla Muththalib has announced that the 500-hectare real estate project in Ras Male' is being developed following a proposal initiated by Eagle Hills, a prominent company based in the United Arab Emirates.

Mohamed Ibrahim (Kudu), the Member of Parliament for North Galolhu, sent a formal letter to Minister Muththalib on the 29th of last month, seeking detailed information regarding the Maldives Waterfront and Marina project planned for Ras Male'.

In response to the letter, the Minister clarified that the agreement signed with Eagle Hills is a commercial terms framework required to negotiate and finalize the contract. He noted that the agreement was executed under the Private Sector Initiated Proposal (PSIP) policy, in accordance with Section 10.22 (c) of the State Finance Regulations, which governs projects proposed through private sector initiatives.

The letter emphasized that the main agreement will be signed in full compliance with the Constitution and existing laws. It noted that while the developer is required to pay 10 percent of their total revenue to the state as a land premium, the total projected revenue from land leases and premiums is estimated at USD 3 billion. Furthermore, the document highlighted that this figure is likely to increase as market property values rise. Under the agreed commercial terms, USD 500 million of this total will be provided as an advance payment to fund the Maldivian government's housing projects.

The Minister stated that the formulas used to calculate lease acquisition costs for tourism properties were reviewed to ensure the approach remains financially beneficial to the state. According to the letter, based on the formulas published by the previous administration on September 19, 2022, for leasing land and lagoons under a cross-subsidy model, the lease acquisition cost for a 500-hectare lagoon in Male' Atoll for a 50-year period would amount to USD 75.75 million. The letter further noted that an additional USD 10 million is required to extend the lease for another 49 years. This means that by leasing a 500-hectare lagoon for tourism purposes, the state would currently receive a total of USD 85.75 million as an upfront payment.

Furthermore, the Minister stated that the lease acquisition cost for a plot of land in Male' Atoll for tourism purposes over a 50-year period is USD 306 million. The Minister's letter further clarified that an additional USD 10 million is required to extend the lease by another 49 years. This means the state would currently receive USD 316 million as an upfront payment for leasing 500 hectares of land for tourism development.

The Minister noted that for lagoons and islands leased for tourism in Male' Atoll exceeding 40 hectares, the annual rent is set at USD 2 million. He explained that this means by the end of a 99-year lease, the state would receive USD 198 million, excluding the previously mentioned advance payments.

The Minister stated that the 500-hectare real estate project in Ras Male' will generate direct revenue for the state, including a land premium equivalent to 10 percent of the developer's total revenue—estimated at approximately USD 3.1 billion over 10 years. Additionally, an advance payment of USD 500 million from the projected revenue must be allocated toward government-led housing initiatives.

Furthermore, the Minister stated that buyers will be required to pay the government four percent of the unit's market value upon each acquisition. He also noted that in addition to the tax revenue generated from economic activities in Ras Male', the government has not agreed to grant import duty exemptions for this project, distinguishing it from the incentives typically provided to the tourism industry.

The letter clarified that the government has not agreed to undertake any financial obligations for the $500 million housing project. It further noted that the primary clauses of the signed commercial terms agreement have already been made public, and that the specific details regarding the investment schedule will be outlined in the main agreement.

Payments to the developer's primary contractors must be made onshore through a bank established in the Maldives and licensed by the Maldives Monetary Authority (MMA). The letter further noted that this requirement ensures developers settle payments with contractors in local currency only after exchanging foreign currency through a domestic bank. The letter also highlighted that payments for off-plan units purchased from the developer must initially be deposited into an escrow account held at an MMA-licensed bank within the Maldives. These funds will only be released to the developer based on the verified progress of the project.

The Minister stated that the project is estimated to generate 54,000 jobs. The letter further noted that once the development reaches maturity, it is expected to create 15,000 permanent positions, providing significant opportunities for Maldivians across various professional sectors.

The letter noted that the project was developed after extensive research into similar successful models worldwide. Consequently, it emphasized that there is no doubt regarding the marketability of the project's properties on the global stage.

Furthermore, the letter clarified that the project does not involve granting ownership of any property to foreign entities, and that any leasing arrangements will be conducted strictly in accordance with Maldivian law. Minister Muththalib also stated that the project is not expected to hinder the implementation of the government's housing policies.