Massive lease acquisition costs proposed for new resort islands

2 mins read

Investors proposed hefty sums for two of 13 islands and lagoons put up for tender to develop new resorts, the tourism ministry revealed on Friday (April 14) after the bid openings in late March.

Five parties submitted bids for the three-hectare island of Alidhuffarufinolhu in Haa Alif Atoll. The highest bid proposed a lease acquisition cost that was 585.7% higher than the minimum amount, which was set at US$350,000. 

Three parties submitted bids for the 3.5-hectare island of Thaa Olhufushi (which includes the 0.5 hectare Olhufushifinolhu sandbank) with the highest bidder proposing a lease acquisition cost that was 114.2% higher than the minimum US$700,000. 

Both islands would be eligible for reclamation to expand their land area. 

The tourism ministry announced public tendering for the “lease, development, operation and management” of new resorts in January, inviting bids for the acquisition of leaseholder rights for 50 years. The bid submission deadlines fell between 28 to 30 March. 

A 36-month construction period was offered with nine of the islands and lagoons available for reclamation. An additional period of up to 18 months could be granted if the development involves land reclamation. 

The minimum lease acquisition cost ranged from US$200,000 to US$2.5 million with the lowest rates for islands in the northernmost atolls of Haa Alif and Haa Dhaal. 

The announcement was made with a “special focus” on the north after the inauguration of a US$123 million project to upgrade the Hanimaadhoo International Airport, “which will need 8,000 tourist beds in coming years for smooth functioning” of the new hub, according to the tourism ministry.

With the exception of the Kaashidhoo lagoon in Kaafu Atoll, the other locations are all outside the central region, including five islands in the southern atoll of Huvadhoo (Gaaf Alif and Gaaf Dhaal). 

Aside from the proposed acquisition cost, the bid evaluation criteria includes higher scores for low carbon development and commitments to hire more local and female staff.