Govt proposes $18M or tax adjustment for Villa Air over airport
The proposals follow an Economic Council meeting held in August.
The President’s Office has proposed two settlement options to take back the Kaadedhdhoo Airport in GDh. Atoll from Villa Air.
Villa Air was awarded the contract to develop and operate the airport, but no progress has been made on the project, and the airport is reported to be in a deteriorating condition.
According to a letter addressed to Villa Air Chairman Siyad Gasim, the government has proposed:
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Government to pay to Villa Air USD 18 million (MVR 277 million) within 18 months as compensation for expenses incurred.
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Settle the same amount through an adjustment of taxes payable by Villa companies to the state within 18 months.
The proposals follow an Economic Council meeting held in August. The council recommended that if Villa Air accepts one of the options, the relevant ministry should terminate the existing agreement with the company and all related provisions.
An assessment by Ernst & Young estimated the development cost of the airport at USD 18.5 million, while Villa sought USD 21 million in compensation. The state had also allocated two islands valued at USD 15 million, bringing the total value of the project to USD 33.5 million.
Former President Abdulla Yameen raised the matter during a PNF rally on Thursday, alleging that successive governments had repeatedly handed over the airport to Villa Chairman and Maamigili MP Gasim Ibrahim. He criticised the government’s handling of the arrangement.
Gasim responded on Friday in a post on X, denying Yameen’s allegations.
Gasim has previously said he would be willing to relinquish the airport if an acceptable settlement is reached. It remains unclear whether Villa Air has accepted either of the government’s proposed options.
