Govt seeks to allow SOEs to develop resorts under new bill
An SOE is defined as a company in which the government holds at least 45% ownership.
The government on Wednesday submitted a bill to amend the Tourism Act to allow state-owned enterprises (SOEs) to obtain islands, land or lagoons for the development of tourist resorts or integrated tourist resorts.
The amendment was proposed by PNC MP Mohamed Sinaan on behalf of the government.
A key provision in the bill is a new clause enabling government-owned companies to be allocated sites for tourism development. Under the current Article 5 of the Tourism Act, islands, land and lagoons may be leased for tourism purposes through three mechanisms:
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1-
A public announcement inviting bids for lease in accordance with the procedures set by the Ministry of Tourism
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2-
Submission of an application to the Ministry of Tourism with details of a proposed project
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3-
Allocation as a cross-subsidy, where land is granted to a party undertaking a significant project for economic or social benefit to the State
The amendment proposes a fourth option, allowing allocations to SOEs under specific conditions. These conditions include:
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A Cabinet decision is required to designate the island, land or lagoon to be allocated to a state-owned company
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The allocation must be formalised through an agreement between the government and the SOE
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The rights granted under that agreement cannot be transferred, leased or subleased to any other party
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The company must pay an acquisition fee to the government
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Funds determined by the Ministry may be required to be deposited into the Tourism Trust Fund as Corporate Social Responsibility (CSR), or spent on a development project designated by the Minister
The amendment also authorises the allocation of islands and uninhabited land to SOEs for the establishment and operation of yacht harbours. An SOE is defined as a company in which the government holds at least 45% ownership.
If passed and ratified, the amendments will come into force immediately, with relevant regulations required to be formulated within three months.
