Parliament approves amendment allowing SOEs to develop resorts
The bill passed with 64 votes in favour and no votes against.
Parliament on Wednesday passed an amendment to the Tourism Act allowing state-owned enterprises (SOEs) to develop tourist resorts and integrated tourist resorts.
The amendment, initially proposed last week by PNC MP Mohamed Sinaan on behalf of the government, was reviewed by the Parliamentary Committee on Economic Affairs, which forwarded the bill with minor changes. The bill passed with 64 votes in favour and no votes against.
A key change introduced in the amendment permits government-owned companies to lease land for resort development.
Under Article 5 of the current Tourism Act, islands, land and lagoons may be leased for tourism purposes in three ways:
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1-
Public announcement: Leases offered through a Ministry of Tourism announcement to parties submitting proposals in line with set procedures
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2-
Application-based leasing: Leasing following an application to the Ministry of Tourism outlining the intended project
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3-
Cross-subsidy allocation: Allocation for resort or integrated resort development as a cross-subsidy for parties undertaking major economic or social projects deemed beneficial to the State
The amendment adds a fourth provision, enabling land, islands or lagoons to be allocated to a state-owned company under specific conditions.
The bill sets out conditions for such allocations, including:
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The Cabinet must approve both the allocation and the specific island, land or lagoon to be leased to the SOE
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The allocation must be made under an agreement between the government and the state-owned company
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The SOE must pay an acquisition fee to the government
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Regulations under the Act may require the SOE to deposit funds into the Tourism Trust Fund as Corporate Social Responsibility (CSR) or to spend on development projects designated by the Minister
The amendment also allows islands and land to be allocated to state-owned companies for the operation of yacht ports. A state-owned company is defined as one in which the government holds at least 45% of shares.
A further committee-stage amendment clarifies that the government’s shareholding in the company cannot be reduced below 45% during the term of the agreement, ensuring continued state ownership for the duration of the contract.
