Govt proposes fare hike to sustain RTL ferry
The RTL ferry service, spanning several key zones, has seen a dramatic increase in government subsidies since its inception.
In Tuesday’s session with Parliament’s Economic Committee, Transport Minister Mohamed Ameen highlighted the financial strain of sustaining the high-speed RTL (Raajje Transport Link) ferry service, proposing increasing fares and revising the subsidy model to ensure the service's long-term sustainability.
The RTL ferry service, spanning several key zones, has seen a major increase in government subsidies since its inception.
According to Ameen, the government allocated MVR 48 million in subsidies in the service's first year, which rose to MVR 130 million the following year. By the end of the current year, the subsidy figure is projected to reach MVR 280 million.
With costs mounting, Ameen warned that this model is financially untenable in the long term, with the state only managing a 20% cost recovery rate while covering 80% through subsidies.
"If this trend continues, the government will need to allocate MVR 1 billion in subsidies alone, which is simply unaffordable," Ameen stated.
He emphasized the need to increase fare rates to improve cost recovery and reduce dependency on subsidies.
To address the financial imbalance, the Ministry aims to lower subsidy levels to 55% and increase the recovery rate to 45%. This shift, according to Ameen, is crucial for maintaining the RTL service as a viable, sustainable mode of transportation. The Minister plans to present the proposed fare adjustments to the Economic Council, which previously set RTL prices during the administration of the Maldivian Democratic Party (MDP).
In support of this initiative, Ameen noted that a proposal from USAID includes recommendations for optimizing RTL fare structures, which will also be shared with the Economic Council for review.
While endorsing the previous administration’s expansion plans for the RTL service, Ameen indicated that certain routes may need to be revised to curb operating costs.
The service, currently available across four zones—including the Haa Dhaal, Haa Alif, and Shaviyani atoll zones, as well as the Lhaviyani, Noonu, Gaaf Alif, Gaaf Dhaal, Fuvamulah, and Addu areas—has been impactful for local residents. Despite the proposed changes, Ameen assured that the service's expansion timeline has been accelerated, moving from the initially planned 2027 to 2026.
