HDC to pay $21 million to CMCC for Rasmale dredging

Housing Development Corporation (HDC) has reached an agreement to pay Maldives' Capital Marine and Civil Construction Company (CMCC) $21 million (MVR 323.8 million) for dredging 29 hectares of land as part of the Rasmale project.

The project involved land reclamation from the K. Fushidhiggaru lagoon.

In December 2023, HDC awarded CMCC the contract to dredge 1,153 hectares of land in the K. Fushidhiggaru lagoon. The agreement included granting CMCC 10 hectares of land in Hulhumale and 60 hectares in K. Fushidhiggaru lagoon for a 50-year period. The project was initially set for completion within eight months but failed to progress as scheduled.

The government announced the termination of its agreement with CMCC in May 2024, citing delays in project implementation. However, further details on the termination were not disclosed at the time.

Recent reports suggest that HDC has signed a settlement agreement with CMCC, agreeing to pay $21 million in compensation for the completed dredging of 29 hectares of land. According to government sources, this payment is not considered compensation or a settlement but rather a payment for work completed under the contract.

“They initially agreed to provide 70 hectares of land. Since the project did not proceed as planned, the land will no longer be allocated. Instead, HDC has decided to pay for the 29 hectares dredged,” a senior government official familiar with the matter said.

Another source confirmed that the agreement includes a payment schedule, with $21 million to be paid to CMCC over 12 months.

Media reports have highlighted conflicting statements about the agreement. While some reports suggest compensation, a statement reportedly issued by CMCC clarified that the agreement was reached for work completed under the contractor financing model. CMCC stated that the dredging and shore protection work of Site J was carried out as agreed by both parties.

The statement also noted that since HDC decided not to provide the land initially agreed upon, the payment pertains to completed work rather than compensation.

HDC and CMCC have not officially commented on the matter. When the project was initially signed, both HDC and the government provided limited details. The government had stated at the time that the project was being implemented without funding from the state budget, leading to public concerns over transparency.

The terms of the recent agreement and the decision to withhold the allocation of land raise questions regarding the project's overall execution and subsequent developments.