B. Huraafaru. Photo/Google Maps

Court sides with ministry on Huraafaru lease back-out

The tourism ministry raised the acquisition cost under the 'procedure for dealing with cases of islands under investigation with regard to MMPRC scandal.

24 December 2022

By Aman Haleem

The Civil Court has ruled that the tourism ministry deciding not to lease out B. Hurafaru as per the offer letter given by MMPRC for the development of a resort in the island was a good decision.

In October 2014, a company named Secret Paradise Private Limited approached the Economic and Youth Council (EYC) to develop a resort in Huraafaru. The EYC accepted the proposal.

  • The offer letter was issued through MMPRC

  • Agreed to pay $360,000 (MVR 5.5 million) in lease acquisition cost

  • Secret Paradise paid the money but the island was not handed over

In February 2017, soon after the payment was made, the tourism ministry asked Secret Paradise to raise the acquisition cost to $1,615,000 and pay the difference, saying the original numbers were unsubstantiated. Secret Paradise agreed to pay the amount.

However, in January 2020, a case was filed in the court  by the company, alleging that it was forced to pay exceeds and the island was withheld illegally. In this case, Secret Paradise requested the court to:

  • For not allotting the island under the first offer letter and that the price hike, was illegal

  • Order the handing over of the island

  • To declare that direct compensation can be sought for non-deliverance of island

The court ruled that there was no place to order the tourism ministry to lease Huraafaru. The reason is that Secret Paradise had agreed to pay the increased price, civil judge Hafiza Abdul Sattar ruled.

The judgment shows that tourism raised the acquisition cost under the 'procedure for dealing with cases of islands under investigation with regard to MMPRC'. After examining the requirements under the policy, the government concluded that the acquisition cost was too low. 

Citing letters exchanged by both sides, Secret Paradise agreed to pay the amount and sought two extensions, the court said. In October 2017, former President Abdulla Yameen Abdul Gayoom's administration had sought the last opportunity to pay the amount. Tourism scrapped the deal two years later, under the current government, in December 2019.