Ras Malé land value can't be compared with Hulhumalé, says Muththalib

Minister of Construction, Housing and Infrastructure Dr Abdulla Muththalib has rejected comparisons between land prices in Hulhumalé and the value of land allocated to Eagle Hills under the proposed Ras Malé development, arguing that the two locations are at different stages of development.

In a post published on LinkedIn, Muththalib responded to a Dhauru report titled "MVR 408 billion worth of land given to Eagle Hills for free without receiving its value".

He said land prices in Hulhumalé had increased over the years because of investments in infrastructure and public services, while Ras Malé had yet to receive comparable development.

The minister argued that the value of reclaimed land without infrastructure could not be directly compared with that of an established city.

Citing Thilafushi as an example, he said industrial land on the island, which is located near Malé and is being connected to the capital through a bridge project, had been sold for approximately MVR 1,750 per square foot.

He said even comparing Ras Malé with Thilafushi would be a generous assessment, given the current development status of Ras Malé.

Muththalib said land reclamation did not mean that every square foot of a development could be sold.

Referring to land-use plans for Hulhumalé Phases 1 and 2, he said planned cities required land to be allocated for housing, commercial activities, industrial purposes, mosques, schools and other public facilities.

According to the minister, approximately 239 hectares of the 500 hectares allocated under the Ras Malé development would be available for sale.

He said the remaining land would be required for roads, public facilities and other infrastructure.

The minister explained that the 239 hectares represented the maximum area available for residential, commercial and industrial development under the proposed land-use arrangement.

He also noted that land could only be sold after essential infrastructure had been established.

Muththalib estimated that providing electricity, water, sewerage systems, roads and other infrastructure across 500 hectares would require approximately USD 1 billion.

The minister said previous reclamation projects in the Maldives demonstrated the financial difficulties associated with developing infrastructure on reclaimed land.

Although substantial areas had been reclaimed, he said municipal services had been completed on only a relatively small proportion of that land.

He attributed this to difficulties in securing financing and completing infrastructure projects within the timeframes expected by the public.

Referring to Gulhifalhu, Muththalib said approximately 230 hectares had been reclaimed, but an estimated USD 400 million would still be required to establish roads and municipal infrastructure.

He added that further investment would be necessary to construct a power station.

Despite Gulhifalhu being connected to Malé through the Thilamalé Bridge project, the minister said securing financing for its infrastructure remained difficult.

He questioned how USD 1 billion could be raised to develop infrastructure on 500 hectares of Ras Malé, which is not connected to Malé by a bridge, when financing the USD 400 million required for Gulhifalhu remained a challenge.

Muththalib also presented calculations challenging the valuation of land allocated to Eagle Hills.

He said 500 hectares was equivalent to approximately 53.8 million square feet.

Of that area, approximately 48 per cent, or 25.7 million square feet, would be available for sale for residential, commercial and industrial purposes.

Using a land price of MVR 1,750 per square foot, similar to the rate cited for industrial land in Thilafushi, the minister estimated that selling the entire available area would generate approximately MVR 44.9 billion, equivalent to USD 2.9 billion.

He said this represented the maximum potential revenue if all the available land were sold at current prices.

After accounting for infrastructure investment, the minister estimated that approximately USD 1.5 billion would remain.

He argued that even under a scenario in which all available land was sold at current prices, the amount would be considerably lower than the USD 3.1 billion the government expects to receive through its 10 per cent share of the master developer's revenue.

Muththalib also disputed estimates of the cost of reclaiming land for the Ras Malé project.

He said reclaiming approximately 1,000 hectares would require 39.2 million cubic metres of sand.

According to the minister, reclamation costs range from USD 6 to USD 10 per cubic metre.

He estimated that even at the higher end of that range, reclaiming the entire Ras Malé area would cost less than USD 500 million.

The minister said the reclamation cost attributable to the 500 hectares allocated to the Eagle Hills project would therefore be less than USD 250 million.

He maintained that the value of reclaimed land should not be assessed solely on the basis of property prices in developed areas without considering the investment required to make the land suitable for development.

The minister outlined several sources of revenue that he said the government could receive under the proposed Eagle Hills development arrangement.

These included a 10 per cent share of the master developer's revenue, estimated at approximately USD 3.1 billion, or MVR 47.8 billion.

He also estimated that a 4 per cent fee charged on property transfers, including initial sales, could generate approximately USD 1.24 billion, or MVR 19.12 billion.

Additional government revenue could come from Goods and Services Tax (GST) and Tourism Goods and Services Tax (TGST) generated through economic activities associated with the development.

Muththalib said he welcomed criticism of the Eagle Hills agreement and further examination of its terms, arguing that such scrutiny could help improve the outcomes of the project.

The minister also said approximately 500 hectares, representing about half of the Ras Malé development, would be reserved for Maldivian families.

He estimated that this area could accommodate a population of 200,000 or more.

Muththalib said a population of that size would require employment opportunities and argued that economic activities developed on the remaining portion of Ras Malé would help provide those jobs.

His comments come amid debate over the proposed Eagle Hills development, particularly the allocation of 500 hectares of reclaimed land, the financial returns expected by the government and the long-term economic implications of the project.