Govt touts MVR 647b Ras Male land gain for MVR 40b land loss as 'golden opportunity'

Urbanco Managing Director Ibrahim Fazul Rasheed said on Thursday that the agreement signed between Sri Lanka’s Capital Marine and Civil Construction Company (CMC) to dredge the Fushidhiggaru lagoon and develop Ras Male will not be available even if the project was opened for an international tender. He said that it is a golden opportunity for the people.

Work on the K. Fushidhiggaru lagoon reclamation project began on Monday. Urbanco held a press conference on Thursday amid concerns over non-disclosure of the cost and contract details of the project.

When asked by a journalist whether the contractor was hired through an international tender, Urbanco's Fazul said, “This is an offer that cannot be obtained by opening an international tender even”.

Fazul said the project was awarded to the best bidder after considering three bids received from international bidders.

Fazul questioned which international company would reclaim the land at the contractor's own expense without any expense from the government.

Fazul said the people need housing and Ras Male will fulfil the promise of 65,000 housing units in the government's manifesto to solve the problem.

“Therefore, I believe that even if it is opened for international bidding, there will be no better or more complete proposal,” Fazul said.

"It's that we're not putting in money, we're just issuing a corporate guarantee from HDC's capacity, a USD 25 million corporate guarantee. It's just a guarantee”.

The only thing given before the reclamation, according to Fazul, was 10 hectares of land in Hulhumale. The 60 hectares of land from Ras Male will be given after the dredging of the land. In return of the two lands, Urbanco will get 1,093 hectares of land, he said.

CMC has been given 10 hectares of land in Hulhumale before the dredging of Ras Male. Fazul said the company will determine the price at which the land will be sold to third-parties. The money will first go into an escrow account between Urbanco and CMC, and only be released to CMC as the dredging project progresses.

"We are giving 10 hectares. The company has the power to sell it for MVR 2,000 or MVR 3,000. It is up to the company. We will not involve ourselves in it," he said.

"However, the proceeds will go into an escrow account of HDC. We will make progressive payments to the company based on its progressive development”.

Although not opened for international tender, Fazul said the companies involved in the work include renowned companies such as CMC, Boskalis and China State.

“So I would say that the opportunity we have now is a good opportunity,” Fazul said.

When land was last sold in Hulhumale, it was at an average rate of MVR 5,550 per sqft. At that rate, the value of the 10 hectares of land allocated to the CMC from Hulhumale would be MVR 5.2 billion.

At that price, after Ras Male has been developed:

However, this is an example. The value of the land in Ras Male can be calculated by preparing a master plan. There are also other factors that are considered in calculating the value of land such as the resources available and the speed of population.

Fazul said on Thursday that the master plan for the city has already begun.

Instead of acquiring the land, CMC can develop or sell the total 70 hectares of land given from Hulhumale and Ras Male, Fazul said, in accordance with the master plan drawn up by Urbanco.