News Desk
The government said on Monday that reclaiming the whole of Rasmalé, the artificial island south of Malé that President Dr Mohamed Muizzu calls the Indian Ocean’s first zero-carbon “eco-city”, will cost about $330 million, well below the $500 million to $700 million the housing minister gave in January 2024. The new figure, about 5.1 billion rufiyaa, was offered after six weeks of criticism over the island’s cost and over a deal to hand half of it to a Dubai-based developer.
Dr Abdulla Muththalib, the minister responsible for housing and infrastructure, announced it at the government’s tenth “Ahaa” public forum. He said the earlier range had been calculated from market rates and the cost of the previous government’s reclamation work at Gulhifalhu and Giraavarufalhu. Costs fell, he said, because state-owned companies did the work with chartered dredgers, and much of it was paid in rufiyaa, which eased pressure on the country’s dollar reserves. The 500 hectares set aside for the developer, Eagle Hills, would cost about $160 million, he said, out of a total of 1,009 hectares. He called higher figures political scaremongering.
The opposition has put the cost at about $800 million.
The claim is notable because of what has happened to fuel, a major cost for any dredging operation. Oil prices have been pushed up by the conflict between the United States and Iran and by attacks on shipping around the Strait of Hormuz. Brent crude traded at about $94 a barrel on Monday, roughly 47 per cent higher than a year earlier, even after a sharp fall last week from above $110 at the end of October. The minister’s earlier estimate dates from January 2024, before the current conflict, so a lower figure now, with fuel dearer, is either evidence of real savings or a sign that something has been left out.
The airport company’s debt to the State Trading Organisation, which supplies both jet fuel and fuel for the dredgers, tripled to 418 million rufiyaa in 2025, according to the Maldives Independent’s reading of the company’s accounts. In the remarks reported, the minister did not say whether his figure includes fuel supplied on credit or the interest on loans that financed the work.
A lower number does not settle the argument, because the argument has shifted. When the project was launched, the promise was that it would cost the state nothing. In January 2024, Dr Muththalib said three contractors would spend $700 million to reclaim 1,153 hectares, and would be paid with 70 hectares of land. President Muizzu said the work would take eight months and require no money from the state budget. The Housing Development Corporation ended its agreement with one of the contractors, Sri Lanka’s Capital Marine and Civil Construction, in May 2024. By July 2025, with less than 30 per cent of the lagoon reclaimed, the President’s Office had told the finance ministry to pay the contractors from the state’s foreign currency reserves, the online Adhadhu reported. Whether the final cost is $330 million or $800 million, the state is now paying.
The bill is also not all in the budget. Audited accounts for 2025 show that the Maldives Airports Company, the profitable state operator of Velana International Airport, spent 435.3 million rufiyaa on Rasmalé through a new subsidiary, according to the Maldives Independent’s reading of the accounts. A second subsidiary took over the contractor’s claim and owes it a further 1.43 billion rufiyaa this year. The company’s dollar cash fell to $13.5 million from $29.1 million. Its management concluded the company remained a going concern, but said that judgement depended on continued support from the government.
If state companies carried the work, as Dr Muththalib says, their balance sheets are where the cost now sits.
The cost matters most because of what the state is giving in return. Under a commercial terms agreement signed on 21 September, Eagle Hills would develop 8,800 properties, hotels, a marina and other facilities on 500 hectares, nearly half the island. According to the minister, the company pays no acquisition fee or land rent. The state would take 10 per cent of its revenue from first sales and leases, which Dr Muththalib projects at $3.1 billion over 10 years, and a 4 per cent fee each time a property changes hands. Eagle Hills would also build 5,000 flats in Hulhumalé, worth about $500 million, as an advance against the state’s share.
Critics say the right comparison is not what the land cost to make but what it is worth. Their estimates run from $7 billion to $24 billion. The minister puts the best-case value at $2.9 billion, or about $1.5 billion after roughly $1 billion of roads and utilities. A lower reclamation bill helps his case on cost, but it also supports the argument that the state is giving up land worth far more than it spent making it.
The agreement itself has not been published. The attorney general calls what was signed a letter of intent. President Muizzu wants the definitive agreement signed before 17 November.
The real estate bill submitted to Majlis on Monday gives some of the detail. Each sale would bring a fresh 99-year lease, under what the bill calls surrender and re-grant. The constitution bars foreign ownership of land. The government says “not an inch” has been sold.
President Muizzu has ruled out a referendum. “This is not something on which we will conduct a referendum,” he told a news conference, adding that the bill protects Maldivians’ rights, sovereignty and the country’s laws. He said the project’s terms had been written into the bill, not left to regulations, and that Chapter 8 protects the rights of future generations.
The main opposition Maldivian Democratic Party has passed a resolution calling for a referendum. Its national council voted 57 to 1 to take to the streets with other parties and civil society groups if one is not held, with a deadline of 15 November. Mohamed Nasheed, the party’s chairperson, spoke against the resolution. He told the council he fully supported the project and warned that attacking the developer’s chairman could damage relations with the United Arab Emirates.
The foreign minister, Dr Irtisham Adam, made a similar warning at the Ahaa forum. “Political rhetoric surrounding such projects could impact diplomatic ties with the contractor’s home country,” she said, adding that the consequences could include travel restrictions for Maldivians and lost investment. She defended the project as vital to stabilising the country’s dollar reserves.
The government has now put a number on what the island costs it. It has not yet published the agreement that says what it gets back.
