Adhadhu has learnt that Capital Marine and Civil Construction (CMC) agreed not to go to arbitration after the government signed a USD 21 million (MVR 323 million) settlement deal after cancelling the agreement for Rasmale' reclamation between Housing Development Corporation (HDC) and CMC.
HDC first awarded the Rasmale' project to CMC to reclaim 1153 hectares of land in the Fushi Dhiggaru lagoon. The company was contracted to begin work in December 2023 and conclude the reclamation within eight months.
In return, CMC was promised development rights for 99 years from 10 hectares of land in Hulhumale' and 60 hectares of land in Fushi Dhiggaru lagoon. The government claimed the project would be implemented without any funding from the state budget or the HDC budget.
Under the agreement, CMC completed the reclamation of 29 hectares of Site J. The project has since been stalled and HDC canceled the contract last year.
Following the cancellation, some media outlets reported that CMC was planning to go to arbitration to seek USD 4 billion in compensation. However, reliable sources confirmed to Adhadhu that the two companies had signed a settlement agreement to avoid arbitration.
Under the settlement agreement, HDC agreed to pay USD 21 million (MVR 323 million) to CMC for the 29 hectares of land reclaimed from Site J. HDC decided to pay the money in instalments. Adhadhu earlier reported that MVR 77 million has been paid to the company.
HDC later signed agreements with three companies to reclaim the remaining 11 sites. These include China Railway Construction Corporation (CRCC), China Harbor Engineering Corporation (CHEC) and Mohan Mutha Exports (MME).
Neither the government nor HDC disclosed the details of the agreements signed with the three companies. But the project is now being carried out with loans taken by HDC to pay to these companies. However, the total loan amount and total project cost are unknown.
MME has already started work by reclaiming 40 hectares from one site. Satellite images viewed by Adhadhu do not show any work on the sites assigned to the other two companies.
The Rasmale' reclamation project will be the largest ever undertaken in the Maldives under President Dr. Mohamed Muizzu's initiative to find a "total solution" to the housing problem.
The project’s land reclamation, revetment and beach protection work is expected to cost more than USD 700 million while developing the island to inhabitable standards will cost just as much, if not more.
According to these figures, the entire project is expected to cost more than USD 1.4 billion.
