The government has decided to terminate an agreement made with Capital Marine and Construction Company (CMCC) to reclaim land for the development of the Fushidhiggaru lagoon in South Male’ atoll as “Rasmale’.”

At a press conference on Thursday, Construction Minister Dr. Abdulla Muththalib admitted that reclamation work under the government’s flagship project has stalled.

In a post on X after sharing a news article on the subject, the minister said that the government decided not to provide further opportunities when the contractor failed to deliver in line with the agreement. The main reason for this was because the government wanted to carry out the project with financing to be arranged through contractors without awarding land from the Male’ region, he said.

“God willing, work on reclaiming Rasmale’ will begin very soon,” the minister wrote in his post.

Responding to a question from Adhadhu at Thursday’s press conference, Muththalib said the project stalled because CMCC failed to raise finances as proposed by the contractor.

The government previously believed reclamation work would proceed as proposed because there were two dredgers from CMCC’s partner Boskalis in the Maldives at the time, the minister said.

“That’s how they proposed as well. However, when they didn’t carry out work as such, the government is now finding another way,” Muththalib said.

The Housing Development Corporation (HDC) is completing the legal processes for terminating the contract, Adhadhu has learned. However, this is no additional plan at present for carrying out the project.

No funds would be spent from the state budget on the project, which was launched on December 18, 2023, President Dr. Mohamed Muizzu said at the time, after Parliament omitted MVR 400 million allocated for the project in this year’s budget.

Payment for the Rasmale’ project was to be made by awarding 70 hectares of land to the Sri Lankan contractor, including 10 hectares from Hulhumale' and 60 hectares from the land to be reclaimed from the Fushidhiggaru lagoon.

Work on reclaiming 1,153 hectares from the 1,280-hectare lagoon south of Male' with a target of completion in eight months began without an EIA (environment impact assessment) for the whole lagoon. An EIA was only done for the 29-hectare site J.

Aside from about 10 hectares reclaimed from site J in the first week after work began, no other area has been reclaimed to date. But the government previously denied repeatedly that the project had stalled.

Despite President Muizzu saying on the project launch date that land reclamation would be completed without interruption in eight months, the deadline will pass on August 18. The government now says the work will be completed by the end of the year under a new plan.