Reduced island lease rates in six atolls for tourism development

Reduced rates have been introduced for the leasing of islands for tourism development across six atolls under the cross-subsidy model.

In an announcement on Sunday, Tourism Ministry stated that the concessionary rates apply to islands in Haa Alifu Atoll, Haa Dhaalu Atoll, Shaviyani Atoll, Thaa Atoll, Laamu Atoll, and Addu Atoll. The reduced rates will remain in effect for two years.

According to the rates established by the Ministry, the base lease rate for islands in Haa Alifu, Haa Dhaalu, Shaviyani, Thaa, and Addu atolls is set at USD 400,000, with an additional rate of USD 35,000 per hectare. Meanwhile, the base lease rate for islands in Laamu Atoll is USD 700,000, with a rate of USD 600,000 per hectare.

As reported by state media, PSM, citing the Ministry, the cost of acquiring a lease is calculated by adding the base rate to the product of the per-hectare rate and the total land area, along with any applicable size premium. No size premium will be imposed on plots ranging from 20 to 40 hectares. However, plots exceeding 41 hectares will incur a size premium of USD 500,000.

The Ministry stated that the land area of each island will be determined through surveys conducted within the mean tide line. Permission for land reclamation will only be granted following payment of the acquisition cost for the area designated for reclamation.

Cross subsidy refers to the allocation of islands, land, or lagoons by the state as an incentive, concession, or form of compensation to a party undertaking a project under a pre-announced economic or social policy for public benefit, using its own funds to meet a predetermined investment amount.