Housing Minister: Setting Hulhumalé Land Price for Rasmalé a Major Economic Error

Housing Minister Dr. Abdullah Mutalib has stated that applying the current price of land in Hulhumalé to the land being reclaimed in Rasmalé would be a major economic mistake. The minister made the remarks in a LinkedIn post responding to a newspaper report which claimed that the 500-hectare plot of land provided under the partnership between the government and Eagle Hills for the development of Rasmalé is valued at $24 billion (approximately MVR 370 billion). Minister Mutalib explained that the $24 billion figure was derived by applying the current average land price in Hulhumalé of MVR 7,500 per square foot across the entire 500 hectares of Rasmalé. However, he said this is not a valid economic standard for determining land prices. He noted that when reclamation began in Hulhumalé in 1997, the price per square foot was not MVR 7,500. The first population of 1,000 people arrived there in 2004, and the population reached 50,000 in 2018 with the opening of the Sinamalé Bridge. The minister attributed the current high price of land in Hulhumalé to substantial state expenditures over 20 years for developing infrastructure such as roads, water and sewage systems, schools, health services, and the bridge connecting to Malé. He said the most fair benchmark for comparing Rasmalé, which lacks any service, economic activity, or bridge, is the price of Tilafushi, where land was sold at approximately MVR 1,750 per square foot. Dr. Mutalib further noted that only about 48 percent (239 hectares) of the 500 hectares in Rasmalé will be sold for residential, commercial, and industrial purposes, similar to Hulhumalé. He added that before selling this land, the state would need to spend one billion dollars (approximately MVR 15.4 billion) to establish basic services. The minister questioned how the state would secure this funding, noting significant challenges in securing $400 million for Gulhifalhu. The minister stated that the benefit to the state from the partnership with Eagle Hills is much greater than developing the land itself. According to him, the state will receive $3.1 billion as 10 percent of the developer's income, a transfer fee of four percent each time every property is sold (approximately $1.24 billion), and the developer will cover the cost of constructing 5,000 housing units in Hulhumalé before any revenue is generated from Rasmalé. He also noted that the land is being leased out for 99 years, and studies by Evals indicate the project will bring $22 billion in foreign investment and create more than 60,000 jobs.