Maldives to expedite stalled resort developments

The Maldives government is taking a two-pronged approach to deal with islands allocated for resort development that have seen no progress, according to Tourism Minister Ibrahim Faisal.

These unbuilt islands represent a significant missed opportunity for the tourism industry, with the Ministry of Finance estimating a loss of $1.7 billion annually due to stagnant development.

The Economic Council has proposed two options:

• Reclaim Islands or Renegotiate Leases: Islands with no development will be reclaimed by the state if leaseholders cannot afford to build. These companies may face significant penalties or be forced to relinquish the lease entirely, opening the door for new investors.
• Revive Stalled Construction: For islands where some construction has begun, the government will explore ways to value the investment and potentially offer special arrangements to incentivise completion. This could involve lease amendments or other concessions.

Minister Faisal highlighted the problem of islands that have sat undeveloped for decades, accumulating rent and fines for leaseholders. The government is proposing amendments to the Tourism Act to address these situations and expedite development.

While the option to reclaim undeveloped islands exists, Minister Faisal emphasised that the primary goal is to find solutions that lead to swift completion of resorts.

This is not the first attempt by the Maldivian government to tackle stalled resort projects. Previous administrations offered concessions, but progress has been limited. Minister Faisal is currently engaged in discussions with leaseholders to find workable solutions.