With this, islands which are going to be used for economic development projects will be marked off as industrial islands.
Touropia
On 17th May 2023, the Ministry of Economic Development of the Maldives published the ‘Regulation on lease of uninhabited islands for economic development’. With this, when it comes to islands that are going to be used for economic development, the Government is no longer required to undergo the bidding process.
In this Regulation, which was published on the Gazette website, the Government outlined three categories of islands which will not fall under this new amendment and will be required to follow the bidding process. These islands include those islands which are leased under the Tourism Act, islands which have been leased for the Fishing and agriculture industry, and islands which are written off for lease under the uninhabited island Act.
Under this regulation, islands which are going to be used for economic development projects will be marked off as industrial islands. These decisions will be made by the President as advised by the Economic Council. While it may sound like it is an easy process, there are rules and guidelines that need to be followed in order for an island to be considered under the economic development aspect.
In order to make the decision as to which party will acquire the island for economic development projects, the Government will closely look at the party that submits the best proposal after the announcement is made and whether or not the party who applied the proposal acts accordingly with the Unsolicited Proposal Policy (the procedure for submitting a proposal to the government without invitations to bid).
Though leasing islands for development projects to parties after forgoing the bidding process might seem like a risky one, the Ministry of Economic Development still holds the power to charge the party an acquisition fee beforehand as a security measure which will be solely dependent on the size and value of the island that is being leased off.
In addition to this, the agreement between both parties is further secured through an agreement or a contract which is usually signed between the parties for a validity period of 21 years. And if both parties agree to increase the validity period beyond 21 years, the law does not allow it to exceed 50 years and a hefty investment has to be made as a security measure as well.
