Earlier this year, the Ministry of Tourism had invited eligible investors to submit their interest to develop tourist resorts in uninhabited islands in Northern and Southern Maldives. And yet, only one island was sold.
Ministry of Tourism reduced the lease acquisition cost of the islands to increase investments during April 2021. Within this project, 23 islands were opened for bidding to build around 16 resorts and only 1 island was awarded to the Parliament member of Kinbidhoo, Mr. Mohamed Naashiz’s company Pearl Sands. This island was sold for $700,000 (MVR 11 million) and it was the lowest price offered compared to the biddings of the other islands. The highest offer during this period to buy an island was $2.1 million (MVR 32million). However, no island was put on sale except for HA. Velifinolhu, which was sold to the parliament member.
Meanwhile, a lot of people are doubting the government in this decision; there are several complaints from the bidders as well. The tourism industry of the Maldives is one of the most successful businesses in the Maldives and a lot of foreign investors show their interest in investment opportunities in the Maldives. The main reason for this is because investors can get the return on investment within 2 to 3 years and start generating profit.
During this April, investors received a golden opportunity to buy the lands at a discounted price. While the bid committee received 13 offers it rejected all except for one offer. Most people believe that the Ministry of Tourism was unjust and preferential in making this decision.
Ministry of Tourism has rejected some biddings due to missing statements such as 1 month bank statements. Some believe that it does not justify the disqualification as this information can be provided and can be obtained from the bank. According to sources, the reason why the government disqualified the bidding offers are to later open up the islands for sale for higher prices as the real estate market was in a downfall in April.
The hospitality industry was affected severely due to the COVID-19 pandemic and this led to a decrease in the number of investors in this industry. As per UNWTO, there was an industry-wide loss of about $900 million to $1.2 trillion. Therefore, the bidding proposals received for the sale in April were considerably low as the investors did not want to take the risk during an uncertain period. However, the industry is making a recovery now and it is anticipated that the government will be able to generate more revenue if they open up the sale for the islands now.
One of the businesses that applied for the bidding this April was Interim Bio Tech LLC that offered $700,00 (MVR10.7 million). However, this bidding application was disqualified by the Ministry by stating that they were unable to verify the business registration. According to the Director of Finance, Mr.Soffathulah Shareef, they presented the registration of the company and their company is registered in the US. However, it was rejected and they did not receive any calls for verification purposes. He believes that considering the amount of time the bid evaluation company spent on the work and canceling it rejecting the bids at the last minute was unreasonable. Due to these reasons, Interim Bio Tech LLC has presented its concerns and complaints to the Ministry about the bid committee.
The islands put on for sale last April were from areas such as south and north where tourism is not well developed. According to the Ministry, these islands were the cheapest islands in the Maldives that were put on sale at discounted prices. The reason for this is to offer tourism development opportunities in other areas of the Maldives other than the Male’ area. The acquisition cost is the highest in the Male’ area and during last year there were amendments made to the lease and rental of the island.
According to the Ministry of Tourism, prices were not accounted for in the disqualification of the bidding and it was done due to the missing documents.
