The government is planning to relocate the central commercial port from Malé to Thilafushi and sign a joint venture agreement with Dubai Ports (DP) World to develop the port as a free zone, the cabinet’s economic council has revealed.
Speaking at a press conference at the President’s Office yesterday, Tourism Minister Ahmed Adeeb said “advance discussions” have taken place with DP World about a joint venture with the government.
“In my view, such progress shows the confidence in the Maldives,” the co-chair of the economic council said.
Economic Development Minister Mohamed Saeed and Youth Minister Mohamed Maleeh Jamal would depart for Dubai on Wednesday night to sign a Memorandum of Understanding (MoU), Adeeb said.
DP World is one of the largest marine terminal operators in the world and currently manages more than 60 terminals across six continents.
The envisioned free zone at Thilafushi port would include facilities for bulk breaking and transhipment cargo handling, Adeeb said.
DP World has expressed interest in investing in the port project, he continued, and negotiations were ongoing concerning details of the joint venture between the Emirati company and the Maldives Ports Limited (MPL).
DP World would be required to keep existing local staff at MPL, bring Maldivians to the top management and provide training, Adeeb said.
The project would be divided into three phases with an estimated investment of between US$250 and US$300 million, he said.
Adeeb explained that DP World would be offered incentives under the government’s flagship Special Economic Zones (SEZ) Act with “a free trade zone area” and relaxed regulations.
A larger port was essential logistically if 50 new resorts were to be developed, he continued, noting difficulties at present in importing and clearing resort supplies through the central port.
The government would also hire a port expert for the negotiations to ensure the “best deal” for the Maldives, he added.
Economic Development Minister Saeed said the Maldives was ripe for “an ocean economy” and the current administration has undertaken unprecedented efforts to diversify the economy with a focus of maritime businesses.
Congestion was a serious problem at the Malé commercial port, which has space for about 60,000 containers, Saeed explained.
The SEZ investment board was in the process of finalising plans for establishing “a free zone or dedicated free trade zone” at the port, Saeed revealed.
During last year’s budget debate, opposition MPs expressed skepticism of the government’s forecast of US$100 million expected as acquisition fees for SEZs by August 2015.
The opposition has also criticised the lack of significant foreign investments despite assurances by President Abdulla Yameen’s administration with the passage of the SEZ law last year.
Saeed meanwhile noted that the seaport project was announced in April last year at an investor forum in Singapore.
“So in a very short period of time, we have steadied the economy, stabilised the currency, increased the gross reserve, increased investor confidence, and while solving issues in the domestic environment or arena, we are seeing today that what this government is doing is real governance,” he said.
“So citizens should rejoice. And I believe that the progress we are making is unprecedented in recent history.”
Adeeb also said projects to construct a new terminal and second runway at the Ibrahim Nasir International Airport (INIA) as well as a bridge connecting the capital to Hulhumalé would begin before the end of the year.
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