Future of Gulhifalhu in doubt as government halts project

Additional reporting by Ismail Humaam Hamed

The future of the Gulhifalhu development project appears uncertain as the government called a halt to proceedings, being said to have deemed the island unfit for habitation.

A buyer’s association – comprising seven families who made down payments on flats four years ago – now fear their investment may be lost.

“We are not big businessmen. We are simple people who gave up all our life savings because we wanted accommodation near the capital Malé,” said the association’s representative Adam Nadeem.

After paying the 30 percent – or MVR500,000 – of the cost of each flat in 2010, with a promise of a new home in 6 months, buyers were informed last week that the government had suspended further development, he explained.

Global Project Developments (GPD) have today said that the plan to build housing units was formulated upon the request of the state-owned Gulhifalhu Investments Ltd (GIL) and that all necessary permits were obtained in 2011.

“GPD believes that if there are any issues which would affect the livelihood of habitants of the island it is the responsibility of the government and GIL to address those issues,” read a press release from GPD.

GPD – a subsidiary of the UK company Capital Investment and Finance Ltd (CIFL) – went on to accuse GIL of failing to uphold its part of the agreement in registering the houses with the relevant authorities.

The project to develop the submerged reef situated between the islands of Villingili and Thilafushi – just minutes from the capital Malé – was signed in 2007 under the government of Maumoon Abdul Gayoom.

Investment plans

Initially envisioned as an industrial project, the development was amended after the arrival of the Maldivian Democratic Party (MDP) administration, taking on the title of the Global Green City, and focusing on housing units to ease congestion in the capital city.

CIFL, having signed a 35-year lease agreement with the state-owned GIL, then established GPD in order to continue the reclamation and development of the island.

After the completion of the first housing units last month, however, the cabinet’s Economic Council informed GIL that the island was not fit for habitation due to health and geological factors, reported local media.

The island is located just 200 yards from Thilafushi – often referred to as a ‘toxic bomb’ owing to the fumes produced as much of the nation’s waste is burned on site.

Despite this, the Environmental Protection Agency had issued approval for the construction of 240 two-bedroom flats in November 2011.

Neither GPD nor the buyers association have been provided a copy of the GIL statement. Officials from the President’s Office were unavailable for comment at the time of publication.

Nadeem explained that meetings with the President’s Office and the Economic Council last December had been positive, with no sign that the future of the development was in danger.

Indeed, the Maldives’ first amusement park opened on the island the same month, with locals now visiting from the neighbouring islands every weekend. Additionally, two beach villas are available for visitors wishing to stay overnight.

Investor confidence

The disruption to the Gulhifalhu project is the latest in a series of foreign investor agreements that have faced difficulties after a change of government.

The Tatva waste management project became the latest deal signed under the MDP government to founder last month, with the government announcing that it wished to use a state-owned company to provide such services in the capital.

Deals for both border control and – most notably – airport development were also terminated by the government of Dr Mohamed Waheed, while the Tata housing project in Malé was delayed for two years as the incoming administration sought revised terms.

Assuming power in November 2013, the government of President Abdulla Yameen has sought to rebuild investor confidence, making the introduction of special economic zones (SEZ) the cornerstone of its economic policy.

The fostering of an investor friendly environment is intended to facilitate the development of a number of ‘mega projects’ which the administration hopes will move the economy away from its current dependence on tourism.

The SEZ bill was passed in September, and China has signed a preliminary contract agreement on the development of Ibrahim Nasir International Airport as well as promising to “favorably consider” financing the bridge project.

Proposed projects in the Malé region include the continued development of Hulhumalé to house the capital’s overflowing population, the construction of the Malé-Hulhulé bridge, and the relocation of the country’s main port from Malé to Thilafushi.


Bridge needed between Male’ and Hulhumale’, says President

President Mohamed Nasheed has said it is necessary for the government to built a bridge connecting the islands of Male’ and Hulhumale’ to improve transportation and development on both islands. This statement was made after the President presented documents of guarantee to flat recipients in Hulhumale’, as provided by the Veshi Fahi Male’ de-congestion program.

The President said a ferry system was insufficient to accommodate the growing populations on both islands.

The Veshi Fahi Male’ housing project is expected to add 10,000 flats to Hulhumale’. 8,000 flats are currently being constructed.

2500 flats were said to be built under Phase 2 of the Gulhifalhu development project, which is set to begin next month, reported the President’s Office.