The USD20 billion Eagle Hills project in Rasmale’, which includes a waterfront marina and real estate developments, was planned in part to address the Maldives’ shortage of US dollars, Finance Minister Hassan Zareer said.
Speaking on PSM’s Raajje Miadhu programme last night, Zareer said Eagle Hills had already opened the opportunity for investors to express interest in purchasing lease rights to properties within the project.
The proceeds from the sale of the lease rights will be deposited into an escrow account maintained with a bank in the Maldives agreed with the government, he said.
“All the revenue from the project is being deposited in an escrow account at the time of selling the lease rights, in a bank agreed to with the government of Maldives,” Minister Zareer said.
He said the Maldives receives around USD5 billion in foreign currency earnings annually, but a significant portion of those earnings does not enter the domestic banking system.
Maldives Monetary Authority (MMA) has also noted that a large portion of dollar earnings generated by the country remains abroad, he said.
Minister Zareer said the project was designed to ensure that revenue generated through the development enters the Maldivian banking system.
“So in this project we will plan things so that this does not happen. It will be ensured. I said this project will be escrowed and these dollars [will go] into the banks of the country and the economy, the people and resolve these issues. So it will be a huge relief,” he said.
Minister Zareer said the project would generate USD30 billion in its first year and around USD2 billion annually thereafter.
He said the first-year revenue would come primarily from the sale of lease rights to properties developed by Eagle Hills in Rasmale’, while subsequent revenue would be generated from operating the developments.
“This is a project that will bring about bigger changes than we can imagine, a bigger change for the economy,” Minister Zareer said.
Housing Minister Abdulla Muththalib said yesterday that contractors and suppliers working on the project would be paid through accounts held with licensed banks in the Maldives.
He said proceeds from the sale of units would be processed through escrow accounts maintained in the Maldives in accordance with the Real Estate Act.
Minister Muththalib also said the project had been agreed without tax holidays or exemptions, with activities in Rasmale’ subject to the country’s existing tax laws.
He said this would help keep the project’s cash flow within the Maldivian banking system.
The government will receive 10 percent of proceeds from the sale of commercial properties, while a 4 percent registration fee will apply to each real estate transaction in the first and second phases, he said.
Eagle Hills is a private real estate investment and development company with projects in more than 18 countries and a portfolio that includes 45 hotels, according to the government.
Its chairman, Mohamed Alabbar, is also the founder of Emaar Properties, which developed projects including Burj Khalifa and Downtown Dubai.
