Minister of Tourism Ali Waheed declared, on Sunday, that the government has decided to nullify the lease agreement made with Hotels and Resorts Construction (HRC) to develop Odegalla, Gaafu Alif Atoll, as a luxury resort.
Disclosing that HRC has already begun development on the island, Ali Waheed stated that the company was requested in writing to halt any ongoing work immediately.
"The next step is nullifying the agreement", Waheed said, adding that he will seek President Ibrahim Mohamed Solih's advice regarding the matter.
Prior to this announcement, Environment Protection Agency (EPA) had released a statement highlighting the disadvantages of developing Odegalla into a resort considering the notable characteristics of the island.
According to EPA, Odegalla provides a habitat for various bird species, including the rare White Tern, in addition to being a popular nesting site for them. The island is also favoured by turtles as a breeding ground during a certain period of the year.
Odegalla was leased to HRC's Chairman Mohamed Ali Janah in former President Abdulla Yameen Abdul Gayoom's administration. Tourism Ministry states that the island was leased out lawfully at the time.
HRC had formerly paid USD 96,000 to the authorities as an acquisition fee for Odegalla. The current government has yet to disclose how the company will be compensated for their losses.