The regulation of cross-subsidy projects has been revised to offer concessions to those who fund government projects exceeding USD 10 million in expenditure.
The regulation of cross-subsidy projects has been revised to offer concessions to those who fund government projects exceeding USD 10 million in expenditure.
Originally, the regulation stipulated that an island, land, or lagoon would be granted if the total subsidy amount was paid in full. However, in December of last year, the government amended this rule. The new requirement mandated that project undertakers pay USD 1 million (MVR 15 million) upfront. Upon payment, the island, land, or lagoon would be leased to them.
As of today, this regulation has been further updated. According to the newly gazetted regulation, if the total expenditure for the island, land, or lagoon exceeds USD 10 million, the project undertaker must pay 50 percent of this amount before signing the agreement to be granted the lease. The remaining 50 percent must be paid off before the year ends.
The Cross-Subsidization Regulation outlines procedures for leasing islands, lands, and lagoons for tourism purposes in exchange for undertaking specific government-determined projects or providing financing for such projects. The president holds the sole power to approve cross-subsidy projects, while the economic council is responsible for selecting the project awardees after reviewing all submitted proposals.
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