HDC faces MVR 11 Billion loss from former government’s ‘Binveriya’ scheme

10 Jun 2024 | 17:40
Land reclamation in Hulhumale' phase III (Photo/Urbanco)

The Housing Development Corporation (HDC) has reportedly incurred a loss of nearly MVR 11 billion due to the issuance of free plots under the 'Binveriya Scheme' initiated by the previous government, according to a recent report from the Auditor General's Office.

The Auditor General’s report, published on Sunday, reviews the budget position and mid-term budget for 2023.

It highlights that the government committed to compensating HDC with MVR 10.5 billion (USD 680.93 million) for plots distributed under the 'Binveriya' (landowner) scheme, which included several plots in Hulhumalé.

Documents provided by HDC estimate the losses from these land allotments range between MVR 7.2 billion and MVR 10.5 billion.

The breakdown includes a land value of MVR 7.7 billion and an additional MVR 3.3 billion in lost revenue from potential commercial use of the land.

The report also notes that the previous government has made provisions to settle these losses. Specifically, the Auditor General's Office confirmed that the previous government allocated two lagoons, Galufalhu and Maagirifalhu, each valued at MVR 3.3 billion, to HDC as compensation for the revenue losses. Additionally, the government instructed HDC to negotiate with the Ministry of Finance to settle the remaining land costs, amounting to MVR 7.7 billion.

The Auditor General's Office emphasized the significant fiscal burden that the free land allocation under the 'Binveriya' scheme imposes on the government in the coming years.

In our view allocating plots of lands for free under ‘Binveriyaa’ scheme has resulted in a considerable fiscal burden for the government for the upcoming years

the Auditor General’s Office said in the report.

The land plots in question total 1,000, covering 1.2 million square feet, and were issued during former President Ibrahim Mohamed Solih's administration.

Including these 1,000 plots, the previous government aimed to issue a total of 9,000 plots to Malé residents, with additional plots from Gulhifalhu, Giraavaru Falhu, and Hulhumalé.