Government Explores Options to Reclaim Kaadedhdhoo Airport Without Financial Burden

President Dr Mohamed Muizzu has announced that the government is working on a plan to take back Kaadedhdhoo Airport without incurring any financial burden on the state.

Speaking at the weekly press conference held at the President’s Office yesterday, Dr Muizzu said the process is being structured to ensure that no funds from the public treasury are used in reacquiring the airport from Villa Air. He added that legal advice is currently being sought from both the Auditor General and the Attorney General to ensure that the arrangement benefits all parties involved.

“We are now shaping this in such a way that we do not have to give anything from the people’s treasury,” Dr Muizzu said.

The development marks a shift from the government’s earlier position. In August last year, authorities had decided to offer USD 18 million (approximately MVR 277.5 million) to Villa Air, payable within 18 months. That figure was lower than the USD 21 million initially requested by the company.

Villa Air had accepted the revised offer, which included options for settlement through instalments or tax deductions. The valuation was based on an assessment by Ernst & Young, which estimated the development cost of Kaadedhdhoo Airport at around USD 100 million and placed its current value at USD 18.5 million.

The airport was originally leased to Villa Air in 2013 for a period of 50 years under an agreement involving businessman and Member of Parliament Gasim Ibrahim. However, the agreement was terminated in 2017 due to non-compliance with civil aviation standards, with a court later ruling the contract unlawful.

In 2022, control of the airport was returned to Villa Air. Under the agreement, the company was also allocated two lagoons; however, it remains unclear what will happen to these lagoons, which are guaranteed under the contract.

The government has not yet disclosed a definitive timeline for completing the takeover process.