USD 53M for 6 million cubic meters, USD 50M for 7 million cubic meters

The project to reclaim land at Gulhifalhu in preparation of the relocation of the Male’ Commercial Port was contracted to Dutch company, Boskalis, last week. Boskalis was contracted the project for USD 53 million (MVR 817 million). It has been tasked with reclaiming six cubic meters of sand and building a revetment around the reclaimed land.

The biggest controversy surrounding the project is that it was awarded by the Maldivian administration without an open bidding process. Many have reasoned that the project could be carried out using Maldives Transport and Contracting Company (MTCC)’s large dredge, Maha Jarraf, for USD 44 million; saving USD 9 million of the cost.

However, MTCC’s CEO, Hassan Shah says it would take at least 600 days to complete the project using Maha Jarraf due to its limited capacity.

The Maldivian administration aims to commence port relocation at the beginning of 2020 – which can only be done by completing the land reclamation project by end of 2019 or by end of February 2020 at the latest.

Regardless of how much the Maldivian administration wants to rush the project, the question of whether Baskalis was awarded the project at a fair price remains. An answer to this can be reached through a comparison of the cost of similar projects awarded in the past.

One of the biggest land reclamation projects to be conducted in the Male’ area recent history is the reclamation of 245 hectors of land for Phase II of the Hulhumale’ Development Project. The project to reclaim the land and build a revetment around the reclaimed land was carried out by Belgian company, Dredging International, for USD 50 million.

The only marked difference between the land reclamation projects in Hulhumale’ II and Gulhifalhu is that land was reclaimed to the depth of 3 meters in Hulhumale’ II. Experts who spoke to Sun reported that land must be reclaimed to the depth of at least eight meters in Gulhifalhu. The depth of the Gulhifalhu Lagoon is between three to 12 meters.

Meanwhile, the biggest similarity between the two projects is that sand needs to be mined from a short distance away and carried using a hopper dredger. Sand was mined from the Vaadhoo Sea for Hulhumale’ II. Planning Ministry expects sand to reclaim Gulhifalhu will need to be mined from the depth of 50 meters – the same depth as for the Hulhumale’ II Development Project.

With regard to the size, the depth of Gulhifalhu means at least six cubic meters of sand is required - which will reclaim no more than 75 hectors of land. The main reason for this is that land needs to be reclaimed to the depth of eight meters – roughly the size of the largest Maldivian island.

The value of a project is primarily determined based on the quantity of sand required for land reclamation.

Additional factors which contribute to the value of such projects is the depth of the location, and the current– which could make it further challenging to reclaim land.

The location reclaimed for Hulhumale’ II Development Project had a depth of three meters. It is estimated that the project was completed using approximately 7.4 cubic meters of sand. The project was completed by Dredging International in 77 days (two months and 11 days). Dredging International was paid USD 50 million for the project.

Despite the similarities in the two land reclamation projects, the Gulhifalhu project is valued USD 3 million higher than the Hulhumale II project. The quantity of sand needed for Hulhumale’ II project is more than the sand needed for the Guhifalhu project. There is only one reason why the Gulhifalhu project should cost more than the Hulhumale’ II project – the difference in depth.  

The size of the area which will be reclaimed in Gulhifalhu is still smaller than Hulhumale II – therefore requiring lesser quantity of sand. However, the Gulhifalhu project is valued at USD 3 million more than the Hulhumale’ II project.