It has come to light that President Dr. Mohamed Muizzu who earlier asserted that unfairly compensating with public funds should never be done, has decided to pay USD 21 million in compensation to Capital Marine and Civil Construction Company (CMC) using public funds.

The president has also cancelled several settlement agreements made in accordance with the decisions of the Settlement Committee, which was formed by former President Ibrahim Mohamed Solih’s administration to resolve issues arising from the sudden termination of agreements the government had made with some contractors.

According to a report by "Adhadhu" news, CMC had initially planned to go to arbitration to seek compensation for losses incurred when the Housing Development Corporation (HDC) terminated its agreement with CMC. However, the news outlet learned that CMC has agreed not to pursue arbitration after the government signed a settlement agreement for USD 21 million dollars which is approximately MVR 323 million.

The incumbent administration began the work of reclaiming 1,153 hectares of land from Fushidhiggaru lagoon under the name ‘Ras Malé’, despite the 19th People's Majlis advising the government not to proceed with the project using public funds.

Although MVR 400 million was included in the 2024 budget for reclaiming Fushidhiggaru lagoon, the 19th People’s Majlis assembly, with a majority of the now main opposition Maldivian Democratic Party (MDP), completely removed the project from the budget, stating that there was no way to secure the funds and that it would be better to complete the many ongoing development projects in the islands of the Maldives.

However, the incumbent administration proceeded with the project by assigning it to CMC, disregarding the parliament recommendation. The president has repeatedly stated that development projects in the islands are not progressing due to how the previous People’s Majlis assembly prepared the budget.

At the time, the incumbent administration portrayed to the public that Fushidhiggaru lagoon was being reclaimed without any expenditure from the state.

When the incumbent administration secretly assigned CMC to reclaim 1,153 hectares of land, in addition to giving 10 hectares of land from Hulhumalé, the government had agreed to provide 99-year lease rights for 60 hectares of the reclaimed land in Fushidhiggaru lagoon. Based on estimates at the time, the value of the land released by the government to CMC for the project was expected to be at least MVR 34 billion.

After CMC had completed part of the assigned project and later when the project had significantly slowed down, HDC terminated the agreement in 2024. It is reported that CMC decided to take the matter to arbitration as a result.