Sri Lanka’s Capital Marine and Civil Construction (CMC) has been awarded a contract to reclaim land in Fushidhiggaru lagoon, indicating that the new government is preparing to launch the first phase of its flagship housing and urban development project. The move comes despite the opposition-controlled parliament removing the budget allocation of MVR 400 million for the project from the proposed budget for the next year.

An agreement was confirmed between Urbanco and Sri Lanka’s CMC to undertake the lagoon reclamation. However, specific project details remain undisclosed. CMC is also responsible for the now paused reclamation of Hulhumale phase three and Dhiyaneru lagoon.

The government’s plan for the Fushidhiggaru project spans three years with a proposed expenditure of MVR 1.4 billion. This ambitious initiative aims to reclaim 1,280 hectares of land from Fushidhiggaru lagoon, expanding it to three times the size of the combined two phases of Hulhumale. 

The project encompasses the development of elevated land to mitigate climate change impacts, the construction of 31,500 housing units, the establishment of a yacht marina and cruise terminal, and the creation of separate islands for guesthouses, tourism, business, and sports.

President Mohamed Muizzu has committed to providing housing for 65,000 people by reclaiming land not only from Fushidhiggaru but also from Giraavaru and Gulhifalhu lagoons, which are also undergoing reclamation efforts initiated by the previous MDP-led government.

This week, Urbanco temporarily halted the western lagoon reclamation project in Hulhumalé launched by the previous government to provide housing for Malé’s citizens. CMC had commenced the reclamation of the Hulhumalé lagoon, divided into three stages, with stage one already completed. 

Urbanco says the suspension of the project was attributed to the need for dredger repairs after stage one and environmental concerns, particularly coral regeneration, during November and December.

Although CMC initially planned to resume work this month, the work has already progressed ahead of schedule, and the project’s suspension is not expected to impact the timeline significantly. The availability of reclaimed land in Hulhumalé for Malé citizens, which was part of the initial plan, may now be subject to change under the current government’s revised strategy.

Urbanco’s Managing Director Ibrahim Fazul confirmed that land plots allocated under the former administration’s ‘Binveriya’ scheme in Hulhumalé Phase III would not be changed to Fushidhiggarufalhu. Housing Minister Dr Ali Haidar clarified that while the location of some plots might slightly differ, neither the plot size nor the issuing island would change. He said changes would only occur if the current administration had different plans for the areas in question.

On Wednesday, the Parliament passed the 2024 National Budget, incorporating recommendations from the Budget Committee. Funds initially allocated for the Fushidhiggaru Lagoon development project were redirected to ongoing housing projects in the greater Malé area and Public Sector Investment Programmes (PSIP) in the atolls. 

The move was intended to prioritise the completion of existing projects before embarking on new ones in the greater Malé area, as outlined by the Budget Committee Chair and Kinbidhoo MP Mohamed Nashiz.