Fayyaz Ismail, the Minister of Economic Development, has affirmed that the bunkering facility within the ambitious port city development project on Ihavandhippolhu will bring about a revolution to the Maldivian economy.

Speaking at the ceremony to finalise the agreement between the State Trading Organisation (STO) and Qatar’s Urbacon Trading and Contracting Company (UCC) for establishing the international bunkering facility, Fayyaz stated that the project will bring extensive development to the northernmost region of the Maldives.

He highlighted that the government’s vision was to establish the north as an economic hub, encompassing trading, manufacturing, and related industries to be established within the region.

Fayyaz pointed out that even though the initial project is being developed through STO, future projects will involve collaborations with international companies and private sector partners from the Maldives.

Current and former governments have been keen to capitalise on the economic potential of the northernmost atoll as Ihavandhippolhu is strategically situated along the 7 to 8-degree channel, which is frequently used by a majority of international shipping liners serving the east-to-west shipping route.

The government under former President Abdulla Yameen announced plans for an Ihavandhippolhu Integrated Development Project, named iHavan, which included investments in a transshipment port facility, airport development, a cruise hub, yacht marina, bunkering services, dockyard, real estate, and conventional tourism developments.

Although the project failed to materialise, President Ibrahim Mohamed Solih announced that his government would continue to assess the viability of the project, citing that the previous government’s announcement lacked solid planning.

Fayyaz noted that initial assessments showed that the project lacked feasibility, but further studies indicated that the right kind of investments and infrastructure would revolutionise the Maldivian economy.

More than USD18 trillion worth of goods are transported across the seven-degree channel annually, with over 70,000 ships crossing the Indian Ocean every year.

A 2004 study by Delft University of Technology noted that the short distance to the main East-West shipping routes and Ihavandhippolhu’s central position in the Indian Ocean for short feeder distances demonstrated great potential for the location as a transshipment hub.

Previous studies by the Ministry of Economic Development also showed that the atoll’s central location in the Indian Ocean, with access to more than 30 large cities within a radius of 4000 km, and access to a population base of approximately 1.7 billion people through the South Asian Free Trade Arrangement (SAFTA), was a key motivator for investing in the region.

President Solih envisions the region’s development as a comprehensive port city, and he has engaged international technical consultants to ensure meticulous execution that would mitigate potential environmental degradation.