Site suitability studies

Maldives Government lease islands and lagoons for tourist resort development. Sometimes islands are too small, and new land may need to be created. And where lagoons are leased the entire island may have to be created. This is where a site suitability study becomes important.

What is it?

A site suitability study determines the environmental suitability of a lagoon for a proposed development project. A site suitability study generally entails a bathymetric survey, sand suitability analysis, current measurements and tide analysis to inform:

  • the depth of the lagoon;
  • availability of sand for reclamation;
  • maximum land area that can be reclaimed;
  • potential shapes of the reclaimed island; and
  • access points to the island, taking into account location of the channels.

Why is it done?

There are no laws, regulations or written policies or procedures formulated by the Ministry of Tourism (“MOT”) in prescribing that a site suitability study must be undertaken. However, it is standard practice by the MOT to allow investors the opportunity to visit a lagoon prior to signing a lease and to undertake site suitability studies.

The MOT considers the basic site suitability (such as size, features, reclamation feasibility, proximity to environmental protected areas etc) of the lagoons and islands it announces as available for lease, prior to listing such lagoons and islands as available.  However, the MOT does not carry out detailed site suitability studies nor warrant that a lagoon or island listed as available will be suitable for development.  The MOT requires a potential lessee to conduct the studies it requires to satisfy itself as to the lagoon or island’s suitability.

Why is it important?

Increasingly it is becoming standard practice for lease agreements to restrict a lessee’s ability to swap a lagoon or island, including if, subsequent to signing the lease, the lessee discovers that the site is not suitable.

Even if a lease does not expressly prohibit swapping, the MOT has stated that it will not allow swapping of a lagoon or island after signing a lease agreement for such lagoon or island.

In addition, many leases require the lessee to warrant that it has verified the suitability of the lagoon or island.  This means that the lessee will not be entitled to relief (such as an extension to the deadline for construction completion), in the event that the site is not suitable for development.

How to arrange a site suitability study?

There are many local companies that undertake comprehensive site suitability studies.  Generally it takes 2 weeks for a study to be completed, although this depends on the weather, the location of the lagoon, and the studies required to be undertaken.

DISCLAIMER

The contents here are general in nature and are provided for information purposes only. Its contents do not constitute professional legal advice. Every user is requested to seek independent professional advice in specific matters.

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