Four thousand one hundred and twenty families were given land in Hulhumalé, free.
They are happy, and they should be. Most had waited years, some decades. Nobody who received a plot did anything wrong.
But somebody paid for those plots, and it was not the government. It was HDC, and HDC's accounts have been crying ever since.
What HDC lives on
HDC is not a government department sitting on an asset. It is a company. It earns some rent from property it has held back, but the business that funds everything else is selling land.
Those sales pay for roads, water, power and sewerage. The services make the next plots worth buying. Sell, build, sell, build.
That is how Hulhumalé was made, and it is how HDC services its debt — the borrowing was taken on against future land sales, because future land sales were the only thing that would ever repay it.
Take the land away and nothing else changes. The city still needs maintaining. The loans still fall due on the same dates.
The size of what was taken
HDC's last published position showed total assets of MVR 32 billion and borrowings of MVR 10.6 billion.
The Auditor General puts the revenue HDC gave up under Binveriya at between MVR 14.85 and 15.93 billion — roughly half of everything the company owned.
Half the assets gone. All of the debt still there.
And there was nowhere else to go
HDC did not have a second site. Its entire land bank was Hulhumalé. Phase I was built out and sold years ago. Phases II and III were the inventory — the stock meant to fund the next twenty years of roads, schools and flats.
Binveriya came out of exactly that stock.
So afterwards HDC was a land-selling company with no land to sell. Not short of land. Nothing in the warehouse, and a repayment schedule that did not care.
A company in that position has two futures. Somebody gives it an asset, or it defaults.
What Ras Malé did
In January 2025 the government and HDC signed a compensation agreement worth MVR 5.4 billion — Ras Malé at MVR 3.8 billion, plus tax, loans and penalties written off.
Read what it does rather than what it is called. It puts an asset back on a balance sheet that had lost half of one, and removes MVR 1.6 billion of liabilities at the same time. Both sides at once. That is the shape of a rescue, and somebody designed it.
It also gave a land-selling company land again.
And it was done early. That agreement was signed in January 2025; the audit that turned the loss into a public argument came out in May 2026 — sixteen months later.
Nobody checked
The audit's central finding is not that the policy was wrong. Giving land to people who need housing is a legitimate thing for a government to do.
The finding is that nobody did the arithmetic. No feasibility study. No research into the effect on state finances. No assessment of what HDC would need afterwards to stay standing.
And it does not say who failed to do it, which is the question nobody has asked.
Somebody inside HDC could have worked out in an afternoon what removing 2.84 million square feet would do to a balance sheet carrying MVR 10.6 billion of debt. It is not a difficult calculation. It is the calculation.
So either HDC did the work and was overruled — in which case the fault sits with whoever read the warning and proceeded — or nobody asked, and a shareholder disposed of half a company's assets without once asking the company what it would cost.
Board minutes from 2022 and 2023 would settle it in ten minutes.
Land that did not exist yet
And it was not only Hulhumalé, which is the part usually left out.
Binveriya allocated around 6,200 plots across three sites: Hulhumalé, Gulhifalhu and Giraavarufalhu. The audit figures cover the Hulhumalé portion, because that is HDC's land. The scheme itself was far larger.
Now look at the state those places were in when the plots were handed out.
The Hulhumalé allocation included plots marked out on the lagoon of Phase 2 — water that had not been reclaimed. At Giraavarufalhu, about 2,000 plots were reserved while reclamation was still under way, with roughly 20 hectares done. At Gulhifalhu, another 2,000 were set aside; the second phase of reclamation there was contracted to Boskalis at over 129 million dollars and completed afterwards.
So much of what was awarded in 2023 was, on the day of the award, open sea with a dredging contract attached.
The same shape is being set up again at Ras Malé, and the difference is worth stating precisely. The announced plan is 11,000 plots and 26,000 flats, on land that is still being reclaimed and has no roads, power, water or sewerage.
But nothing has been allocated. There is no list, no draw and no names — and that is a real distinction from 2023, when a final list of recipients was published before the dredgers had started.
What exists at Ras Malé is a target. What existed under Binveriya was a title deed to water. The second is far worse than the first, and this government has not done it.
The warning is simply that the temptation to close that gap will be strongest in the months before a vote.
A plot is not a plot until somebody can build on it. Awarding land that has not been made, with no money set aside to make it, is a promise dressed up as a title deed — and the cost of turning it into something real lands on whoever is in office when the dredger arrives.
Half the land, all of the uplift
Here is the part of the Eagle Hills deal that almost nobody has noticed.
HDC has not handed over Ras Malé. It has handed over half of it — about 500 hectares of roughly 1,009. The rest stays in state hands, earmarked largely for Maldivian housing.
That is what makes the arrangement work. The half HDC keeps is worth very little today. It is sand with no road on it. It becomes worth something only when there is a city beside it — which is precisely what Eagle Hills is contracted to build, with its own money.
So HDC is using half the asset to create the value of the other half. A developer pays to put up a waterfront, and the land across the road, which HDC still owns and can sell at its own pace, rises with it.
That is how Hulhumalé worked too. Early infrastructure is what made the later plots worth buying. The difference this time is that somebody else is paying for the early infrastructure.
Which is why it had to be commercial
And this is the part that explains the whole arrangement.
A lagoon handed out as free plots fills no hole. If all 1,009 hectares went the way Binveriya went, HDC would be exactly where it started — the same obligations, the same borrowing, and a second piece of land it could not sell.
Compensation only compensates if it can be turned into money.
So the only route back for HDC was to commercialise part of Ras Malé. Put a developer on it who pays for the right to build, who brings the capital, and who generates a revenue share and a transfer fee that keep arriving long after the first sale. That is not a preference. On a balance sheet missing half its assets, it is the only mechanism that works.
Which sets up a tension nobody has named out loud.
The government has promised 11,000 plots and 26,000 flats at Ras Malé. Every one of those given away free is one that cannot repay Binveriya. The commercial half is what makes the housing half affordable — and where exactly that line falls has not been published.
That is the real question about Ras Malé, and it is a harder one than whether a foreign developer should be there at all. How much of this island has to be sold so that the rest can be given?
And it is harder to give away
The Hulhumalé model was: sell a plot, take the money, the plot is gone. That is what made Binveriya so destructive. A plot given away is not reduced income. It is permanently removed income.
Ras Malé is not being disposed of that way. The state keeps a share of the developer's sale revenue, takes four per cent of the value every time a property changes hands — on the first sale and every resale and inheritance after it — and taxes everything trading inside the development.
HDC is not selling Ras Malé. It is keeping a permanent interest in everything that happens on it.
Under the old model one signature could remove an asset for ever. Under this one, even if a future government gave Ras Malé apartments away tomorrow, the state would still collect four per cent every time one was later sold.
The structure is harder to give away.
And nothing stops it happening again
Binveriya was legal. Every signature was in order. No rule was broken, because there is no rule. Nothing in Maldivian law required anybody to work out the cost first, or required HDC's view to be heard.
So a government can do the same thing tomorrow — to HDC, to STELCO, to Fenaka, to MWSC, to the airport company. Give away the asset, keep the applause, leave the debt, and face an audit eighteen months later when the land is gone and the government has changed.
That is not a party problem. It is a design fault, and it will catch whoever is in office next.
The people who got the land are happy, and they should be. The accounts are still crying, and they will keep crying until something is built on that lagoon.
Which leaves the question this country has never answered.
How do we stop a government from making a decision that sinks a company — before it is made, rather than eighteen months afterwards?