Ways to Reduce Hiyaa Flats' Rent Presented to Govt: Shuja

Councilor for Hulhumale’ at the Male’ City Council Ibrahim Shuja has stated that ways to reduce the rent decided upon by the current government for the 7,000 housing units constructed in Phase 2, Hulhumale’ during former President Yameen Abdul Gayoom’s tenure have been presented to the government.

Vice President of opposition People’s National Congress (PNC) Shuja made his statement in response to Managing Director of Housing Development Corporation (HDC) Suhail Ahmed. Following protests demanding a rent reduction for Hiyaa flats, Suhail tweeted that there is no way to reduce the rent.

The current government has determined a monthly rent of MVR 7,500 for each housing unit, plus an additional MVR 1,000 maintenance fee. Tenants have to pay a total of MVR 8,500 per month.

President Yameen’s government established rent at MVR 5,600, costing a monthly fee of MVR 6,600 after the maintenance fee. However, the current government has stated that the rent was not based on accurate figures.

The project required a total of MVR 6.6 billion in loans, including the MVR 1.003 billion loan from Credit Suisse for the project’s equity, and the MVR 5.6 billion loan from the Insurance Corporation of British Columbia (ICBC). The total interest rate for the loans was 3.36 percent, as the loans were accepted at a 3.3 percent interest rate, plus a LIBOR (London Interbank Offered Rate) of 0.3 percent. The previous government intended to maintain the interest rates at no more than four percent.

However, the government later published data showing that the first sum was given at an eight percent interest rate. This will cause each unit to cost MVR 10,000. The interest rate was later increased to 6.8 percent. The figure is not reachable even after the addition of the 2.0 percent LIBOR. The total interest rate adds up to five percent on an EMI calculator.

HDC’s 2019 audit report published by the Auditor General’s Office showed that the interest rate totaled 3.3 percent including LIBOR. Therefore, the interest rate has been increased to 6.8 percent by the government during a period where LIBOR was low. HDC has added three percent interest to the cost of the Hiyaa flats. HDC will benefit from increasing the interest rate while LIBOR is low.

Shuja tweeted that rent for Hiyaa flats can be reduced. He claimed that the ways to reduce rent have been presented to the government, and the units can be provided for the rates determined during former President Yameen’s regime. Shuja has called for the government to provide the flats at the lower rent, and to not shy away from its responsibility.