Government to Pay $18 Million Compensation to Villa for Kaadehdhoo Airport Takeover

The government has decided to pay businessman and Maamigili MP Gasim Ibrahim’s Villa Group $18 million in compensation, or offer an equivalent tax adjustment, in exchange for regaining control of Kaadehdhoo Airport in Gaafu Dhaalu Atoll.

The decision, announced by the Economic Council on Tuesday, ends years of legal and political disputes over the management of the domestic airport. Villa Air was initially granted a 50-year lease for Kaadehdhoo Airport in 2013, but the agreement was terminated by former President Abdulla Yameen’s administration in 2017. Following a series of legal battles, the Civil Court, High Court, and Supreme Court all ruled in favor of Villa, leading to the airport’s handover back to the company in March 2018.

Despite the court victory, Kaadehdhoo Airport has since fallen into disrepair, drawing public complaints over poor services and deteriorating facilities. Parliament has also raised concerns, with the government openly expressing interest in retaking the airport to redevelop it into a modern facility.

Negotiations with Villa began after Gasim publicly stated he was willing to vacate the airport if the state wanted to take it over. Villa had initially proposed $21 million in compensation, but the Economic Council finalized the amount at $18 million. According to official communication, the sum will either be paid directly over 18 months or offset against taxes owed by Villa companies within the same period.

It remains unclear whether Villa has formally accepted the arrangement. However, Gasim confirmed in a post on X that the government’s decision was based on the company’s investment in the airport and the financial losses incurred. He said Villa was relinquishing the airport “knowing the huge benefits of turning it into an international airport.”

The development has also sparked political criticism. Speaking at a rally of the People’s National Front (PNF) on Monday night, former President Yameen accused the government of corruption, claiming the state had effectively waived $30 million in taxes owed by Villa. “What a shame this is. The government took over the airport and forgave $30 million of the tax money that should have entered the state. Then there is corruption in this. Someone will launder money in this,” Yameen said.

Gasim has since dismissed Yameen’s remarks, accusing the former president of deliberately distorting the situation surrounding Kaadehdhoo.

With the government regaining control, Kaadehdhoo Airport is expected to undergo major redevelopment, with plans to upgrade it into an international-standard gateway for the southern region.