Azim warns land transport amendments to cost council MVR 10M monthly

Malé City Mayor Adam Azim, on Wednesday, expressed concern, citing Malé City Council is set to lose MVR 10 million in monthly revenue following recent amendments to the Land Transport Act.

The Land Transport Bill, passed by Parliament, where the ruling PNC holds a supermajority, was ratified by President Dr. Mohamed Muizzu last Monday. The legislation includes a dedicated chapter governing the Malé area, with Article 101 providing for the establishment of a ‘Transport Mobility Fund’ to plan and administer land transport affairs in the region upon the law coming into effect.

Under the legislation, which will take effect one month after ratification, all vehicle-related fees collected in the Malé area will be deposited into the fund. These include vehicle registration fees, licensing fees, annual vehicle fees, multiple ownership fees, and fines imposed for violations of relevant laws and regulations.

Previously, vehicle registration fees and annual vehicle fees collected in the Malé area were received by the Malé City Council.

Mayor Azim told Sun that the amendment would reduce the council’s monthly revenue by MVR 10 million. He said the funds are generally used to cover essential services, including the maintenance of mosques and parks.

"The removal of this will pose significant difficulties. Paying water and electricity bills for mosques, and managing other operations, will become unfeasible. This adds further constraints," the Mayor highlighted.

Azim described the government’s decision to reduce the council’s revenue as a highly regressive measure and said it would place the public in a vulnerable position.

Finance Ministry has yet to comment on the matter.

During Wednesday’s official general meeting of the City Council, where the opposition MDP holds a majority, Azim reiterated that the government had significantly reduced the council’s revenue. He alleged that the government had already cut MVR 13 million from the council’s block grant for this month.

Azim noted that the City Council has outstanding payments due to various companies, which are settled using the council’s revenue. He said that, amid continued reductions to the council’s budget by the government, the council would not have sufficient funds even to pay salaries this month.

He further stated that last month’s salaries were paid only because a portion of the council’s block grant had been saved from an earlier period.

Amid the concerns raised by the Mayor, Infrastructure Minister Dr. Abdulla Muththalib, while responding to questions in Parliament on August 3rd, said that the Malé City Council receives annual vehicle fees collected from vehicles operating in the Malé and Hulhumalé areas. He stated that although the City Council receives MVR 150 million annually in vehicle fees, it has failed to undertake adequate work to maintain the roads.

"The responsibility for road construction and similar tasks lies with them [the City Council]. We find that they lack even the basic capacity to properly repair a tarmac road after it has been destroyed during work undertaken with their permission. We have established and sent standards outlining how such cuts and repairs must be executed," Muthalib had said.

During the same remarks, Minister Muthalib called for measures to remove annual vehicle fee revenue from the City Council’s budget and redirect the funds to the government.