Tue, 26 Nov 2024

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DHIVEHI

Transport Minister calls for revision of RTL model to ensure sustainability

31 Oct 2024

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MM News Team

RTL Ferry -- Photo: MTCC

The Minister of Transport and Civil Aviation, Mohamed Ameen, has urged the Economic Council to reconsider the Raajje Transport Link (RTL) ferry service model to ensure its long-term sustainability.

Addressing the Economic Affairs Committee of Parliament, Minister Ameen emphasised the importance of the RTL service for the public but noted that the current system is not viable due to its heavy dependence on state subsidies. Since its inception, the RTL has incurred substantial costs, with expenditures of USD 3.1 million in its first year and USD 8.5 million last year, projected to exceed USD 18.2 million this year. The Minister pointed out that the existing model only recovers 20% of its costs, with the remaining 80% covered by subsidies, which could surpass USD 1 million annually if the situation remains unchanged.

The government intends to stick to the RTL rollout schedule, aiming for project completion by 2027. To enhance sustainability, they propose reducing the subsidy rate to 55% while increasing the recovery rate to 45%, in line with recommendations from USAID.

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