Welcome to Business Outlook
Related Articles
Five major development projects funded by the Japan International Cooperation Agency (JICA) have hit a standstill due to bureaucratic complications and indecision, leaving thousands of crores of taka worth of works in limbo.
The Economic Relations Division (ERD), in its latest meeting, expressed serious concern over the stagnation of projects such as the Matarbari power plant, metro rail, and the third terminal of Hazrat Shahjalal International Airport.
From the Kanchpur–Meghna–Gomti bridges to the airport expansion, metro rail lines, Jamuna rail bridge, and Matarbari power plant — all five projects are mired in complexities.
JICA has already cautioned the Bangladesh government that unless the issues of coordination and decision-making are resolved, it will adopt a more cautious approach in approving future projects.
Japan, through JICA, has long been a key partner in Bangladesh’s infrastructure development, funding major projects in roads, bridges, railways, power, and aviation. Once considered models of efficiency, JICA-funded projects are now facing growing inefficiencies, particularly following recent political changes.
Kanchpur–Meghna–Gomti bridges remain unsettled
Although the ‘Construction of Second Kanchpur, Meghna and Gomti Bridges and Rehabilitation of Existing Bridges’ project officially concluded nearly a year ago, financial settlement is still pending. The Japanese contractor has claimed an additional Tk8 crore, which awaits resolution. Although the Dispute Resolution Board has acknowledged the claim, the exact amount to be paid remains undecided. The project’s financial analysis has now been handed over to the Matarbari Port consultancy firm — a move experts see as a reflection of poor administrative coordination.
Hazrat Shahjalal International Airport expansion delayed
The airport expansion project has become tangled in disputes, cost claims, and approval delays. The foreign contractor has submitted more than 600 variation proposals, over half of which remain unapproved. Claims and counterclaims between the Civil Aviation Authority of Bangladesh (CAAB) and the contractor have inflated project costs to several thousand crores — with CAAB demanding Tk3,000 crore and the contractor claiming over Tk1,000 crore.
Although a dispute resolution board has been formed, it has yet to make a decision. JICA has expressed frustration over delays in government approval and submission of revised project documents, which have disrupted the work schedule and increased costs. While parts of the new terminal are ready, the full completion may take another year and a half.
Jamuna rail bridge progress hampered by disputes
The much-anticipated Jamuna River rail bridge — expected to revolutionise rail connectivity — has also run into disputes and approval delays. Despite completion of most works, disagreements over two packages remain unresolved. Some contractor claims await cabinet approval, but revised proposals have yet to reach the Planning Commission.
JICA has warned that repeated deadline extensions and delays could lead to project expiry and suspension of remaining fund disbursement.
Metro Rail Lines 1 and 5 at a standstill
The JICA-funded Metro Rail Lines 1 and 5, launched to ease Dhaka’s traffic congestion, have slowed down significantly. A major tender under Line 1 awaits JICA’s approval, while utility relocation delays have stalled work in Uttara Badda and Aftabnagar.
For Line 5, the bidder’s proposed cost has far exceeded the estimated budget, forcing the need for a revised project plan. JICA has identified weak communication between project directors and JICA offices, delays in decision-making, and lack of accountability as the main obstacles.
A senior Planning Commission official said JICA loans do not allow open tenders — only Japanese firms can participate. As a result, bids are often far higher than estimated. “If other countries were allowed to compete, we could get better rates,” he said.
An ERD official, requesting anonymity, added that the government is negotiating with JICA to cut costs. “The metro rail is becoming too expensive for us. It’s difficult to take on so much debt,” he noted.
Road Transport and Bridges Adviser Muhammad Fauzul Kabir Khan also said the government has informed JICA that such high construction costs are unacceptable and a review is underway.
Matarbari power plant facing technical failure
Among all JICA-funded projects, the Tk35,000 crore Matarbari coal-based power plant is now facing a severe technical crisis. Since early this year, boiler malfunctions and ash accumulation have drastically reduced production. The contractor blames design flaws, while consultants deny the claim.
Besides, the contractor has sought an extra Tk4,500 crore. The project director’s report revealed that both units of the power plant are running below 50% capacity — less than half the contractual benchmark — causing losses worth around $10 million. JICA has termed the situation “deeply concerning.”
Root causes: administrative inefficiency and indecision
Despite project-specific issues, three recurring problems lie at the core — contractual ambiguities, approval delays, and poor coordination. JICA believes Bangladeshi agencies are failing to make timely decisions, driving up costs and eroding investor confidence.
Government officials, however, argue that JICA’s own bureaucratic procedures are slow, as each major decision requires approval from Tokyo. ERD and project insiders admit that complex foreign conditions and lengthy approval processes hinder prompt action — causing cost overruns, delays, and unmet public expectations.
