Future of megaprojects funded by JICA remains clouded

Six major infrastructure projects involving an investment worth nearly Tk 1.94 trillion--- 76 per cent of which is funded by the Japan International Cooperation Agency (JICA)--- are now encountering problems of varied nature.

Behind the glossy images of progress surrounding these projects lie disputes, design flaws, cost overruns, and missed deadlines.

A recent high-level meeting at the Economic Relations Division (ERD) revealed that unresolved technical, financial, and administrative challenges have piled up involving these schemes.

From the Matarbari power plant's boiler failures to cost disputes at the Dhaka airport expansion and metro rail projects, billions of taka are now at stake.

The meeting, chaired by Dr Mohammad Mizanur Rahman, Additional Secretary of the ERD, recommended a series of urgent measures to resolve pecuniary disputes involving project authorities, contractors, and JICA.

Officials fear that unless these issues are addressed urgently, much-anticipated benefits from the JICA-assisted megaprojects, seen as symbols of Bangladesh's modernization, may remain out of reach for years.

The Matarbari 2×600 MW Ultra Super Critical Coal-Fired Power Project, implemented at a cost of Tk 518.55 billion, has faced major operational problems since its commissioning in January this year, according to the meeting minutes.

Due to severe ash slagging and fouling in the boilers, power generation at both units has dropped by half, causing an estimated loss of $95.8 million, or around Tk 11.69 billion, in capacity payments, the project authorities informed the meeting.

To address the issue, a rectification plan worth Tk 1.35 billion has been proposed, requiring more than 21 months to complete it.

However, the Japanese-led joint-venture contractor has refused to bear the cost, citing the absence of relevant provisions in the contract. The contractor has also submitted a 15.69 per cent price escalation claim amounting to Tk 47 billion.

The meeting advised the Power Division to identify the root causes of the technical faults, with assistance from BUET experts if needed. It also urged JICA and the Power Division to hold an emergency meeting to develop solutions.

A time-bound action plan should be prepared and shared with the ERD, with JICA supporting repair work on both units. Immediate measures were recommended to revise the project by January next year, the minutes noted.

The Hazrat Shahjalal International Airport Expansion Project (Third Phase) is also facing serious challenges, with nearly 600 variation orders - 450 of which have already been approved by consultants.

The Civil Aviation Authority of Bangladesh (CAAB) has claimed Tk 30 billion, while the Japanese joint contractor, Aviation Dhaka Consortium (ADC), submitted evaluation proposals for variation orders worth Tk 10.9 billion.

The meeting noted that payments cannot be made to the contractor until the Dispute Board issues its decisions, placing the utilisation of the current fiscal year's ADP allocation at risk.

JICA representatives expressed concern over further project revisions, which are delaying payments to contractors and consultants for the Tk 213.99 billion scheme launched in July 2016.

The meeting recommended that the project director prepare a time-bound action plan to resolve all claims under ministerial supervision and directed CAAB to provide regular progress updates to the ERD.

Progress on the Jamuna Railway Bridge Project has also slowed due to disputes under several work packages, the meeting revealed, though 81 per cent of financial disputes have been resolved.

Key pending issues still require approval from the Cabinet Committee on Government Purchase (CCGP) and a revised development proposal.

The Ministry of Railway was instructed to complete revisions and seek JICA's support to settle all outstanding matters by December 2025.

The Dhaka Mass Rapid Transit (MRT) Line 1, the country's first underground metro project, is similarly behind schedule due to delays in tender approvals and cost optimisation, officials said.

The Contract Package 03 (CP-03) tender has been awaiting JICA's approval since March, while work on CP-02 and CP-05 remains pending.

DMTCL has been instructed to finalise procurements promptly and prepare a joint action plan with JICA.

Likewise, the Dhaka MRT Line 5 (Northern Route) project is facing coordination gaps and cost complications.

The CP-04 tender has awaited JICA approval since December 2024, while CP-06 requires a revised Development Project Proposal (DPP) after bids exceeded estimates.

The ERD decided to request faster JICA approvals and closer coordination between MRT-1 and MRT-5 teams.

The completed project for constructing the second Kanchpur, Meghna, and Gumti bridges, along with rehabilitation of existing bridges, still has unsettled claims.

Despite completion in June 2022, a Tk 79.3 million dispute over daily works and riverbed clearance remains unresolved, as the Dispute Board has yet to determine the payable amount.

The meeting recommended holding an inter-ministerial session to close the case and prepare a joint action plan with JICA.

Dr Mohammad Mizanur Rahman, Additional Secretary of the ERD, was unavailable for comment as he is currently abroad. Multiple attempts to reach ERD Secretary Md Shahriar Kader Siddiky were also unsuccessful.

ERD officials said unresolved technical, financial, and administrative disputes are delaying progress on JICA-assisted projects and hindering the anticipated economic benefits.

The meeting called for stricter monitoring, regular reporting, and stronger coordination between implementing agencies and JICA to prevent further cost escalation and time overruns.

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