Government has decided in principle to move ahead with two Japan-financed metro rail projects after months of negotiations over their rising construction costs and authorities nearing towards finalising an agreement to hand over the operation of Third Terminal of Hazrat Shahjalal International Airport-Dhaka to a Japanese consortium, official sources said.
According to the sources, though the policy approval has been granted for both initiatives, effective discussions of reducing project costs are continuing. The government has already formed a seven-member technical committee to review the revised cost estimates and determine whether the proposed expenditures are justified.
This development in the decision-making marks a renewed phase of Bangladesh-Japan cooperation following months of uncertainty over several major infrastructure projects. Yet Japan remains Bangladesh's largest bilateral development partner, supporting key investments in transport, energy and aviation sectors.
Bangladesh official sources said the Airport�"Kamalapur�"Notun Bazar�"Purbachal MRT Line-1 and the Hemayetpur�"Bhatara MRT Line-5 will be implemented with the Japanese financial assistance, and negotiations are also nearing completion on awarding the ground handling and operational management of the Third Terminal to the Japanese conglomerate.
Reliable sources at the Ministry of Road Transport and Bridges said the implementation slowed after Japanese contractors submitted bids that were significantly higher than the government's original estimates. And several rounds of discussions between Bangladesh officials, the Japan International Cooperation Agency (JICA) and other stakeholders eventually led both sides to continue fruitful talks rather than suspending the projects.
In the meantime, State Minister for Road Transport and Bridges Habibur Rashid said the government is committed to implementing both the metro projects with the Japanese financing while ensuring the public funds are efficiently used. Discussions with JICA are continuing to reach a mutually acceptable financial framework, he added.
According to the project documents, MRT Line-1 was initially estimated at Tk 52,561 crore, while MRT Line-5 cost was set at Tk 41,238 crore. Following detailed engineering surveys and revised designs, JICA proposed increasing the estimates to nearly Tk 96,500 crore and Tk 88,000 crore respectively, prompting concern within the government.
Yet JICA sources maintains that the higher costs reflect the complexity of the projects. Unlike the existing MRT Line-6, large sections of the new lines will run underground, requiring deeper stations and more sophisticated engineering, the sources said, adding, rising prices of construction materials, labour costs and exchange-rate fluctuations have also contributed to the revised estimates.
Professor M. Shamimuzzaman Bosunia, who heads the government's technical review committee, said the panel will examine every major component of the revised costing before making recommendations. But, a technical expert, speaking on condition of anonymity, said there is a limited scope to significantly reduce the bid estimates, submitted by internationally qualified contractors without changing project specifications.
Meanwhile, negotiations over the operation of the Third Terminal are approaching completion. Under the proposed agreement, the Japanese consortium will receive 73 per cent of operational revenue, while Bangladesh will receive the remaining 27pc. Officials believe Japanese expertise in airport management will improve operational efficiency and service quality.
The country has also requested Japan to maintain more favourable lending terms after Tokyo recently increased interest rates on development loans, with Finance Minister Amir Khasru Mahmud Chowdhury writing to his Japanese counterpart seeking more flexible financing conditions.
