Lower Project Costs With Softer Loans: Japan Urged

Bangladesh Seeks Softer Loan Terms, Lower Project Costs From Japan

Bangladesh’s interim government has formally requested Japan to review its ongoing and planned projects in various sectors—including metro rail—seeking reduced costs and easier loan terms.

A high-level delegation, led by Finance Adviser Dr. Salehuddin Ahmed, visited Japan last week to reaffirm Bangladesh’s commitment to long-term ties with Tokyo while also inviting greater investment from the Asian economic power, sources said.

During the trip, the delegation raised concerns over cost escalations in Japanese-funded projects, attributing them to closed tendering processes and rigid conditions.

The 10-member team included officials from the Economic Relations Department (ERD), Civil Aviation and Tourism Ministry, Bangladesh Railway, and Dhaka Mass Transit Company Limited. Their visit, held from September 1–4, was organised by the Asian Development Bank (ADB) under the programme Advanced Railway Development and Multimodal Transport and Tourism Integration. The initiative aimed to share Japan’s expertise in integrated transport systems.

The delegation met with senior Japanese officials, including the Finance Minister, deputy ministers for Economy, Trade and Industry, and Land, Infrastructure, Transport and Tourism, as well as the President of the Japan International Cooperation Agency (JICA). Adviser for Rail and Road Transport Dr. Sheikh Moinuddin and ERD Secretary Shahriar Kader Siddiky were also part of the group.

As part of the knowledge-sharing programme, the delegation toured facilities of Japan Railway East and West, along with operators of Kyoto’s high-speed rail. Bilateral discussions with JICA and other agencies, however, also focused on revising loan conditions and restructuring JICA guidelines to allow more open tendering processes.

Dr. Moinuddin later confirmed that Bangladesh sought such revisions while emphasising the government’s desire to strengthen the partnership and secure further development financing. “The delegation expressed the government’s willingness to continue the long-standing relationship between the two countries and showed interest in obtaining funds for national development,” he said.

Japanese officials, sources said, assured Bangladesh that the requests would be reviewed. At the same time, Tokyo urged Dhaka to resolve pending issues over the operation and management of Hazrat Shahjalal International Airport’s third terminal, in which Japanese firms have expressed interest.

Japan, through JICA, is currently financing a wide range of projects in Bangladesh, particularly in transport, shipping, civil aviation, and energy. However, three metro rail projects have been hit by cost overruns, while the third terminal of Dhaka airport remains unopened due to protracted negotiations with a Japanese consortium over operation and maintenance.