Most Japan-funded projects and investment plans in Bangladesh have lost momentum since the interim government took office, as officials admit there is little room to move things forward before a new administration is in place.
With national elections approaching, Japanese investors and development partners appear to be taking a cautious ‘wait-and-see’ approach, holding back on fresh commitments until the political landscape becomes clearer.
People involved in several key projects say progress has ground to a halt, from two mass rapid transit (MRT) lines to the operation of Hazrat Shahjalal International Airport’s new third terminal, mainly because of funding uncertainties and unresolved negotiations, even though both governments continue to talk about expanding trade and economic cooperation.
Although Bangladesh and Japan have continued negotiations on the Economic Partnership Agreement (EPA) and held several Joint Platform meetings over the past year, some key issues remain unresolved, preventing the final signing of the EPA.
The Japanese side has also yet to respond positively to new project proposals presented by Bangladesh during the most recent Joint Platform meeting, held in Japan in March.
At that meeting, Bangladesh proposed four major projects-two subways and two bridges.
A member of the Japan-Bangladesh Chamber of Commerce and Industry (JBCCI) delegation, which recently visited Osaka, said Japanese investors remain interested but cautious.
“They have shown interest in Bangladesh, but it seems they prefer to wait rather than act now,” he told The Financial Express on condition of anonymity.
An official involved in the MRT projects noted that any major decision, such as cancellation or restructuring, was unlikely before the election due to time constraints.
However, he criticised the prolonged inaction, saying that while authorities are trying to save Tk 10-20 billion, the economic cost of Dhaka’s traffic congestion already exceeds Tk 400 billion a year.
A high-level delegation led by the Finance Adviser visited Japan in early September, where concerns were raised with the Japan International Cooperation Agency (JICA) over unusually high cost estimates for the MRT projects. The delegation also called for project rescheduling.
The MRT Line-1 and MRT Line-5 (North) projects have remained suspended after the completion of bids for nearly all contract packages, allegedly due to syndication among a few Japanese firms quoting excessively high prices.
However, Dhaka Mass Transit Company Limited (DMTCL) Managing Director Faruque Ahmed said that all issues concerning the MRT projects are currently under review at the highest levels of government.
The Civil Aviation Authority of Bangladesh (CAAB) completed the third terminal development project last year but has yet to finalise negotiations with a Japanese consortium for its operation and maintenance under a public-private partnership (PPP) arrangement. CAAB officials said the talks may be delayed further due to Japan’s cautious stance.
Among all JICA-funded projects, only the Matarbari Deep Sea Port is reportedly making satisfactory progress.
Japan External Trade Organisation (JETRO) Country Representative Kazuaki Kataoka said Japanese companies operating in Bangladesh remain hopeful for an early conclusion of the EPA and a strengthening of bilateral business relations.
“The Japanese government wishes to conclude the EPA with the Bangladesh government as soon as possible. The Bangladesh government should share this view,” Mr Kataoka told The Financial Express.
smunima@yahoo.com
AloJapan.com