More than 50% Japan-funded projects lagging behind
Implementation of 15 of the 29 Japan International Cooperation Agency (Jica)-funded projects are lagging far behind their targets due to issues including delay in land acquisition, procurement of equipment and selection of consultants, according to a Jica report.
Jica's Bangladesh office placed the progress report at a high-level portfolio review meeting, attended by officials of the Economic Relations Division (ERD), Jica and project directors, on Sunday.
The Urban Development and City Governance Project, for which Jica allocated 102 crore yen (over Tk 82cr) for the Japanese FY22 (April 2022-March 2023), has made zero progress so far in nine months due to delay in approval of the development project proposal and opening of account at the Bangladesh Bank.
Similarly, there was no progress in the Health Services Strengthening Project and Food Value Chain Improvement Project.
ERD Secretary Sharifa Khan and Jica Chief Representative to Bangladesh Ichiguchi Tomohide led their respective sides at the meeting.
The major reasons identified by Jica for the slow progress include delay in land acquisition, approval process and preparation of bidding and rebidding documents. Slow procurement and civil works also push some projects behind schedule.
Jica also pointed out the issue of increased construction materials prices at the meeting.
Material prices have seen an unprecedented surge due to post-Covid global economic recovery and the Russia-Ukraine War, they said.
"Concerns have been raised by contractors that the widely used indices, the BBS statistics, do not reflect actual market prices and largely deviate from other related indices after Covid," said Jica.
Earlier in March last year, Jica wrote to the ERD, asking it to increase the contract prices of the development projects funded by it.
Progress below 50% at the 15 projects
Jica, in its report, has identified 15 projects, progress of which remains below 50%.
The Food Value Chain Improvement Project is another one with zero progress.
People linked with the projects said that loans are given to businessmen from the project of Bangladesh Infrastructure Finance Fund Limited (BIFFL) funded by JICA.
The objective of the project is to improve credit access for agribusiness and food processing industries and to enhance the quality of processed food products as well as the efficiency of the business operation by financing and supporting capacity building of financial institutions and agribusiness industries in Bangladesh.
Jica's disbursement of funds has been on hold due to delays in the hiring of project consultants.
Disbursement rates are within 3-10% of the target in 5 projects, including important infrastructure projects.
Till December only 3% of funds were released for the Dhaka Underground Substation Construction project.
The objective of the project is to improve electric supply reliability and electric power supply and demand balance by constructing two underground substations in Dhaka, thereby contributing to an improvement of the investment environment of Bangladesh and nationwide economic development.
No bidders responded at the estimated price when tenders were invited for the project. Fund disbursement of the project is also stuck as contracting firms bid higher than the estimated price.
The Jica report mentions that the Dhaka Mass Rapid Transit Development Project (Line-1) funding is on hold due to the delay in the tender process. Only 10.9% has been disbursed in this project.
The Dhaka Mass Rapid Transit Company Ltd (DMTCL), the implementing agency, recently told reporters that the construction of the project will begin on 26 January, after which Jica's disbursements are expected to accelerate.
The MRT-1 is planned to be completed by 2026 by setting up underground stations at Airport, Airport Terminal, Khilkhet, Nodda, Notun Bazar, North Badda, Badda, Aftab Nagar, Rampura, Malibag, Rajarbag and Kamlapur.
Only 5.5% of funds have been disbursed for the Matarbari Port Development Project due to complications in land acquisition and re-tender of vessel procurement.
Another important project of the health sector is the Maternal Neonatal and Child Health (MNCH) and Health System Improvement Project, which has seen only 19.5% fund disbursement due to slow procurement of medical equipment, land problem in hospital construction sites and delay in submission of disbursement request.
Due to delays in implementation of civil works and re-allocation of loan the Haor Flood Management and Livelihood Improvement project's fund disbursement was only 17%.
According to the report, 12 projects are being implemented as per the target. More than 75% of funds have been spent on these projects. Although two of these projects have achieved less than 50% progress, they are still likely to meet the target.
Delay of DPP
The approval process is pending for the Revised Development Project Proposal (RDPP) of two projects and a new project proposal.
Delayed approval of the South Chattogram Regional Development project DPP caused a delay of six months in the project's getting underway.
Jica has promised to pay around TK2,500 crore for the project, which awaits approval from the Executive Committee of the National Economic Council.
The Natural Gas Efficiency Project, which will procure and install an additional 80,000 prepaid gas meters, is delayed because of pending approval of the revised DPP. Jica will provide more than Tk650 crore in the project.
Revised DPP for the Maternal Neonatal and Child Health (MNCH) and Health system improvement project sought a two-year extension year. Approval has been pending at the DGHS for more than three months.
Jica said ministries concerned need to proactively liaise with the Planning Commission to expedite the approval process and ERD should hold a monthly tri-party monitoring with the Planning Commission and Jica.
Two other upcoming Jica-funded projects are the Chattogram-Cox's Bazar Highway Improvement and Dual Gauge Double Line Between Joydebpur and Ishurdi Section project.
Jica said ERD needs to closely monitor the progress of DPP approvals.