Matarbari plant’s power generation falls sharply, financial losses mount

Highlights

• Matarbari plant output falls below 55% due to unresolved boiler and system faults.
• Technical disputes with Japanese contractor delay repairs, raising losses.
• Contractor proposes Tk135 crore fix, funding responsibility unclear.
• Other Jica-backed projects face delays, disputes, and maintenance concerns.

The Matarbari Ultra Super Critical Coal-Fired Power Project continues to struggle with serious technical and operational issues that have significantly reduced power generation and triggered mounting financial losses, according to a recent review meeting at the Economic Relations Division (ERD).

Amid ongoing unresolved technical disputes and stalled corrective work, the plant's power availability has plunged to 47% for Unit-1 and 53.6% for Unit-2, prompting officials to describe the situation as causing "huge financial losses".

Officials from the Coal Power Generation Company Bangladesh Limited reported that since early this year the facility has been hampered by severe ash slagging and fouling inside the boilers, sharply reducing its operating capacity. Despite repeated requests to the Engineering, Procurement and Construction contractor, Sumitomo-Toshiba-IHI Consortium (STIC), no effective actions have been taken to restore full boiler functionality.

The review also flagged weaknesses in the plant's auxiliary systems, noting that the cooling-water pumps on both units have not been performing properly since commissioning. On the financial front, the Power Division raised concerns over STIC's proposed 15.69% price adjustment, which the project consultant has already rejected.

The issues were discussed at a high-level ERD review meeting on 11 November, chaired by ERD Secretary Shahriar Kader Siddiky. At the meeting, the contractor said a detailed report on the problems was being prepared, but government officials stressed the need for immediate action to stabilise operations at the plant. 

Disagreements over the cause of the failures have delayed progress. STIC has blamed substandard coal for the boiler damage, while tests conducted by the Matarbari Joint Venture Consultant reportedly found no major coal quality defects. In response, the contractor has submitted a rectification plan costing Tk135 crore and requiring 21.5 months to implement, though responsibility for funding remains unclear under contract rules.

Coal Power Generation Company has urged a comprehensive Root-Cause Analysis and that the matter be treated under the Defect Notification Period. Although STIC agreed in October 2025 to conduct an analysis, no follow-up action has been taken. 

When contacted, Md Nazmul Haque, managing director of Coal Power Generation Company declined to comment on the matter.

According to meeting minutes, it was decided that the contractor, boiler manufacturer, and relevant experts will visit the plant urgently to determine the real cause and corrective measures, with the contractor expected to cover repair costs. A time-bound action plan will be prepared with Jica's assistance to complete repairs for both units within the stipulated timeframe. 

The Matarbari Ultra Super Critical Coal Power Project, with a cost of Tk56,693.90 crore, began implementation in 2014, with Tk47,945 crore being financed through a loan from Jica.

Other Jica-funded projects also facing challenges

The meeting also reviewed progress on other major Jica-funded projects, including the Jamuna Railway Bridge and the Hazrat Shahjalal International Airport third terminal expansion. According to ERD sources, Japanese representatives raised concerns about the lack of a dedicated maintenance plan for the bridge after project completion, putting its long-term safety at risk.

The Jamuna Railway Bridge construction, which began in 2016, was estimated to cost Tk16,781 crore, with Tk12,149 crore being financed through a Jica loan.

Railway Secretary Md Fahimul Islam declined to comment when contacted, advising to speak with the project director, who could not be reached despite multiple attempts.

The Third Terminal project continues to face payment and implementation delays due to disputes between the Civil Aviation Authority of Bangladesh and Japanese joint-venture contractor, Aviation Dhaka Consortium. A Dispute Board established in September 2025 has yet to issue decisions necessary for processing contractor payments. 

The Chief Representative of Jica Bangladesh expressed concern over unpaid consultant bills for the past two years due to delays in Revised Development Project Proposal approval.

The airport project, launched in 2016 with an estimated cost of Tk21,399 crore (including a Tk16,141 crore Jica loan), remains incomplete, and the third terminal has not been opened due to a failure to recruit an operator.