Why Jica metro projects cost so high
Tender documents and cost estimates are often prepared by Japanese consultants using technical standards that few non-Japanese firms can meet
Bangladesh's projects funded by Japan International Cooperation Agency (Jica), including the Dhaka Metro, are among the most expensive in Asia.
Several factors contribute to the reasons behind the inflated expenses of these projects.
Limited competition in bidding: Though Jica mandates international bidding, most contracts go to Japanese firms. This lack of competition keeps costs high.
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Japan-favouring tender designs: Tender documents and cost estimates are often prepared by Japanese consultants using technical standards that few non-Japanese firms can meet.
Restricted market access: Certain clauses in loan agreements favour Japanese companies, limiting participation by local or other international bidders, according to Dhaka Mass Transit Company Limited (DMTCL) sources.
Donor as both consultant and contractor: Experts say Jica often plays multiple roles—financier, consultant, and project supervisor—creating conflicts of interest that push prices up.
Weak local oversight: Insufficient institutional scrutiny allows inflated estimates and procurement inefficiencies to go unchecked.
Overdependence on foreign expertise: With limited local engineering input, projects rely heavily on Japanese designs, materials, and contractors, raising foreign exchange costs.
Fragmented procurement system: DMTCL's current tendering system varies across projects, causing cost inconsistencies. A unified standard is now being developed to control spending.
Limited learning from regional models: Countries like India achieve lower costs by using local contractors, shared infrastructure, and simpler designs — lessons Bangladesh is only now adopting.
