Japan talks revived as PM orders swift opening of Third Terminal

Prime Minister Tarique Rahman today (22 February) instructed the authorities concerned to expedite the opening of the long-delayed Third Terminal at Hazrat Shahjalal International Airport in a bid to boost passenger handling capacity and operational efficiency.

The directive came at a meeting held at the Cabinet Conference Room of the Secretariat, with the prime minister in the chair, according to Civil Aviation and Tourism Minister Afroza Khanam.

The Tk21,000-crore terminal at the Dhaka airport – constructed with financial assistance from Japan International Cooperation Agency (Jica) – has remained idle for more than a year after completion of construction works, despite being soft-launched in October 2023.

Highlights: TBS

Now with the directive from the PM, negotiations with the Japanese side, which collapsed in November 2025 over disagreements on revenue sharing, will have to be revived. 

Following today's meeting, Chowdhury Ashik Mahmud Bin Harun, executive chairman of the Public-Private Partnership Authority and also head of the Bangladesh Investment Development Authority, said fresh discussions will be held with the Japanese side.

"We briefed the prime minister today (Sunday). He has given some directives, and based on those, we will take our next course of action. We will sit again with the Japanese ambassador tomorrow (Monday) and see how matters progress," he said.

Afroza Khanam later told TBS that the government has made a policy decision to open the terminal as soon as possible while maintaining international standards.

"There is no reason to leave such a large infrastructure project, built with state financing, unused. The government wants to make it operational, and the authorities concerned have been instructed to take necessary steps," she said.

The terminal was originally scheduled to be fully operational by December 2024. However, delays in equipment imports, leadership changes and political transition pushed the deadline to December 2025. The Civil Aviation Authority of Bangladesh (Caab) has since indicated that it cannot commit to a firm timeline.

Under its proposal, Biman Bangladesh Airlines would handle ground services for two years under Japanese consortium supervision, while Caab would retain responsibility for data security.

The Japanese consortium includes Japan Airport Terminal Company, Sumitomo Corporation, Nippon Koei and Narita International Airport Corporation.

Ashik later told this newspaper that the prime minister had directed that the terminal be opened as quickly as possible, though an operator has yet to be appointed and certain challenges remain.

"Negotiations with the Japanese operator are ongoing. At the same time, operators from several other countries have expressed interest. The government will analyse all proposals before making a decision," he added, declining to comment on whether a fresh tender would be floated, describing the matter as a government-to-government issue.

Built with Tk15,000 crore in loans from Jica and the remainder from the Bangladesh government, the Third Terminal has been designed to handle 24 million passengers annually, significantly enhancing the capacity of Dhaka's main airport.

Finance and Planning Minister Amir Khosru Mahmud Chowdhury, State Minister for Civil Aviation and Tourism M Rashiduzzaman Millat, and Caab Chairman Air Vice Marshal Md Mostafa Mahmud Siddique were among those present at the meeting.

Earlier at the Secretariat, the civil aviation minister told reporters that no specific date for the inauguration could be announced at this stage.

"There will be further discussions and technical assessments to determine how the process can be expedited. Work is underway, but we cannot give a definite date right now," Afroza said.

Responding to questions about why the terminal had not been opened despite more than 99% of the work being completed, the minister attributed the delay to the tenure of the interim government, adding that the present administration is taking steps to resolve outstanding issues.

How Japan talks collapsed

The Japanese consortium was chosen by the Awami League government. After the change in the regime in August 2024, there was no consensus reached between the Muhammad Yunus-led interim government and the Japanese side.

After multiple rounds of talks failed to resolve key differences, the latest two-day negotiation on 24-25 November 2025 ended without progress, as disputes over revenue sharing and the income-expenditure model remain unresolved.

Consortium representatives had alleged that Caab was reluctant to share revenue from major income streams and was instead insisting on an "India-style income-expenditure model" that the consortium considers incompatible with its international-standard proposal.

Speaking at a press conference at the Secretariat on 5 January, the then civil aviation and tourism adviser, Sk Bashir Uddin, said, "We have made every possible effort. I personally met with the Japanese vice minister, held negotiations, and tried to push it forward, but our efforts were ultimately unsuccessful."

He added, "At present, we are focused on completing the necessary procedural requirements for its further development. The decision on its opening will rest with the next government."

Expert warns of mounting losses

Aviation expert Wing Commander (retd) Nazrul Islam said the delay in launching the Third Terminal is causing significant direct and indirect financial losses.

He noted that although the exact revenue loss could not be quantified, the terminal would have generated substantial income through landing fees, passenger service charges and other aviation-related earnings.

Several international airlines that had expressed interest in operating flights to Dhaka were unable to begin services due to the lack of available slots and facilities, the aviation expert said, resulting in missed revenue opportunities.

From a passenger perspective, capacity constraints are also causing inconvenience and service limitations, amounting to losses in time, comfort and service quality, Nazrul said.

He further pointed to the financial projections tied to the project, warning that delayed operations would hinder anticipated revenue flows intended to support broader aviation and national development goals.

The aviation expert also highlighted ongoing maintenance costs for advanced equipment already installed at the terminal. Regular maintenance is required despite the facility not being operational, and in some cases, warranty periods may expire before full-scale use begins.

"If warranties lapse, the maintenance burden will increase significantly, and some equipment may lose part of its operational lifespan without being fully utilised," he warned.