The joint venture contractor Aviation Dhaka Consortium (ADC) pocketed Tk5,037 crore in illegal excess payments from the Hazrat Shahjalal International Airport Third Terminal project with the support of the lender, Japan International Cooperation Agency (Jica).
ADC comprises Japan’s Mitsubishi Corporation and Fujita Corporation, along with South Korea’s Samsung C&T Corporation.
The contractor secured the excess payments through substandard materials, incomplete work, duplicate billing, unauthorised expenditures and by bypassing mandatory testing.
A TIMES of Bangladesh investigation earlier found corruption and financial irregularities worth Tk8,441 crore in the project, including the excess payments made to ADC. The investigation found that Jica, aided by Bangladeshi officials and international consultant NOCD Joint Venture, created the conditions that enabled the plundering. Since the lender, consultant and contractor all came from Japan, siphoning funds from the project became easier.
NOCD-JV consists of Japan’s Nippon Koei and OC Global, Singapore’s CPG Consultants Pte and Bangladesh’s DDC Ltd.
The investigation analysed nearly 7,000 pages of contracts, bills, audit reports, correspondence, loan papers and project documents, along with interviews of people involved in the project.
Analysis of two claim notices issued by the Civil Aviation Authority of Bangladesh (Caab) shows the contractor owes Bangladesh Tk6,480 crore. Of that amount, Tk5,037 crore was obtained through irregularities, while Caab has separately claimed Tk1,443 crore in delay damages and other outstanding payments.
Documents show Jica directly influenced the selection of both the consultant and contractor, as well as the project’s technical specifications. It prepared the shortlist of international consultants from which Bangladesh selected NOCD JV. The technical requirements were also framed in a way that ensured a Japanese contractor would secure the contract.
When ADC continued submitting inflated claims, Jica even proposed extending additional loans to Bangladesh to cover them. In effect, Japan would provide the loans, Japanese companies would receive the money, and Bangladesh’s citizens would bear the repayment burden.
For the Tk21,365 crore project, Jica provided Tk16,012 crore in loans in three phases – almost equal to the contractor’s total bills. Most of the remaining expenditure went towards consultancy fees, VAT, taxes and customs duties.
Transparency International Bangladesh Executive Director Iftekharuzzaman described the arrangement as a clear “conflict of interest.”
Calling it a case of “mega corruption,” he told TIMES, “Jica cannot escape responsibility for this corruption. All foreign institutions involved in the project, including Jica, must be held accountable and the misappropriated money recovered.”
Muhammad Mafidur Rahman, Caab chairman during the project’s implementation, said the Japanese loan conditions required specific technologies and companies to be included, although Bangladesh lacked the capacity to determine whether they were suitable or negotiate effectively.
“Initially, the consultant defended those technologies, but later admitted some were unsuitable for Bangladesh,” he claimed, alleging that Jica later pressured Bangladesh to award the terminal’s operation to a Japanese company.
Government agencies, private firms and individuals involved in the project, including Caab, facilitated the irregularities and corruption in the project. As the Caab chairman during implementation, Mafidur Rahman cannot evade responsibility.
How money siphoned
Documents show the largest excess payments were made through variation orders and price engineering. By bypassing mandatory approvals, Caab paid ADC Tk3,012 crore with support from the Ministry of Civil Aviation and Tourism and the Ministry of Finance.
By changing product brands and countries of origin, ADC received an additional Tk1,054 crore while supplying cheaper, lower-quality materials but billing at contract prices.
The contractor also claimed Tk229 crore in excess for earthworks. Caab documents reveal duplicate payments were made for the same road under separate budget heads.
ADC billed for incomplete work and received Tk432 crore without conducting the mandatory Operational Readiness and Airport Transfer (ORAT) trial. Despite this, the government is preparing to allocate additional funds for the same purpose. The contractor also received substantial payments without mandatory testing and certification.
Documents show mild steel, ductile iron and other cheaper substitutes were used instead of stainless steel. Caab also detected rust and corrosion in nuts, bolts and other components. The contractor failed to make the airport’s emergency radio communication system operational.
Compromise with contractor
Despite the large-scale irregularities, Bangladesh government opted for a settlement instead of recovering the money.
An analysis of the Amicable Settlement Committee’s ruling issued on 6 May this year found that nearly Tk5,400 crore of Caab’s claims had already become time-barred under the contract.
Earlier, two state audits had identified irregularities worth Tk6,300 crore, prompting Caab to demand repayment from the contractor.
Mafidur Rahman admitted that failing to raise the claims on time was itself an “irregularity.”
“Caab avoided disputes with the contractor to ensure the project was completed quickly because the Bangladesh government attaches great importance to its friendly relations with Japan,” he told TIMES.
According to project documents, 98 percent of the physical work had been completed by June 2024. However, because of irregularities, technical complications and the inefficiency of subsequent officials, the remaining 2 percent has still not been completed more than two years later, leaving the terminal unopened.
TIMES contacted Caab Chairman Md Mostafa Mahmood Siddiq three times for comment, but he continued to delay responding, citing official engagements.
In a written response, NOCD-JV said that confidentiality obligations prevented it from answering questions about the project.
Jica and ADC also declined to respond to questions regarding the alleged irregularities.
Findings are drawn from verified project documents obtained and independently researched by reporters, corroborating audit records, and opinions of independent experts and officials interviewed for this investigation.
