Several multi-billion dollar projects initiated mostly with foreign loans in the past decade have yet to be completed despite raising costs and extending deadline on a number of occasions, posing challenges to the new government.
Besides, many foreign-funded infrastructure projects have already been completed, but those have failed to give expected economic benefits, said economists.
Economists fear that the cost overrun and the time extension will continue to create pressure on the external debt servicing and pose challenges to the newly elected government led by the Bangladesh Nationalist Party.
The amount of the government’s external debt rose from $20.3 billion in the 2009-2010 financial year to $68.8 billion in the FY 2023-2024 and reached $80.19 billion by the end of FY2024-2025.
The construction cost of the third terminal at the Shahjalal International Airport was revised upward to Tk 21,399.06 crore in February 2020 from the initial estimate of Tk 13,610.47 crore.
About 75 per cent of the project cost has come from a loan from a bilateral lender.
A consortium comprising Mitsubishi Corporation of Japan, Fujita Corporation of Japan and Samsung C&T Corporation of South Korea began the construction on December 28, 2019.
A soft inauguration was also made by the then prime minister Sheikh Hasina on October 7, 2023, but a full-fledged operation, originally scheduled for 2024, did not commence because of the unresolved issues on ground handling and operational issues.
The newly elected government has taken a fresh move to resolve the pending issues and made the terminal fully operationalised.
But the delay has already cost the nation dearly since the interest payment against the loan has been paid dully and the grace period on principal amount has shortened automatically.
Interest payment against foreign loans incur from the day of disbursement, said World Bank Dhaka office chief economist Zahid Hussain.
The external debt repayment obligations are projected by the Economic Relations Division at about $5 billion in FY2025–26, after the payment stood at $4.086 billion in FY2024–25.
However, the projection is often overlooked payment details of the ongoing development projects, said Bangladesh Institute of Development Studies director general Ak Emamul Haque.
In the past year, the international agencies lowered the country’s credit rating, he said.
The latest Article IV report released by the International Monetary Fund on January 30 said that Bangladesh remained at a moderate risk of external and overall debt distress, with limited space to absorb shocks.
The Matarbari 2×600 Megawatt coal-fired plant built at a cost of Tk 56,693.90 crore, with Tk 47,945.03 crore in foreign loans, starting from 2014 has been facing operational problems since its commissioning in January 2025.
Revised twice — first in 2021 and second in 2023 — the plant’s power generation at both units has halved because of the technical problems called slagging and fouling in the boilers.
Mohammad Tamim, the vice-chancellor of Independent University of Bangladesh, said that the government had been incurring losses because of the less-than-expected performance of the plant.
Incurring the operational losses of about Tk 1,169 crore annually for the capacity payment, the Power Division disseminated the calculation in a review meeting held in November 2025 by the Economic Relations Division on foreign-funded projects.
The potential benefit from the Rooppur Nuclear Power Plant being built with a foreign loan of about $12 billion was also unlikely.
Past month, the project cost was revised upward by Tk 25,593 crore to Tk 1,38,685 crore from Tk 1,13,092 crore and extended the deadline for the overall project to 2028 from the previous 2026.
Half of the plant can be operated in the initial years of commissioning due to lack of necessary power transmission lines, said M Tamim who was also a former energy adviser of the military-backed caretaker administration in 2008-09.
It has already been reported that how the Dhaka-Khulna rail-line project built from a foreign loan of Tk 21,036 crore for the final cost of Tk 38,625 crore following the revision twice from the initial estimate of Tk 34,989 crore has remained underutilised.
The Bangladesh Railway operates only two pairs of passenger trains despite having the capacity for at least 24 pairs daily because of lack of demand.
Besides, the tunnel project underneath the River Karnaphuli, the Dasherkandi water treatment plant in the capital Dhaka and the Padma water treatment plant at Jashaldia in Munshiganj, all built with foreign loans have already turned into white elephants, said officials of the planning ministry.
The much-talked-about Gazipur-Airport Bus Rapid Transit corridor project already cost over Tk 2,800 crore.
But the multilateral lender-driven project is yet to be completed because of flawed design as well as concept.
Dismantling it could cost another Tk 2,000 crore, according to the National Economic Council meeting held in January.
Planning ministry officials said that former planning adviser to the past interim government Wahiduddin Mahmud failed to find a way out and left the fate of the problem-ridden project for the newly elected government.