Dhaka airport 3rd terminal costs rise Tk 902cr despite 99.91% completion

Hazrat Shahjalal International Airport’s (HSIA) third terminal has reached 99.91% completion, yet the government is proposing another year to finish the project and an additional Tk902 crore in costs.

The latest proposal would raise the project cost to Tk22,267.67 crore from the original Tk13,610 crore, while extending its duration to June 2027. This means a project initially scheduled for six years will have taken 11 years to complete.

The first phase of the HSIA Extension Project was approved in 2017 to modernise Bangladesh’s aviation sector and bring it up to international standards. The third terminal was built under the project, which was originally scheduled for completion by June 2022.

The deadline was first extended by three years to June 2025. A second revision extended it again to June 2026, but the project still remains incomplete. The Civil Aviation Authority of Bangladesh (CAAB) has now proposed a third extension until June 2027.

According to project documents, overall physical progress stood at 99.91% as of June 2026, leaving less than 1% of the work unfinished. Despite this, CAAB has submitted a third amendment proposal to the Planning Commission seeking additional expenditure of Tk8,657.19 crore across various components.

Terminal completed, opening still delayed

The prolonged delay extends beyond construction. Although the terminal building has been completed, the facility has yet to begin full operations.

Former prime minister Sheikh Hasina conducted a soft opening of the terminal on 7 October 2023, with authorities saying operations would begin in phases. Nearly three years later, however, the terminal is still not fully operational.

Civil Aviation and Tourism Minister M Rashiduzzaman Millat has said the government plans another soft opening on 16 December 2026. He also said the government is moving to sign an agreement with a Japanese company to operate the terminal.

Meanwhile, delays in appointing an operator are adding to government expenditure. Under the proposed third revision, Tk667.48 crore has been earmarked for maintenance until an operator is appointed. No such maintenance allocation was included in the original development project proposal.

Japanese company Sojitz recently submitted technical and financial proposals to operate and maintain the terminal. Company representatives handed over the proposals at CAAB headquarters on 25 August. The proposals are expected to undergo evaluation, followed by negotiations before an agreement is reached.

Costs rise at final stage

Several other components are also seeing higher costs despite the project being almost complete.

The third revision proposes an additional Tk647.52 crore for runway and taxiway-related infrastructure under civil works and Tk372.94 crore for building works.

It also seeks an additional Tk41.67 crore to extend consultancy services by 359 person-months. At a Project Evaluation Committee meeting of the Planning Commission on 20 August, officials instructed the authorities to reduce the proposed expenditures.

Contractor’s claims add to costs

The project has also been burdened by a dispute between CAAB and the contractor, Aviation Dhaka Consortium (ADC), over various claims.

A dispute board was formed to resolve the claims and issued its decision on 16 February. Subsequently, an Amicable/Global Settlement Committee was formed on 7 April to settle the contractor’s outstanding claims.

Based on the committee’s recommendations, authorities have decided to pay ADC an additional Tk1,522.55 crore.

The dispute board had considered Tk1,579.51 crore in outstanding bills along with Tk47 crore in penalties.

Officials involved with the project said ambiguity and repeated changes in the project’s design, scope of work and product specifications had existed from the outset. These issues contributed to the rise in costs at the final stage, they said.

Audit objections remain unresolved

The project’s financial management has also come under scrutiny, with audit objections raised over additional allocations, VAT, customs clearance and transportation costs.

One objection concerns allegations that transportation costs for drying liquid mud were shown twice.

Auditors also questioned additional payments related to VAT payable to the National Board of Revenue (NBR). Another objection concerns Tk68.72 crore spent on clearing goods at the port that was shifted from the contractor to the state.

As of now, 121 audit objections related to the project remain unresolved.

Project documents indicate that the objections are linked to weaknesses in project supervision and inconsistencies in financial management. The Implementation Monitoring and Evaluation Division (IMED) has urged the authorities to resolve the outstanding objections promptly.

Technical concerns

Financial issues are not the only concerns surrounding the terminal. Questions have also been raised over several technical components.

Defects have reportedly been detected in machines used in the Explosive Detection System, a key airport security component. The machines allegedly take around 20 minutes to restart following a power outage.

Problems have also emerged with the backup power system, with officials pointing to the absence of required UPS load calculations and configuration details in the tender documents.

Water and mud have reportedly entered the duct bank built for electronic systems, while allegations have also been raised that some products were supplied without meeting required specifications.

A costly wait for a major facility

The third terminal is considered crucial to Bangladesh’s aviation connectivity and economic ambitions. It was designed to provide modern facilities and international-standard passenger services.

However, with construction virtually complete but operations still delayed, the project has faced repeated extensions, sharply higher costs, unresolved audit objections and disputes over contractor claims.

The proposed third revision would add another year to the project and further increase public expenditure, raising fresh questions about why a project that is already 99.91% complete still requires substantial additional time and money.