Japan may suspend loan for Matarbari project over corruption allegation
Allegations of corruption in the road construction linked to the Matarbari coal-fired power plant have raised concerns that Japan may suspend its loan for the project. The Japan International Cooperation Agency (JICA) has sent a letter to the Economic Relations Division (ERD) of the Bangladesh government, requesting information about the allegations.
In its letter, JICA asked the ERD to respond to seven specific questions by 4 June. The letter warned that failure to provide answers on time could result in the suspension of the loan.
According to officials familiar with the matter, the Anti-Corruption Commission (ACC) has already filed a case against a former project director over corruption in the road construction project. There is a possibility that JICA may suspend the loan once the government officially informs JICA about the case.
The government of Bangladesh is constructing a deep-sea port and a 1,200-megawatt coal-based power plant in Matarbari, Cox’s Bazar, with financial assistance from Japan. The project began in 2013 with an estimated cost of around Tk 570 billion (57,000 crore), of which JICA is financing about Tk 480 billion (48,000 crore)—Japan’s largest loan assistance to Bangladesh to date.
In 2015, a project was initiated under the Roads and Highways Department (RHD) to construct a 43-kilometer road for the power plant. The cost was Tk 10.2 billion (1,025 crore), including Tk 7.9 billion (791 crore) in loans from JICA. The road construction has been completed.
The corruption allegations are centered on Jahangir Alam, a former project director appointed during the Awami League government. He served in the role from 2022 to 2024. On 13 May, the ACC filed a case against him, accusing him of amassing Tk 290 million (29 crore) in illegal wealth. On the day of the filing, ACC Director General Md Akhtar Hossain told the media that Jahangir Alam made suspicious transactions totaling Tk 1.27 billion (127.35 crore) across 94 bank accounts, in addition to possessing assets beyond his known income.
JICA included a copy of a report published in an English daily with their letter to the ERD. The letter was addressed to ERD Secretary Shahriar Kader Siddiqui and sent by JICA's Chief Representative in Bangladesh, Ichiguchi Tomohide. In the letter, Tomohide wrote that JICA has the legal right to know what exactly happened in the project. JICA asked for answers to the following seven questions: 1: Has the ACC actually filed a case against Jahangir Alam? 2: What were the start and end dates of Jahangir Alam’s tenure as Project Director for the road project? 3: Are any of his illegally acquired assets related to the project? 4: Are any of the money laundering allegations tied to transactions from the project? 5: Since the ACC has filed a case—does this mean the investigation is complete, trial has begun, or is the investigation still ongoing? 6: If Jahangir Alam fails to prove his innocence under Section 27(2) of the ACC Act, will the court presume his assets were acquired illegally? 7: Will the money laundering charges be tried by a special judge?
Sources at the Anti-Corruption Commission (ACC) say that it files cases only when preliminary investigations confirm the authenticity of allegations. Once a case is filed, they conduct a full investigation and then submit a charge sheet.
The ERD is currently preparing a response to JICA’s letter. Md Abu Said, Additional Secretary of ERD (Japan desk), told Prothom Alo, “We hope to respond within the deadline given by JICA.” In response to a question, he added, “After we respond, it’s entirely up to them (JICA) whether they will continue funding the project or cancel it.”
Efforts to contact Jahangir Alam, the Additional Chief Engineer of the RHD, have been unsuccessful. Following the corruption allegations, he was reassigned to the Chief Engineer’s office in a “reserve posting”, a position that effectively has no duties. Earlier, on 24 October, the court imposed a travel ban on Jahangir Alam and his wife, Nusrat Jahan.
The Matarbari power plant project is not yet complete. However, the first unit began commercial production on 18 December, 2023, and the second unit on 28 August, 2024. The full project is expected to be completed by December 2026.
Former ERD Secretary Kazi Shofiqul Azam told Prothom Alo that when corruption occurs in a project, it’s important to assess whether the government is taking action. If the government fails to act, then foreign donors may suspend loans. However, since the government itself has filed a case in this instance, he believes the chance of loan cancellation is lower.
However, Japan is under pressure to cancel the loan for the Matarbari project. JICA’s Chief Representative Ichiguchi Tomohide have handed over a joint statement of three Japanese NGOs—Japan Center for a Sustainable Environment and Society (JACSES), Friends of the Earth, and Mekong Watch— to the ERD Secretary.
The statement notes that, given the ACC has filed a case over corruption in this project, the environmental NGOs are urging the Japanese government to immediately suspend disbursements and take appropriate action. They argue that the suspension should remain in effect until a final verdict is delivered by a Bangladeshi court. Furthermore, they call for effective safeguards to prevent such incidents in the future.
The statement also refers to JICA’s guidelines on environmental and social considerations, which allow for loan disbursement suspension or early repayment demands if legal violations or irregularities occur in a project. Allegations have emerged that these guidelines were breached. For instance, many local residents who previously made a living from salt and shrimp farming have become unemployed. Delays in compensation and resettlement have caused significant suffering for affected communities.
The statement concludes that it is unacceptable for some officials involved in project implementation to profit through corruption while many locals endure hardship.