RASHIDUL HASAN

The Civil Aviation Authority of Bangladesh (CAAB) stares into a financial squeeze as it prepares to begin hefty loan repayments next month for the Dhaka airport’s third terminal -- a facility unlikely to generate revenue before early 2027.

Originally scheduled to begin repayments in 2023, CAAB secured a three-year deferral. Now, the bill has arrived.

Against a Japanese loan of approximately Tk 17,000 crore, CAAB must pay Tk 1,200 crore in June and another Tk 1,000 crore in December, according to SM Lablur Rahman, member (administration) at CAAB.

This Tk 2,200 crore first-year repayment will almost entirely consume the authority’s typical annual profit. While the annual instalment will drop to around Tk 1,000 crore after two years and continue until 2056, the immediate financial strain is acute.

Officials warn that CAAB will have to dip into its savings to fund regular operations and development. There are concerns that this could interrupt crucial nationwide airport maintenance, safety upgrades, and the procurement of navigation and fire safety equipment.

CAAB will pay the loan instalments to the finance ministry which will then disburse the money to the Japanese authorities, said Lablur.

The financial bind highlights a broader issue: the mismatch between the pace of incurring foreign debt and the speed at which those projects become productive.

Despite being 99 percent complete, the terminal missed its 2024 operational target. The primary hurdle is an unresolved disagreement over management and revenue sharing between CAAB and a Japanese consortium comprising Japan Airport Terminal Company, Sumitomo Corporation, Nippon Koei, and Narita International Airport Corporation.

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