Bangladesh has barred the release of foreign funds to implementing agencies until projects are formally approved and key staff are in post, under a new order from the Economic Relations Division (ERD) issued on 27 July.

The circular sets seven pre-conditions for confirming loans or signing agreements with development partners, aimed at tackling chronic delays and repeated cost and time overruns. ERD officials say ministries have often pushed for loan deals before meeting basic readiness requirements, slowing execution once money is committed.

Under the new regime, agencies must prepare and approve Development Project Proposals (DPP) or Technical Assistance Project Proposals (TAPP) in line with Planning Commission rules, appoint project directors and core staff, and complete land acquisition in advance, including rehabilitation plans for affected people.

Procuring entities will be required to estimate costs for goods, services, and works, draft tender documents, and—where necessary—complete processes up to contract award before any loan is confirmed.

Consent from the Finance Division on subsidiary loan terms, after negotiations with the development partner, is also mandatory. Agencies must additionally secure agreements with utility providers for relocating gas, electricity, and water lines.

A senior ERD official said the conditions, effective from project preparation, are intended to protect value for money and prevent further overruns. The requirements apply to both pipeline projects and those now moving through approval.