Construction of the $298-million Neckartal Dam in Namibia could be delayed after government officials failed to agree on a contractor selection between two contenders, China’s state-owned China Henan International Cooperation Group, or CHICO, and Italy’s Impregilo SPA.

The 850-million-cu-meter dam will be built on the Fish River about 40 kilometers west of the city of Keetmapshoop. The structure is anticipated to be the largest in Namibia, about three times the size of Hardap Dam, currently the record holder. The completed dam will impound enough water to irrigate more than 5,000 hectares.

CHICO and Impregilo, which had submitted bids for $236 million and $298 million, respectively, for the 67.5-m-high roller-compacted-concrete structure, were among seven contractors short-listed in 2010 for the project, with work initially set to begin in the last quarter of 2011. Other bidders were Neckartal JV, Odebrecht-Tecnonam JV, Hochtief Construction AG, Group 5 Contractors and Grinaker Ltd.

CHICO’s attempt to win the contract comes at a time when China has stepped up its supply of agricultural equipment and technology to Namibia’s Green Scheme, an initiative to enhance the country’s irrigation and horticulture development.

Mining accounts for 8% of Namibia’s gross domestic product and provides 50% of its foreign exchange earnings with China.

CHICO has received the backing of Andries Leevi-Hungamo, permanent secretary of Namibia’s national planning commission. Late last year on a visit to China, he signed several trade exchange agreements.

At a previous board meeting, Agriculture Permanent Secretary Andrew Ndishishi proposed giving the contract award to Impregilo.

However, the contract board has since clarified that the selections voiced by the two agency officials are not official government positions.

Another Chinese constructor, Sinohydro Corp., was disqualified for failing to disclose its association with Knight Piésold Consulting, which did the project’s engineering study. Sinohydro’s appeal to contract review officials is still pending.

Namibia’s ministry of agriculture, water and forestry now is reviewing the dispute issues and will provide further input into the decision-making, says Erica Shafudah, chairwoman of the contracting board and permanent secretary of the finance ministry.

Both CHICO and Impregilo SPA did not respond to e-mail queries regarding the controversy.