Plans to fast-track construction of Namibia’s largest dam received a major blow in late January when the state-run Tender Board cancelled a solicitation for the project.

The cancellation came after top government officials failed to agree in early December on whether China’s state-owned China Henan International Cooperation Group, or CHICO, or Italy’s Impregilo SPA Construction should be awarded the contract for the construction of the $298-million roller-compacted-concrete structure.

CHICO and Impregilo had submitted bids for $236 million and $298 million, respectively. At the Jan. 27 Tender Board meeting, chaired by Namibia permanent finance secretary Ericah Shakudah, the new round of bidding was terminated.

Shafudah said the tender will be advertised again, although she could not confirm when the new notice will be issued.

The 850-million-cu-meter dam is critical to Namibia’s efforts to diversify its economy into irrigated agriculture and reduce current reliance on mining, which accounts for 8% of the country’s GDP. The dam on Fish River is about 40 kilometers west of the city of Keetmapshoop and has the capacity to hold enough water to irrigate more than 5,000 hectares.