Italian construction firm Salini SpA received a major blow to its Africa expansion plans when, late in June, Namibia's high court overturned its $280-million construction contract for the Neckartal Dam.
The court ordered the contract to be rebid after a successful challenge by one losing bidder, CSC Neckartal Dam, a consortium made up of South African, Italian and Lebanese firms.
The rebid will be the project's third attempt at contract award since 2011, says a published report in Africa.
Namibia is constructing the dam on the Fish River, 40 kilometers west of Keetmanshoop, in Namibia.
The court said the country's tender board ignored recommendations from the project's steering committee on the bidding process and selection of a contractor.
The steering committee, made up of ministry officials and a representative from its South Africa-based project consultant, Knight Piésold, picked a joint venture of France's VINCI and Egypt's Orascom as the preferred bidder for the project. The tender board overruled its recommendation.
That joint venture also had challenged the award, but withdrew its lawsuit and its involvement in the project for undisclosed reasons.
The court said the board also ignored a committee request for details from bidders related to key project staff members, which amounted to “material non-disclosure,” said the judges.
“The opposing views of the expert consultants as to who should be recommended and why, were not disclosed to the tender board, the court said. "The cumulative effect ... is, in our view, devastating to the legality of the decision-making and deprived the tender board from being able to apply its mind properly to the enquiry before it.”
Earlier, the contract had been awarded to Chinese firm China Henan International Cooperation Group, but that procurement was later cancelled and the government ordered a rebid.
Salini, which won the rebid, bid about $290 million. The firm could not be reached for comment.
The first phase of the Neckartal Irrigation Scheme, the dam is located in the country's southern Karas region along the Fish River.
The 80-meter-high, roller-compacted-concrete dam will harness the river to create a reservoir with a capacity of 857 million cu m. The water will be used to irrigate an estimated 5,000 hectares.