South Korea’s Daewoo Engineering & Construction said yesterday that it had won a $161m contract to build the first-ever bridge over the Zambezi River connecting Zambia and Botswana.
Daewoo said the project would bring economic advantages to both countries and that the idea had been "cherished" by them for 40 years.
But the contract has been hit with controversy after a major funder, Japan International Cooperation Agency (JICA), withdrew its loan for the project over a reported tender valuation dispute.
And another of the bidders, China Major Engineering, has written to the local authorities asking why its bid, said to be the lowest, was rejected.
The two countries agreed to build the Kazungula Bridge in 2007, according to local media. Currently only a ferry at the border town of Kazungula, Zambia can cross the 400m stretch of river.
In October 2012, JICA announced that it would lend Botswana $84.2m and Zambia $27.7m to build the bridge. JICA said it would help the two landlocked countries remove transport bottlenecks and develop their economies.
JICA was joined by the African Development Bank (AfDB) in promising funds, and both the governments of Zambia and Botswana would contribute.â€¨But earlier this month JICA surprised all parties by withdrawing from the scheme.
According to the Zambia Daily Mail newspaper, a dispute arose over the technical evaluation of bids from three shortlisted firms before a tender could be awarded.
Those firms were Daewoo, a joint venture between Japan’s Shimizu and South Africa’s Stefanutti, and China Major Bridge Engineering Corporation.
"They [JICA] have pulled out and we shall try to engage the African Development Bank (AfDB) to put in more resources," Zambia’s transport minister, Yamfwa Mukanga, told the newspaper, adding: "then we shall set the new date for ground-breaking which was supposed to have taken place last month."
The newspaper reported that China Major Engineering chairman, Liu Ziming, has written to Zambia’s Road Development Agency questioning the decision to award Daewoo the tender when his company offered the lowest price.
The two countries appear to have decided to proceed without JICA, and Daewoo has been selected on the basis of a $161m contract, not $260m, which was the original reported cost.
Groundbreaking starts next month and construction is scheduled to be finished in four years, Daewoo said.
Daewoo said it was its first project in the region in 23 years, and that it hoped it would be a stepping stone for expansion in South Africa and neighbouring countries.
Daewoo recently won six other major contracts amounting to $3.39bn, including Kuwait’s Clean Fuels project, the new Orbital Highway Project in Qatar, and the Singapore’s Thomson-East Coast Line Project.