Under the Eur 42 million ($50 million) deal, WRHEC will carry out all hydro-mechanical works on the dam project. WRHEC - together with China International Water & Electric Corporation- is also part of the Chinese CCMDconsortium that in June 2003 won the Eur 549 million ($652 million) civil works package. A Chinese consortium comprising Harbin Power Engineering Company and Jilin Electric Power Companylast year won the estimated Eur 340 million ($399 million) contract to build the project's transmission line.

The package for mechanical and electrical (M&E) works in November went to Paris-based Alstom Power. The firm won the Eur 260 million ($309 million) contract after the frontrunner for the package, a consortium comprising Austria's VA Tech Hydroand Germany's Voith Siemens Hydro Power Generation, was unable to produce an export credit agency guarantee for the deal. The package calls for the construction of the 1,500-MW hydroelectric plant, which will house 10 125-MW hydroelectric turbines, and the provision of equipment. Alstom has started design works on the scheme.

Sources close to the project say the CCMD consortium has completed the first stage of the Nile river diversion and has started excavation works for the concrete section of the dam, which covers a 20,000-cubic-metre-a-second spillway and the 1,250-MW powerhouse.

The 520-metre-long Merowe dam will be built near the Nile's fourth cataract, some 120 kilometres north of Khartoum, and is due for completion in 2008.

Four Arab agencies have committed to provide the bulk of funding for the package - the Saudi Development Fund, the Kuwait Fund for Arab Economic Development, the Abu Dhabi Development Fund and the Arab Fund for Economic & Social Development.

The engineering consultant is Germany's Lahmeyer International.