Japan’s Obayashi Corporation, has beaten off a bid by rival Japanese firm Taisei Corporation to win a US$139.75M contract to build a 1.6km immersed tube road tunnel under the Saigon river in Ho Chi Minh City, south Vietnam.

Obayashi was originally favoured after it submitted the lowest bid when tenders were returned for the 32.5m wide Thu Thiem road tunnel in May 2003, but the firm was sidelined by the central government in favour of Taisei Corporation, which offered a technically less demanding design even though its tender price was higher at US$141.4M.

There were concerns that Obayashi’s planned technique for building the immersed tunnel segments, which will each weight 36,000 tonnes and be about 120m long, could cause cracks to develop in the sections, threatening their integrity. But the government’s recommendation was overturned in December by Vietnamese prime minister Phan Van Khai who favoured the Obayashi bid.

The wrangle has already led to a 12 month delay in the project after Taisei was chosen at the end of 2003. In a statement the premier said city authorities must work with Obayashi to ensure the cost will not increase while maintaining construction quality and safety.

The selection of Obayashi has still to be confirmed by the Japan Bank for International Cooperation (JBIC), which is funding the project. A formal contract will be signed once the bank gives the green light.

  The tunnel, which has been designed by a group led by Japan’s Pacific Consultant International, is being built as part of Ho Chi Minh’s US$660M, 22km East-West Highway that will link the downtown area with the Thu Thiem peninsula in District 2.