Chinese builders will be responsible for building the N$30 million presidential residence on the estate, while the North Koreans will retain overall control of the construction of the State House complex, authoritative sources have told The Namibian.

The involvement of the Chinese in the massive building contract was confirmed by Ben Kathindi, Under Secretary of Works in the Ministry of Works, Transport and Communication.

He said China's participation was "not a new thing" and that "they have been involved for quite a while".

China and Namibia had a "bilateral agreement" and their involvement was "part of our ongoing" co-operation, he said.

The involvement of the Chinese in the controversial project follows a N$55m donation last year by Beijing towards the cost of building the new State House.

At the time of China's donation, Deputy Foreign Affairs Minister, Dr Kaire Mbuende, who signed the agreement with his Chinese counterpart Qiao Zonghuai, said the money was being given with no strings attached.

The donation was made because China regarded State House "an important national project", Mbuende said.

Although no-one was prepared to say publicly that the donation may have paved the way for Chinese companies being awarded a share of the building contract, sources claimed that this was, in fact, the case.

A senior Government official close to the project said the Chinese government had donated not only money but "labour".

Quizzed about the donation at the time it was given, Mbuende said Chinese companies would have to compete for a share of the contract and would not receive special treatment.

But, as with the awarding of the contract to the North Koreans, the work the Chinese will do was never put out on public tender.

A spokesperson for Murray & Roberts, one of southern Africa's largest building contractors - which has offices in Namibia - said yesterday they were unaware of any advertisement of public tenders for the construction of State House.

"We were never invited and never had any involvement in any way," said Financial Director Jannie Louw, adding that "we did not get an opportunity to tender".

The Ministry of Works has never explained how Namibian companies, which were involved in the original feasibility study and design for the State House, failed to win a substantial part of the lucrative construction contract.

Yesterday Works,Transport and Communications Minister Moses Amweelo said Namibian companies, such as the Road Contractor Company (RCC), as well as other sub-contractors were part of the building workforce.

"There are some of our people.

The Government also recognises the high rate of unemployment," said Amweelo, "we cannot do any project without involving a Namibian company".

By yesterday the Ministry of Works had yet to respond to detailed questions about the Chinese involvement.

The questions were faxed to Amweelo last week.

The Chinese Embassy in Windhoek declined to comment.

Opposition parties said they were unaware of the involvement of Chinese companies in the construction.

Congress of Democrats President Ben Ulenga said he would not be surprised, charging China would perhaps "offer better terms in terms of slave labour".

Johan de Waal of the DTA-UDF coalition said he "would be very upset" if Chinese companies were now involved in the project and complained that by cutting out local contractors it would mean money would leave the country.

The estimates of how much the presidential palace will cost have doubled over the past year - from N$242 million to about N$500 million because of "improvements" added to the original design.

The Ministry of Works has set 2005 as target to complete the State House, which Amweelo emphasised would be a "national asset".

He said the existing State House on Robert Mugabe Avenue was "not a State House, only a guest house".

Amweelo also said the presidential residence was not in an ideal position as it was exposed to "noise pollution".

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