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Canada's biggest engineering firm, which for decades has operated in some of the world's hot spots, has been selected to refurbish a derelict Afghan dam that has been billed as one of Canada's “signature projects” in Afghanistan.

Montreal-based engineering giant SNC-Lavalin confirmed Friday it has been chosen to oversee the repair of the Dahla dam on the Arghandab River in northern Kandahar province.

“I can confirm that SNC-Lavalin in joint venture with Hydrosult has been awarded this contract,” company spokeswoman Gillian MacCormack told The Canadian Press in an e-mail.

SNC-Lavalin has been in Afghanistan for years doing logistics work under a Defence Department program.

Earlier in the day, Canada's top civilian official in Kandahar, Elissa Golberg, confirmed a company had been awarded the contract, but declined to name the firm or give an exact date for the announcement.

Last year, a blue-ribbon panel headed by former Liberal deputy prime minister John Manley urged the Conservative government to pursue at least one signature “Canadian” project easily identifiable to the Afghans that coalition forces are trying to win over.

The Dahla dam's repair is one of three major projects the Tories subsequently announced.

Canada will spend up to $50-million to refurbish the dam to improve irrigation and open up new, fertile soil for farmers deep into the Arghandab River Valley.

Other international partners, including USAID, could also contribute to the project.

CIDA has said the project will provide Afghan farmers with 10,000 hectares of irrigated land. It is also expected to employ up to 10,000 seasonal workers.

However, repair work on the dam itself has been stalled by a drawn-out bidding process. As a result, only a fraction of the 10,000 workers have been hired so far to build roads and bridges leading to the dam so heavy machinery and trucks can get to it, and to build an outpost at the top of the dam for Afghan police officers to stand guard.

Ms. Golberg said she expects work on the dam to begin in a few months.

“I would imagine towards the spring. The contractor needs to be able to come down and start doing their planning and their technical analysis,” she said.

The Dahla dam — the second-largest dam in the country — suffers from years of war and neglect. But its location on the Arghandab River, which winds through Afghanistan's parched southern landscape, is of strategic importance for coalition forces.

The dam will irrigate large tracts of land in the Arghandab River Valley. The river is the lifeblood of local farmers who live in the dozens of small villages along the riverbanks. Bringing a stable water supply to each of these villages avoids the perception of favouring some over others.

The dam project is also expected to please the local Alokozai tribe, many of whom live in the Arghandab River Valley and who have generally been supportive of the mission in Afghanistan.

There have been signs of unrest in the region following the death of a powerful pro-government tribal leader, Mullah Naqib, a former warlord who was an enemy of the Taliban.

Since October 2007, Arghandab has been the site of two major clashes with the Taliban as the insurgents sought to win back their former stronghold, which would provide the group with an easy conduit to smuggle fighters and weapons into Kandahar city.

The area is still contested, however, and tender documents released last summer by the federal government warned companies bidding on the Dahla dam reconstruction they would be largely responsible for their own security.