A disagreement between the Marshall Islands Combined Utilities Board and the Asian Development Bank has put a major infrastructure project for Ebeye Island in jeopardy.
After several years of planning, a contract was awarded late last year for the first phase of a $US19 million project to improve the water, sewer and power systems for the island community which is located next to the US Army's Kwajalein missile testing range.
However a dispute over the contract award and future directions of the project has put it in danger of having its funding cut.
The ADB oversees the project, with major financing from the United States and Australian governments.
Ebeye has long been called the "slum of the Pacific" with failing infrastructure that is unable to support the population of 11,000 living on a 34 hectare island.
The chief executive of the Marshall Islands Combined Utilities, Jack Chong Gum, told the ADB last month they had decided to cancel the bid award and re-advertise for tenders on Ebeye's largest-ever construction project.
But the ADB said it was opposed to the new move by the board and is threatening not to finance the works if the re-bid goes ahead.