Kenya cancels concession talks for Nairobi toll road

The government has cancelled the construction of Nairobi Urban Toll Road Project. Photo/FILE

The government has officially terminated the construction of Nairobi Urban Toll Road Project, following lack of interest from the World Bank to finance it.

This is because the firm meant to take up the concession, Strabag Group, did not pass the bank’s compliance procedures.

The new development means that Kenya will have to open new concession negotiations with another company or seek financing that does not come under the conditions of the World Bank.

Strabag has, however, protested the termination by Kenya and in a statement issued on Thursday urged the government to reconsider its decision because “financiers had expressed interest” to go on with the project.

The Roads ministry sent a letter to Strabag this week officially notifying it of its intention to terminate the concession project.

“The ministry cancelled, without a reasonable cause, a process in which Strabag had invested more than five years of its time and incurred substantial development costs,” said Diana Klein, the head of the company’s corporate communications.

Strabag claimed that World Bank sent it and the government a letter on April 5, in which it officially confirmed willingness to support and finance the project.

“Furthermore, European Investment Bank (EIB) and other international and local financing institutions have expressed interest in financing the project. We remain committed to the project and assure the financial close within 12 months after signing the Concession Agreement. As a result, we could start construction early 2012. All parties are ready to start, but for some reason the ministry of Roads delays the process,” said Wolfgang Sommerbauer, director International Projects of Strabag.