The Sh37 billion project to decongest city roads has collapsed.
Roads minister Franklin Bett said it could not continue after the World Bank, the main funder, withdrew its support.
“The project, as envisaged through the consortium, has regrettably collapsed,” he said on Thursday.
Mr Bett said the government would look for new sponsors for the project that involved building an elevated highway from the Machakos junction to Limuru.
The World Bank pulled out of the project on Tuesday, citing integrity and land acquisition issues. However, it did not give details.
“It is upon the bank to satisfy itself on where its money is going and whether the recipients can repay,” the minister said.
The 106km project was to be undertaken by a consortium, Nairobi Motorway Group on Private-Public Partnership. The team comprised Austrian and Israeli firms Strabag AG and Shikun-Binui respectively.
The World Bank was to fund the project and the Kenyan Government was to provide land for the construction. The contractors would have recouped their costs in 30 years by charging motorists using the road.
On Thursday, Strabag said it was committed to meeting the bank’s stringent funding conditions.
“Our people are still negotiating with the bank to prove that we can meet the terms before we can sign the agreement,” said the company’s spokesperson, Ms Diana Klein. She said even if the talks fail, the government could still approach other donors.
The project was first mooted in 2001, but it was not until 2009 that the bank, consortium and the government signed a draft agreement.
The bank, though, was never at ease with the consortium. Last month investors on Mombasa Road opposed government plans to forcibly repossess their land to pave the way for the expansion of the road.