World Bank has pulled out of the 26km James Gichuru-Rironi Road upgrade project, forcing the Government of Kenya to chip in and top up Ksh13 billion.
The World Bank was supposed to fund the project with Ksh13 billion, with the government paying Ksh3.3 billion.
The project is reported to have stalled, as the Kenya National Highway Authority (KeNHA) seeks for additional billions to compensate land owners.
The government was seeking Ksh10 billion funding to cater for the additional unplanned land compensation claims, which seems to have backfired. Under its policies, the multilateral lender does not provide funds for land compensation for projects which they fund.
KeNHA says that the cost of land compensations has skyrocketed from estimated Ksh900,000 per acre to Ksh30 million after the National Land Commission (NLC) chipped in.
“Every programme that World Bank funds through the National Urban Transport and Improvement project has a timeline, and in this case, the timeline for funding of this road was to end in December 2019. It is the reason why they (World Bank) could not fund the road as timeline had elapsed. Treasury therefore thought it wise to terminate the agreement and fund the road through locally generated resources,” KenHa director-general Peter Mundinia said Monday.
As of now, 67 per cent of the project time has lapsed while only a quarter of the work had been completed.