The World Bank has issued a conditional offer to finance the construction of a multi-billion shilling pay-for-use road to ease traffic jams around Nairobi.
Country representative Johannes Zutt, said the institution would only finance the project once the selected contractor-Strabag International complied with its social and environmental safeguards including land acquisition and legal provisions in Kenya.
“If the government of Kenya so desires, the World Bank Group would be prepared to finance a concession undertaken by Strabag, on the condition that Strabag agrees to expand its integrity compliance procedures and training programmes to cover the company more completely,” he said in a statement on Wednesday without expounding.
The project dubbed Nairobi Toll Road (NTR) would entail paving of the 77-kilometre road between the Athi River Junction on Mombasa Road and Kikuyu on Naivasha Highway.
Though the project was to be started two years ago the ground breaking is yet to come to fruition after the World Bank raised several objections over Strabag’s involvement.
That prompted an evaluation of among other things Strabag’s ownership amid World Bank concerns that some business the Russian businessman had interests in one of the consortium members.
On Wednesday, Mr Zutt said the due diligence exercise had revealed some “irregularities” that Strabag would be required before the World Bank could unlock finances for the Sh67billion project.
“The World Bank found that the systems and approach to compliance procedures would not be commensurate with the circumstances of this project and the governance risks facing this sector. Accordingly, the World Bank Group is not prepared to participate in financing the consortium involved in this project as currently structured,” he said.
Analysts said the stand by the World Bank is expected to add pressure on the government that is currently under immense pressure to complete the project.
Roads minister Franklin Bett last month said the government would bring on board new partners if the tussle between the financiers and the contractors was not resolved quickly.
“The partners would have to get things rolling or we have another partner on board,” said Mr Bett.
The minister’s position, however, posed a dilemma in that either way the government risked suffering the wrath of financiers or paying hefty penalties to the company.
Though indirectly, Mr Zutt seemed to prod the government to drop Strabag from the deal even though some sources at the Roads ministry said the State could still opt to scout for a new financier for the project.