The construction of a dry port in Athi River is now at stake after President William Ruto reverted cargo clearing services to Mombasa port.
The new directive has dealt another blow to the project that has stalled for the past three years.
The government through Kenya Railways Corporation proposed to set up an inland port on the 900 acres previously owned by the East African Portland Cement (EAPC).
In 2019, Railways paid a down payment of Sh1.2 billion to EAPC for the Sh5.2 billion land.
However, squatters became hostile to surveyors who had moved in to slice out 59 acres meant to be used by Grain Bulk Handlers Ltd to build go-downs on the SGR Athi River station frontage.
The confrontation opened a window for protracted court battles with squatters managing to stop the construction of the dry port through a court order.
A spot check on Thursday indicated the perimeter wall on a section of the 59 acres is wearing out. The site is deserted and the ground is bare. There are no police officers on site as was the case.
Julius Mutua, the chairman of Aimi Ma Lukenya Society, which claims ownership of the land, welcomed Dr Ruto's directive.
"We moved to court to stop the fraudulent process. Like the dry port in Naivasha, this one was meant to benefit a few individuals at the expense of locals," he said.