State seeks Sh10bn more from World Bank for city road

The Treasury has been forced to negotiate afresh with the World Bank after a Sh10 billion additional land compensation claim stalled the expansion of a 25km stretch of the Waiyaki Way.

Transport and Infrastructure Cabinet Secretary James Macharia said that his ministry had asked the Treasury to renegotiate the financing of the James Gichuru-Rironi Road project because the amount involved in compensation is huge and way outside the annual budget of the Kenya National Highway Authority (KenHa).

Besides the cost of expansion, Kenha estimates it requires Sh16 billion to compensate people affected by the project, up from the budgeted Sh10 billion.

“Compensation is a fundamental issue but there is a huge mismatch between the budgetary allocation to KenHa and the cost of land along the expansion corridor,” Mr Macharia said when he appeared before the Senate committee on Transport on Friday.

The James Gichuru–Rironi project is part of the Sh59 billion KenHa plan to improve the thoroughfare from Jomo Kenyatta International Airport to ease traffic congestion in Nairobi.

Under its policy, the World Bank never provides funds for compensation or land acquisition where it finances a project. But Mr Macharia said the ministry had pleaded with the financier to reconsider the position because the project is special due to the amount involved.

KenHa CEO Peter Mundinia told the committee that the cost of compensation had escalated beyond the reach of the agency due to the huge variation in the valuation of the land along the corridor between the consultant it had recruited and that of the National Land Commission (NLC).

While the consultant valued an acre of land at Sh900,000, the NLC valuation stood at Sh30 million, which had significantly pushed up the cost of compensation.