The United Kingdom (UK) has halted the disbursement of Ksh18.1 billion (£100 million) designated for the development of the Nairobi Railways City Project due to a lingering dispute over the awarding of construction contracts.
This decision by the UK government comes as a response to Kenya's failure to award contracts to contractors, effectively stalling the commencement of the ambitious urban development project.
"The £100 million allocated for this urban development initiative, designed to revitalize the area around Nairobi's Central Railway station, accounts for approximately half of the total funding allocated for phase one of the project," reported The Africa Report.
The Nairobi Railways City Project represents the UK's largest investment in Kenya and aims to address congestion issues in the Central Business District while simultaneously fostering job creation.
The project envisions the construction of a green city replete with office complexes, shopping malls, and a light industrial hub on Kenya Railways land. Additionally, it includes the establishment of economic zones intended to accommodate cutting-edge industries and small to medium-sized enterprises, with the potential to generate over 200,000 jobs.
Although the project's concept was initially conceived during the tenure of former President Uhuru Kenyatta, it was officially launched last year with an estimated total cost of Ksh28 billion.
Despite initial plans for construction to begin last year, the project has encountered delays, and work has not yet commenced. The designated site encompasses 425 acres of land and comprises the Nairobi Central Railway Station, the marshalling yard, and the Kenya Railways Pension Scheme Land, commonly known as Landimawe Estate.
This initiative is part of a larger collaboration that includes six projects collectively worth KES 500 billion. These projects were expedited under a bilateral agreement signed between President William Ruto and UK Prime Minister Rishi Sunak in 2022.
According to Kenya Railways, the Nairobi Railways City Project was expected to transform the vicinity around Nairobi Central Railway Station into a modern Railway City, creating a livable and sustainable urban space and supporting a Transit Oriented Development (ToD) to bolster ridership for the Nairobi Commuter Rail.
Furthermore, it aimed to establish a Transport Hub featuring multi-modal transport facilities, expand the Nairobi Central Business District southwards, and position Nairobi as a leading global city with an iconic development.
The fate of the Nairobi Railways City Project now hangs in the balance as the funding suspension casts uncertainty over its progress and implementation.