The government will take over a project aimed at decongesting city roads following the withdrawal of funding by the World Bank.
The World Bank raised integrity issues regarding the concession before withdrawing its support.
Finance permanent secretary Joseph Kinyua said on Friday the government was not part of the collapsed deal.
“The issue had nothing to do with the government in terms of what did not work. It was only at the signing of the concession that the Ministry of Roads was to come in,” Mr Kinyua said.
He was speaking in Othaya at a meeting for local teachers.
Explore other options
The permanent secretary said although the project was to cost Sh80 billion ($1 billion), the government would explore other options to fund it.
“We will now have to look at it as a public sector project because we have the capacity.”
Mr Kinyua said the World Bank did not pull out of the project due to land acquisition issues.
The 106-km elevated highway from the Machakos junction to Limuru was to be undertaken by a consortium, the Nairobi Motorway Group, through a private-public partnership.
The group comprised Austrian and Israeli firms Strabag AG and Shikun-Binui, respectively.
The World Bank was to fund the project and the government was to provide the land.