The project stalled despite State short-listing 49 companies for road bids.
Machakos has been grappling with lack of high quality hotel accommodation.
The Sh2 billion project has not been completed since May 2012.
Churches are aggressively pouring billions of shillings into Kenya's property sector.
The houses in the first phase will be sold to civil servants.
The 170-room City Lodge Hotel will be situated within Two Rivers Mall on Limuru Road.
Phase one and two of the project, comprising 850 housing units are completed and fully sold.
The new houses will be built using the Expanded Polystyrene (EPS) technology.
The Sh4.5 billion project will be completed in the next two years.
The facility is expected to boost power supply to the port to 132Kv from 11Kv.
Talks are underway for China to fund a new highway and rail extension.
The Chinese-funded Orpower 22 power plant will take 17 months to complete.
Bedsitters will rent for Sh3,200 per month on a 30-year rent-to-own plan.