According to the mod team developing the title, Outer Heaven, Konami instructed them to stop working on it. Outer Heaven sent an e-mail to Metal Gear Informer, which explained that “the project has been shut down by Konami, seems that they all couldn’t agree on the project going ahead.”
Outer Heaven released a work-in-progress trailer to showcase some work that had been done, including dialogue that was voiced by David Hayter. Apparently he can’t catch a break when it comes to the Metal Gear series these days.
Also working on the project were Adhem Belkhadra from Ubisoft (Gears of War, Just Dance, the Cursed Crusade, etc.) who was doing level mapping, Kaue Lemos from Insane Games (Earth Under Seige, Bubble Up, etc.) who worked on sound effects, Orion Acaba (Fire Emblem, Infamous series, etc.) who helped with voice acting, and Paul Eiding (Roy Campbell) who was set to cameo.
Outer Heaven is apparently planning to develop an original IP now. The big question is if this reversal on the part of Konami indicates that it has something planned for Metal Gear.