KPEC project: World Bank flags implementation delays

ISLAMABAD: The World Bank (WB) has flagged continued implementation delays in the USD460.6 million Khyber Pass Economic Corridor (KPEC) project, as the government seeks a major restructuring and a 36-month extension in the project closing date to complete the long-delayed Peshawar-Torkham Expressway.

Official document revealed that procurement for the civil works contract of the expressway is being re-launched under a revised contracting strategy, with bid advertisement planned by end-May 2026.

The project, approved in June 2018, aims to expand economic activity between Pakistan and Afghanistan by improving regional connectivity and promoting private sector development along the Khyber Pass corridor.

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The Bank maintained the project’s overall progress toward achieving the development objective at “Moderately Unsatisfact-ory,” although implementation progress improved from “Moderately Unsatisfactory” to “Moderately Satisfactory.”

The document noted that the government has formally requested restructuring of the project, including scope adjustments and extension of the current closing date of May 28, 2026, to allow sufficient time for construction delivery. The restructuring request is under review by the Bank.

Despite the passage of nearly eight years since approval, physical construction activities under the flagship expressway component have yet to commence.

Key performance indicators, including reduction in travel time for heavy trucks between Peshawar and Torkham and reduction in border crossing time at Torkham, remain unchanged from baseline levels.

The World Bank data showed cumulative disbursements of only USD4.41 million against the revised allocation of USD437.84 million, representing just 1.01 percent disbursement.

However, progress has been reported under Component-II relating to economic corridor development and regional planning. The Bank said the Western Greater Peshawar Master Plan, urban development plans for Jamrud and Landi Kotal, and feasibility studies for the Border Bazaar and International Bus Terminal have been completed.

The document further noted that enterprise development training has been provided to more than 500 trainees from 455 businesses across 10 priority clusters, while the Inclusive Business Development Park has been operational since September 2024. A scoping study covering over 4,600 women-owned businesses in Peshawar and Khyber district has also been completed.

The Bank noted that feasibility studies for two priority investments are under way, while procurement of a design and supervision consultant is in progress.

The project’s risk profile remains “Substantial,” with environmental and social risks as well as stakeholder-related risks rated “High.”

Under the grievance redress mechanism, the document said all complaints received during the reporting period were resolved within stipulated timelines. Only six complaints were lodged over the past two quarters, largely because civil works and land acquisition activities have yet to advance significantly.

The KPEC project is being implemented by the National Highways Authority (NHA) and the Planning and Development Department of the Government of Khyber Pakhtunkhwa.

Copyright Business Recorder, 2026