World Bank downgrades KP tourism project implementation to ‘unsatisfactory’

ISLAMABAD: The Khyber Pakhtunkhwa Integrated Tourism Development Project, backed by a USD 100 million World Bank financing package, has been downgraded to “moderately unsatisfactory” in implementation progress, even as the project has surpassed several key targets and mobilised nearly USD 83 million in private investment.

According to the World Bank’s document, the project’s overall implementation progress has deteriorated from “moderately satisfactory” to “moderately unsatisfactory”, while progress towards the development objective remains “moderately satisfactory”.

The project, approved in 2019 and now scheduled to close on April 30, 2027, aims to improve tourism infrastructure, enhance tourism assets and strengthen destination management for sustainable tourism development in Khyber Pakhtunkhwa.

The Bank said a major breakthrough came in May 2026 when the KP government signed a concession agreement worth around USD 83 million with a private-sector consortium for the Thandiani Integrated Tourism Zone (ITZ), significantly exceeding the project’s USD 6 million target for mobilising new private investment.

However, implementation remains uneven, with institutional capacity for implementation and sustainability again rated a substantial risk.

The project has so far benefited 559,773 individuals, against a revised target of 175,000. Among them, 150,236 were women, far exceeding the target of 33,000.

The beneficiaries include more than 113,000 people who used prefabricated toilets installed at tourism destinations, 17,263 people provided medical assistance through Rescue 1122 stations, 129,734 tourists visiting illuminated heritage sites and nearly 299,000 tourists facilitated through the 1422 tourism helpline.

The project has also generated 3,822 direct and indirect jobs, surpassing its target of 2,500. Tourism-related businesses and workers receiving business development services and training reached 1,673 against a target of 950.

However, women’s participation remains comparatively weak. Only 232 women entrepreneurs and workers have received business development services and training against the revised target of 350, while the target for jobs created for women is also only partially achieved.

The report said the project has delivered a wide range of tourism facilities, including 452 multilingual signboards, 70 prefabricated toilets, five tourist Rescue 1122 stations, a 24/7 tourism helpline and illumination of four heritage sites.

Six archaeological sites have been conserved, 16 flood-affected sites rehabilitated, three museums upgraded and the Derajat Museum rehabilitated and launched.

The Derajat Museum, inaugurated in November 2025, attracted 1,769 domestic visitors between January and June 2026, while procurement and installation work at Abbottabad Museum is progressing, with the facility expected to open to the public by October 2026.

Financially, the original USD 70 million IDA credit is almost fully utilised, with 99.99 percent disbursed. However, under the additional USD 30 million financing, only 16.81 percent, or USD 5.19 million, has been disbursed, leaving USD 25.68 million undisbursed.

The project has also exceeded its target for tourism-sector reforms, introducing measures including reduction of KP sales tax on hospitality businesses from 15 percent to 8 percent, amendments to tourism and antiquities laws, Tourism Police regulations and building codes for Kalash and Kumrat.

Despite these achievements, the World Bank report underscores the need to accelerate implementation, particularly as the project enters its final phase with less than a year remaining before its scheduled closure.

Copyright Business Recorder, 2026