World Bank flags delays in $460 million Khyber Pass corridor project, Pakistan seeks 3-year extension

The World Bank has raised concerns over continued delays in the $460.6 million Khyber Pass Economic Corridor Project, as the government seeks a major restructuring and a 36-month extension to complete the delayed Peshawar-Torkham Expressway, Business Recorder reported. 

The bank maintained the project’s overall development objective rating at “Moderately Unsatisfactory,” although implementation progress improved from “Moderately Unsatisfactory” to “Moderately Satisfactory.”

According to official documents, procurement for the expressway’s civil works contract is being re-launched under a revised contracting strategy, with bid advertisements planned by the end of May 2026.

The project was approved in June 2018 to improve regional connectivity between Pakistan and Afghanistan and promote economic activity along the Khyber Pass corridor.

The government has formally requested restructuring of the project, including changes in scope and extension of the current closing date from May 28, 2026, according to the document. The request is currently under review by the World Bank.

Despite nearly eight years since approval, physical construction work on the Peshawar-Torkham Expressway has not yet started.

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

World Bank data showed cumulative disbursements of only $4.41 million against a revised allocation of $437.84 million, representing 1.01% utilisation.

The report, however, noted progress under the economic corridor development and regional planning component of the project.

According to the Bank, the Western Greater Peshawar Master Plan, urban development plans for Jamrud and Landi Kotal, and feasibility studies for a Border Bazaar and International Bus Terminal have been completed.

Enterprise development training has also been provided to more than 500 trainees from 455 businesses across 10 priority sectors.

The Inclusive Business Development Park has been operational since September 2024, while a study covering more than 4,600 women-owned businesses in Peshawar and Khyber district has also been completed.

The Bank said feasibility studies for two additional priority investments were underway, while procurement of a design and supervision consultant was in progress.

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

According to the document, only six complaints were received under the grievance redress mechanism during the past two quarters, largely because civil works and land acquisition activities had not significantly advanced.

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