World Bank expresses concern over delay in $500m KPEC project

PESHAWAR: The World Bank has expressed concern over the inordinate delay in the Khyber Pass Economic Corridor (KPEC) project.

The WB-funded project worth $500 million was launched to boost trade between Pakistan and Afghanistan and strengthen connectivity with Central Asian countries.

According to the World Bank’s KPEC implementation report 2025, available with Hum News English, the project was initiated in 2018 but has seen only 0.68 per cent of its total funding utilised to date out of a total cost of nearly $500 million.

Project Overview

The primary objective of the KPEC project is to enhance economic ties between Pakistan and Afghanistan and to support private sector development.

The project comprises two major components: construction of the Torkham Expressway at an estimated cost of $429.56 million and development of an economic corridor with a projected cost of $77.23 million.

Delays and Missed Targets

According to the WB report, construction activities have yet to begin, and civil works contracts are still being processed — a process now expected to be completed by the end of 2025.

The report noted that a key project goal — reducing travel time for heavy vehicles between Peshawar and Torkham — has not been achieved.

It said that indicators such as quicker trade truck crossings at the Torkham border, increased women-led businesses, and expansion in cross-border trade have also stalled at initial stages.

Progress So Far

The project’s resettlement action plan was issued on February 14, 2025.

Feasibility studies for the international bus terminal and border market are nearing completion, and consultations with local communities have increased.

Future Outlook

The World Bank report highlighted that political and governance issues, environmental and social impacts, and declining stakeholder confidence are all impeding progress and putting the project at considerable risk.

Originally set for completion in June 2024, the project deadline has now been extended to May 2026.

KP Government and NHA Versions

Officials from Khyber Pakhtunkhwa’s Planning and Development Department told HUM News English that the delay stemmed from National Highway Authority (NHA) tendering and rate issues.

Meanwhile, NHA officials involved with the project said the tendering process is under way, with both technical and financial evaluations completed.

The tenders will soon be sent to the World Bank for approval, they said.

Both provincial and NHA officials said that the project will not be scrapped, and a further extension request will be submitted to the World Bank if needed after the May 2026 deadline.